Country’s energy situation ‘grim’, balanced policy needed: BERC chairman

BERC Chairman Jalal Ahmed calls for updating the country’s 1996 energy policy to ensure long-term energy security and sustainability.

He said Bangladesh has not conducted adequate reserve studies or undertaken sufficient exploration of its domestic gas resources for years, while greater emphasis has been placed on imports.

“We have installed two FSRUs, whereas we actually need four,” he said, adding that even if the government finalises a new FSRU project immediately, it could take 24–30 months to become operational.

“So, the situation is actually grim. There is no scope to overcome this situation without good management,” he said.

He said renewable energy can play an important role in reducing dependence on expensive fossil fuels, particularly furnace oil and diesel, but cautioned that Bangladesh’s renewable potential has to be assessed realistically.

Terming solar power as the country’s most promising renewable source, while noting limitations in wind and hydropower, the BERC chairman said, “Bangladesh receives only around 3.1–3.9 hours of effective sunshine a day, making battery storage important for large-scale solar integration. However, battery storage remains a costly option and requires substantial investment.”

He said the country therefore needs to balance renewable generation with baseload power and storage rather than relying on a single energy source.

Jalal also criticised the country’s excessive installed power generation capacity, saying Bangladesh has around 30,000MW of installed capacity against demand of roughly 17,000MW, while industries have substantial captive generation capacity.

This excess capacity has contributed to higher capacity payments and subsidies, he said.

“Capacity charge itself is not undesirable. It exists wherever power plants are built. But the problem is when unnecessary capacity is created through one-to-one negotiations under special laws, with rates that may not be transparent,” he said.

He said Bangladesh should gradually replace expensive oil-fired generation with renewable energy while maintaining adequate baseload and storage support.

The chairman also linked renewable energy investment directly to Bangladesh’s export competitiveness, particularly the garment sector.

He said the apparel industry will increasingly need to shift towards renewable electricity to retain access to major export markets, particularly the European Union, which accounts for around 52–55% of Bangladesh’s total exports.

Large industries are already installing rooftop solar, he said, but smaller factories would require access to low-cost financing and, where rooftop space is unavailable, could potentially rely on merchant power arrangements.

He said Bangladesh Bank’s low-cost financing facilities can be strengthened so industries can access loans at around 5% interest for solar investments.

The BERC chairman said the country therefore cannot expect an overnight solution to its energy crisis.

“We have short-term solutions, medium-term solutions and long-term solutions. We have to look at all three simultaneously,” he said.

He also called for an updated energy policy, saying the failure to formulate a new policy after 1996 has partly been linked to disagreements over coal policy.

“If we want long-term sustainability, we need a balanced energy policy,” he said.