Serious power shortfall awaits Bangladesh in 5yrs: Sanem

Bangladesh could face a serious electricity supply shortfall after 2031 unless fresh investments, policy reforms and efficiency measures are undertaken, according to a study by the South Asian Network on Economic Modelling (Sanem).

While Bangladesh’s installed power generation capacity may peak at around 35,000 megawatts (MW) by 2029, effective capacity is likely to decline to nearly 30,000MW by the mid-2030s due to plant retirements, declining domestic gas availability and limited new project additions, it says.

“Installed capacity figures often create a false sense of comfort,” states the study jointly presented by Sanem’s Director Israt Hossain, and Honorary Deputy Director Md Tuhin Ahmed, at an online workshop on Bangladesh’s energy transition organised by the platform yesterday.

Meanwhile, it estimates that electricity demand will grow by 5-6 percent annually, driven by industrialisation, mechanisation and rising living standards.

Under a 5 percent growth scenario, demand is expected to overtake supply by 2035, while a 6 percent scenario could see the crossover as early as 2033, potentially creating a supply gap of more than 14,000MW by 2040 if no corrective measures are taken.

“This is why the idea of overcapacity in the power sector is misleading,” it notes. “The real challenge is ensuring dependable, fuel-secure and efficiently generated electricity over the long term.”

Comparative data presented at the workshop shows Bangladesh uses less energy per unit of GDP than some regional peers, indicating relatively higher efficiency.

Besides, the study states that private power producers currently account for nearly half of installed generation capacity, operating more than 70 plants with combined capacity exceeding 11,000MW.

“This heavy dependence on imported energy has made its economy highly vulnerable to global price shocks,” said Selim Raihan, executive director of Sanem.

He urged a renewable energy transition and stronger, comprehensive efficiency policies, also noting that high tax incidence on renewable energy components remains a key barrier to adoption.