February 09, 2006


Energy availability and its proper utilization is the mail indicator of the socio-economic development, therefore the Government of Bangladesh has given continuing attention to the overall development of energy sector. It involved survey, exploration, exploitation and distribution of indigenous natural gas, survey and exploitation of other sources like hydropower, coal and peat, establishment of petroleum refining facility and distribution systems, and establishment of power generation plants and networks for transmission and distribution of electricity. Despite all these efforts per-capita consumption of commercial energy and generation of electricity in Bangladesh is one of the lowest among the developing countries, 115 kgoe and 144 kWh per year respectively (FY2003). Though Government of Bangladesh has declared its vision to provide electricity for all by the year 2020, access to electricity in Bangladesh is one of the lowest in the world; coverage today stands at around 32% of the total population. However the rural areas of Bangladesh, where 76% of the population lives, have an even lower coverage and are seriously deprived of the electricity facility.

In comparison to the 11666 GWh electricity generated annually, the Power System Master Plan (PSMP) projects a requirement of 24160 GWh in the year 2005. This implies an increase in peak demand from 2200 MW to 4600 MW by 2005 for which capacity addition of about 3350 MW is required by 2005. The total investment required to achieve such capacity enhancement, is Taka 176 billion or US$ 4.4 billion. The corresponding investment requirement for expansion & reinforcement of transmission and distribution system would be about US$ 2.2 billion, bringing the grand total to US$ 6.6 billion.

The likelihood of securing such a substantial volume of investment for power generation alone through the public sector is remote. Besides, competing demands on government resources and declining levels of external assistance from multilateral/bilateral donor agencies further constrain the potential for public investment in the power sector. Recognizing these trends, GOB amended its industrial policy (NEP – 2004) to enable private investment in the power sector. GOB also adopted the recommendations contained in the report on Power Sector Reforms, prepared by a high level Inter-Ministerial Working Group, for restructuring the power sector and promoting private sector participation in the generation of electricity in order to attain higher economic efficiency. The Government is strongly committed to attract private investment for installing new power generation capacity on a build-own-operate (BOO) basis.

Table: Primary commercial energy consumption by fuel (million tones oil equivalent)
Country Gas Oil Coal Hydro-electricity Nuclear Energy Total
Bangladesh 11.9 4.2 0.4 0.3 -- 16.6
World 2420.4 3767.1 2778.2 634.4 624.3 10224.4
(Source: BP Statistical Review of World Energy June 2005)

On the other hand, the share of Renewable Energy Technologies (RETs) in total electricity production is very low at this time although biomass resources supply around 67% of the total energy needs. The target proposed in the draft of Renewable Energy Policy, under consideration of the Government, is to generate power utilizing new renewable energy technologies to share 5% of total demand by 2010 and 10% by 2020.

In 1988, Bangladesh Atomic Energy Commission (BAEC) introduced the SPV system in a cyclone shelter for the first time in Bangladesh. Now micro-credit and micro utility financing systems are doing better to improve the quality of living condition of rural people. Almost around 70,000 SHS has been installed by now but it is still a very negligible amount, only 1.5% of rural peoples are electrified. Day by day the number of installed system is increasing very rapidly and different organizations are coming forward to fulfill the target set by the Government, 10% of total electricity from renewable energy by 2020.

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