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special feature

Energetica India

Bangladesh Energy Overview

The article shows the picture of the power sector in Bangladesh. It looks at the sector challenges,
the government policies and expected power trends in the country.

angladesh, with its 160 million The PSMP 2005 was mainly based on resources, optimum power development
people in a land mass of 147,570sq gas with the perception that Bangladesh plan, future optimum power supply struc-
km is an emerging economy of has abundance of gas reserve. But the re- ture including the positioning of gas-fired
South Asia. Sustained economic growth ality was not that, as such even the exist- power plants, and so on. The fundamental
over the last decade has resulted in a con- ing gas based power plants could not be objective was also to attain stable power
siderable high electricity demand. How- operated due to the shortage of adequate supply by achieving the 3Es i.e, Economic
ever, the demand has not been met due gas pressure and gas reserve is alarmingly Growth, Energy Security and Environmen-
to inadequate generation addition in the depleting. tal Protection simultaneously.
past. Load shedding had been increased. This made the government come up with According to the Master Plan the fore-
Moreover, outstripping electricity demand- a new PSMP 2010 with a vision to provide casted demand would be 19,000 MW in
supply gap has been constraining further electricity for all by 2021. The new PSMP 2021 and 34,000 MW in 2030. To meet
economic progress as required to move 2010 considered coal as dominant primary this demand the generation capacity
ahead middle class economy. fuel for the attainment of stable power should be 39,000 MW in 2030.
The Bangladesh government has already supply up to the year 2030 in considera- Considering the fuel diversification issue,
declared its vision for power sector with an tion of the diversification of fuel resources. the PSMP 2010 aimed to acquire the fuel
objective to generate electricity for all. The PSMP 2010 included an optimum composition ratio to be coal 50% (30%
power development plan and identifica- domestic coal and 20% imported coal),
Power System Master Plan 2010 tion of the potential power plant sites natural gas 25% (including LNG), 5%
(PSMP 2010) based on the fuel diversification study. liquid fuel and 20% nuclear including re-
In order to develop the Bangladesh power It was developed with fundamental con- newable and cross-border trade. However,
sector, the government had put in place a ditions of the development e.g. demand domestic energy supplies are not enough
Power Sector Master Plan (PSMP) in 2005. forecast, procurement of primary energy to fulfill the rapid demand growth for elec-
tricity and natural gas, and so it became
necessary to tap into other power sources
from abroad.
In order to achieve the said target the
PSMP 2010 addressed the following is-
1. Construction of imported coal power
2. Introduction of LNG facilities
3. Construction of the oil fired power sta-
4. Import the electricity generated by
hydro power from the neighbouring
countries or joint development
5. Introducing a high efficient power sup-
ply and low CO2 emission technology
6. Improving 10 points thermal efficiency
on average
The PSMP 2010 recommended the re-
vision of tariff structure to recover main-

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tenance costs and future investment for Installed Capacity of BPDB Power Plants Steps have been taken by government to
plant and equipment due to the fact that as on February 2014 generate 7,000 MW by 2013 and 13,000
the prevailing tariff did not envisage fund- Unit Type Capacity(Unit) Total(%) MW by 2018.  4432 MW of power (as of
ing for neither appropriate maintenance Coal 250 MW 2,44% September, 2013) has been added to the
nor future system expansion. While the Gas 6615 MW 64,59%
prevailing tariff policy adheres to the cost Heavy
The plan suggested to go for fuel-mixed
1963 MW 19,17%
reflection, it was also recommended that Fuel Oil option, which should be domestic coal
the power development surcharge into the High 30%, imported coal 20 %, natural gas
Speed 683 MW 6,67%
power tariff be introduced for the purpose Diesel (including LNG) 25%, liquid fuel 5%, nu-
of funding the development of the pow- Hydro 230 MW 2,25% clear, renewable energy and power import
er system and/or energy saving projects. Imported 500 MW 4,88% 20%. In line with the Power system Master
PSMP 2010 recommended to promote pri- Plan 2010, an interim generation addition
Total 10241 MW 100%
vate investment and develop an environ- plan up to 2018 has been prepared, which
Tabl2 1. BPDB —- Bangladesh Power Development
ment that allows private funding. Board. is as seen in tables 2, 3.
The aggregated investments for the de- of living standard, increase of agricultural
velopment of the generation, transmission production, progress of industries as well Short, Medium and Long Term Plans
and related facilities are found to be at as overall development of the country. The Government has undertaken some
Taka 4.8 trillion (US$ 69.5 billion). The an- short term, medium and long term plans
nual average of the investment amounts Power Generation Scenario In Bangladesh to make electricity available to the country.
to Taka 241 billion (US$ 3.5 billion). Bangladesh as a country has faced severe Under the short term plan, rental power
The government fully recognizes the fact power crisis which has compelled the State plants will be installed using liquid fuels/
that public sector investment alone is not to enter into contractual agreements for gas and capable to produce electricity
sufficient to achieve its target and has high-cost temporary solution, such as oil within 12-24 months.  Total 1653 MW
aimed at mobilizing resources from the pri- based rental and public sector peaking was installed by this time from rental pow-
vate sector investments. The government power plants  on an emergency basis.; er plants.
has been promoting the development thereby resulting in fiscal pressure. Under the medium term plan, initiatives
of infrastructure through the promotion With a power sector which is almost de- have been taken to set up power plants
of Public-Private Partnership (PPP) as the pendent on natural-gas fired generation with a total generation capacity of 11,497
policy to develop public services via private (89.22%), the country is confronting a MW. The plants are mainly coal based;
sector investment. simultaneous shortage of natural gas and some are gas and oil based.
The Master Plan as a whole, requires an electricity. Nearly 800 MW of power could In the long term plan, some big coal fired
annual allocation of Taka 241 billion and not be availed from the power plants due plants will be set up, one will be in Khulna
the amount calculated for future availabil- to shortage of gas supply. Other fuels for and other will be in Chittagong, each of
ity covers only 51% of the total require- generating low-cost, base-load electricity, having the capacity of 1300 MW. Some
ment, while the remaining 49% has yet to such as coal, or large hydropower, are not 300-450 MW gas based power plants will
be identified in its funding source. It is im- readily available and Government has no be set up in Bibiana, Meghnaghat, Ashu-
perative that the funding source needs to option but to go for fuel diversity option gonj, Sirangonj and in Ghorashal.
be expanded and efforts should be made for power generation.
to increase the funding volume from each
of the funding sources to fill the gap. Calendar Year Wise  Generation Addition program (From 2013 to 2018)  In MW
In addition to what has been described YEAR 2013 (MW) 2014 (MW) 2015 (MW) 2016 (MW) 2017 (MW) 2018 (MW) TOTAL (MW)
of the conventional Sources of funds,
Public 662 604 1837 1510 0 1320 5933
funding can be sought to the mecha-
Private 692 1366  1097 638 1271 0 5064
nisms such as Global Environment Facility
(GEF) and Clean Development Mechanism Import
500  500
(CDM) established for protection of the Total 1854 1970 2934 2138 1271 1320 11497
global climate. Table 2.

 Plants Commissioned During 2009 – September 2013

Generation Plan of Bangladesh’s
Power Sector YEAR 2009 (MW) 2010 (MW) 2011 (MW) 2012 (MW) 2013 (MW) TOTAL (MW)
Though the power sector in Bangladesh Public 255 800 607 587 2249
has witnessed a few success stories, there
Private 356 270 125 44 795
exists gap between what’s been planned
Q. Rental 250 838 300 1388
versus what the power sector has been
able to deliver. The demand for electricity is Total 356 775 1763 951 587 4432
increasing rapidly with the improvement Table 3.

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A total of  38,229 Million-kilowatt hour Considering this the government has

(MkWh) net energy was generated during identified private sector participation as an
2012-13. Public sector power plant gener- important requirement. Under the RAPSS
ated 47% while private sector generated concept, private investor will be given an
53% of total net generation. The share of area (the RAPSS Area) for the develop-
gas, hydro, coal and oil based energy gen- ment, operation and maintenance of the
eration was–78.12%,  2.34%,  3.02% electricity distribution and retail supply
and 16.51% respectively. system, including generation as a utility
for a period of 20 years. The government
Power Distribution Plan has taken initiatives to establish solar mini-
Bangladesh saw a number of distribu- grid for remote off-grid area under RAPSS
tion entities taking shape as a result of where grid expansion is not planned for
reforms, restructuring and corporatization the next 15 to 20 years.
process of Bangladesh power sector. The
distribution entities were formed with the Pre Paid Meter
objective of bringing commercial environ- With an aim to improve operational ef-
ment including increase of efficiency, ac- ficiencies, reduce financial risks and en-
countability and dynamism with the aim of hance customer services, Bangladesh
reaching electricity to all citizens by 2021. Power Development Board [BPDB] had opment of relevant policy and institutional
Presently the following five organizations installed nearly 46,000 pre paid meter in development.
are responsible for the distribution of pow- Chittagong, Bogra, Sylhet and Sirajgonj
er in the country: area. Due to the success of the pre paid Renewable Energy Policy
Bangladesh Power Development Board meter, the government has planned to in- Renewable Energy Policy, brought about in
(BPDB) stall this system all around the country. 2008, to facilitate both public and private
7. Rural Electrification Board (REB) sector investment in renewable energy
8. Dhaka Power Distribution Company Renewable Energy in Bangladesh projects to substitute indigenous non-
(DPDC) In the roadmap set by the State for coun- renewable energy supplies and scale up
9. Dhaka Electric Supply Company try’s power sector, renewable energy has contributions of existing renewable energy
(DESCO) been given due importance. based electricity productions.
10. West Zone Power Distribution Com- Power generation in Bangladesh was The Policy envisions 5% of total genera-
pany (WZPDC) mono-fuel dependent, i.e. indigenous tion from renewable sources by 2015 and
Some Recent initiatives to improve power natural gas since 2009 considering its ap- 10% of the same by 2020.
distribution in Bangladesh include: parent huge availability. About 89% of
generated power comes from natural gas Institutional Development
Power System Interface Meter and the rest is from liquid fuel, coal and Establishment of a nodal agency, i.e. Sus-
At present the government has taken mas- hydropower. The present share of renew- tainable Energy Development Authority
sive measures to reduce system loss and able energy is only 0.5%. (SEDA) as envisioned in the Renewable
increase customer satisfaction. Under this However, in recent years, it was evident Energy Policy is underway. For the interim
project 409 interface meters have been in- that actual scenario is other way round period and to carry ahead initial formation
stalled at all generating stations through- and adequate supply of natural gas has activities of SEDA, a wing under leadership
out the country and Dhaka distribution been at stake due to depleting existing of an Additional Secretary of the Govern-
zone and transmission network at 230KV, gas reserves and non-exploration of new ment has been set up. With governmental
132KV and 33KV level. gas reserves. Development of renewable institutional support, the expectations are
The interface meters have been used as energy is one of the important strategies that the Renewable Energy Development
billing meters. This will be extremely ben- adopted as part of Fuel Diversification Pro- Program will gain momentum.
eficial for the energy auditing system. Op- gram. Government Power Utilities like Bangla-
erator’s performance will also be enhanced Under the existing generation scenario desh Power Development Board (BPDB),
significantly and accountability and trans- renewable energy has a very small share Rural Electrification Board (REB), Local
parency will be established in the energy to the total generation. However, under Government Agency like Local Govern-
auditing system. the changed perspective renewable en- ment Engineering Directorate (LGED) and
ergy would have a significant contribution a significant number of Private Sector
Remote Area Power Supply System (RAPSS) given the global climate change scenario agencies including NGOs are involved in
A part of the population lives in remote ar- and carbon trading prospect. renewable energy development. Noted
eas which are far away from existing grid The government has taken a systematic Public Universities and their affiliated Insti-
line and sometimes isolated from the main approach towards renewable energy de- tutes are involved in research and develop-
land. velopment with initiatives including devel- ment of Renewable Energy Applications.

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Resources Potential
Renewable Energy Potential in Bangladesh
Solar Enormous
Bangladesh is hoped to have enormous
potentiality in renewable energy devel- Wind Resource mapping required

opment. Some of the areas like solar PV, Limited potential for micro or mini hydro
Hydro (max. 5 MW).
the potential of development is already
Est. hydro potential: approx. 500 MW
proven. Bangladesh has fitting geographi-
Domestic Biogas System 8.6 Million Cubic Meter of Biogas
cal condition for solar power. Bangladesh
Rice Husk based Biomass gasification Power Plant 300 MW considering 2 kg of husk consumption per kWh
receives an average daily solar radiation of
350 MW considering 0.752 m3 of biogas consumption
4-6.5 kWh/m2. Solar photovoltaic (PV) are Cattle waste based Biogas power plants
per kWh.
gaining acceptance for providing electric- Table 4.
ity to households and small businesses in
rural areas. Development of off-grid solar Category Achievement
home solutions has achieved international SHS 45 MW
benchmark. Other Solar PV Applications including Solar Irrigation 1 MW
According to a survey, there is an exist-
Wind Energy 2 MW
ing market size of 1 million households
Biomass based electricity <1 MW
for Solar Home Systems (SHS) on a fee-
for-service basis in the off-grid areas of Biogas based electricity 1 MW

Bangladesh. At present the national grid Total 50 MW

is serving only 50% of the nearly 10,000 Table 5.

rural markets and commercial centres in
the country which are excellent market from 10 kW to 5 MW implementation of the moment. Government incentives like
for centralized solar photovoltaic plants. which is still at large. FiT can enhance the development process,
Throughout the country, different govern- Other renewable energy sources include but it is always difficult to source fund for
ment administrative offices, NGO offices, bio-fuels, gasohol, geothermal, river cur- such incentives especially under present
Health Centres, Schools, banks, police sta- rent, wave and tidal energy. Potentialities tariff rationalization structure. Only a com-
tions etc are functioning. In the off-grid lo- of these resources are yet to be explored.  prehensive large scale program with sup-
cations, these offices are either using tra- port to buy-down the cost of intervention
ditional means (lantern, candles, kerosene Installed Capacity of Renewable Energy can pave the way for Renewable Energy
wick lamps etc.) or operating their own Government utilities are involved in large development.
diesel gensets. scale grid connected renewable energy
However, potential of other renew- based power project development. On the Renewable Energy Development Program
able resources is still at the exploration other hand, private sector is involved with In line with the Renewable Energy Policy,
stage. Potential of Wind Energy is mainly off-grid home-based renewable energy so- the government has plans to develop at
in coastal areas and offshore islands and lutions. least 500 MW power from renewable en-
to determine extent of potential wind re- The first significant PV-based rural elec- ergy by 2015.
source mapping project is in process. Some trification programme was the Norshingdi Expected Public Sector Participation in
of the development partners and compa- project initiated with financial support program is:
nies come forward for wind mapping in from France. Since the introduction of SHS
different parts of the country. in 1996 it has become now the biggest Total Capacity
Bangladesh has strong potential for bio- renewable energy program in Bangladesh Solar 25 MW
mass gasification based electricity. More so far installed 900,000 units and ever
Wind 235 MW
common biomass resources available in increasing due to an integrated program
Total 260 MW
the country are rice husk, crop residue, undertaken by the government through its
wood, jute stick, animal waste, municipal financial institution, IDCOL. IDCOL’s pro-
waste, sugarcane bagasse etc. Exploration gram is considered as a successful model Recent Initiatives in Renewable Energy:
of these resources for electricity genera- for installation of SHSs in the world. 1. Govt. has exempted income tax for
tion is still at preliminary stage. Potentials Till now, national capacity of renewable next 5 years from commercial produc-
for utilizing biogas technologies derived energy based power is approx. 50 MW as tion from renewable energy
mainly from animal, kitchen and municipal shown in table 5. 2. 100 MW of wind power will be gener-
wastes may be one of the promising re- In a developing country like Bangladesh ated in the off-shore area of Anwara,
newable energy resources for Bangladesh. where meeting generation shortage is the Chittagong in IPP model; tendering is
Micro hydro and mini hydro have limited primary priority, least cost generation tech- under process
potential in Bangladesh with exception of nologies always rule the generation plan- 3. Power Development Board [PDB] has
Chittagong Hill Tracts. Hydropower assess- ning. Unfortunately, renewable energy undertaken a project in a remote
ments have identified some possible sites cannot compete to achieve grid parity at area Sullah to provide 600kW solar

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power under Climate mitigation pro- project. 230 W solar power in Angorpot and
gramme. 5. PDB and REB are distributing Solar Dahagram Chitmahal Area and in-
4. Rural Electrification Board [REB] has Home System (SHS) to the people liv- stalled 115W at their office building.
taken project for Solar Irrigation Sys- ing in the off-grid areas. 7. Solar PV with capacity of 21.2 KW has
tem. 40 irrigation pumps will be 6. PDB has already installed nearly 11 KW been installed at the Hon’ble Prime
brought under solar power under this solar power to the CHT area, nearly Minister’s office as a demonstration
8. Nearly 10MW solar plant will be in-
Type of Projects Capacity addition in MW
stalled by PDB in Sarihabari (2-4 MW),
Commercial Solar Projects 340 Rigional Training Office, Rajshahi (1
Social Sector Solar Projects 160 MW), Rajabarihat, Godagari (2-4 MW)
in IPP model. Preparation of tender
Total MW 500
documents is underway.
Table 6.
The Bangladesh Government has also re-
cently initiated 500MW Solar power pro-
Type of Projects gramme with the inspiration and support
addition in MW
Solar Irrigation 150 of Asian Development Bank. The strategy
Solar Mini Grid 25 of the mission is to install 500MW solar
power by 2016. The government will en-
Solar Park 135
courage private sector involvement in the
Residential & Commercial Bldgs 10
Solar Roof-top sector; with approximately 340MW for pri-
Industrial Bldgs 20
vate sector.
Total MW 340 Solar power is the most potential source
Table 7. among the renewable energy resources
in Bangladesh. This initiative of Bangla-
Type of Projects Capacity addition in MW desh Government could become a land-
Solar electrification in Health Centres 50 mark success story on how government’s
Solar electrification in Remote Educational Insitutions 40 commitment in combination with strong
Solar electrification at Union e-Centres 7
support from Development Partner could
achieve the targeted renewable energy
Solar electrification at Religious Establishment 12
development in a developing country.
Solar electrification at Remote Railway Stations 10
Under Commercial Solar Projects; the
Solar PV System in Government & Semi-Government Offices 41 categories are (see table 7).
Total MW 160 Under Social Sector; the categories are
Table 8. (see table 8) 7

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