Will solar power reduce energy costs in Bangladesh?

The existing renewable energy tariff in Bangladesh is half the cost of electricity generated by oil-fired power plants. Solar power for daytime peak application and evening peak use, supported by two- to three-hour battery backups, will allow the BPDB to significantly lower the power generation cost and minimise capacity payments.

How much solar power does Bangladesh have?

The country has a combined solar and wind capacity of 663MW (2.35% of the installed capacity of 28,166MW) connected to the grid, substantiating that the system is heavily dominated by fossil fuel-based plants. More than 40% of these plants are privately owned, and 9% are joint ventures between Bangladesh and other countries.

Is Bangladesh's Power Sector Sustainable?

The power sector of Bangladesh is in the grip of an aggressive, fossil-fuel-based capacity expansion trend. The situation highlights several challenges, such as power system overcapacity, capacity payments, revenue shortfalls and subsidy burden. However, a suitable action plan will help steer the power sector towards sustainability.

Can Bangladesh stop adding fossil fuel based power capacity?

This capacity will be more than enough to meet the country’s power demand in 2030. Therefore, Bangladesh can stop adding fossil fuel-based power capacity beyond under-construction projects. The existing renewable energy tariff in Bangladesh is half the cost of electricity generated by oil-fired power plants.

How much does oil-fired power cost in Bangladesh?

IEEFA’s analysis shows that the average power generation cost from oil-fired plants was about 23 Bangladeshi Taka (Tk per kilowatt-hour (kWh) (US20¢/kWh) against the average generation cost of Tk11.33/kWh (US9.6¢/kWh) in the fiscal year (FY) 2022-23.

Does Bangladesh have a surplus generation capacity?

The installed power generation capacity of Bangladesh is 28,166 megawatts (MW) against the maximum demand of 17,200MW, recorded by the Bangladesh Power Development Board (BPDB) in 2024. This shows that the power sector has a surplus generation capacity of 38.9%. The surplus capacity rises to even more than 60% during winter.