Bangladesh – one of the countries most vulnerable to climate change – generates most of its renewable energy from small scale installations. In 2008, it set a target of 5% renewable energy share, equivalent to 800MW by 2015. It claims to have installed 403MW of renewable capacity, including a large hydro project of 230MW.
About 60% of the population has access to electricity. As much as 98% of the country’s 10.8GW installed capacity is based on fossil fuels (of which about 70% is natural gas), with large hydro representing the remaining 2%. Due to a rise in economic activity, Bangladesh installed more than 2GW of oil and diesel based rental power plants during 2010-2013. These rental power plants provide a quick but expensive solution to meet power demand. They are usually set up by private players for terms of three to seven years, with the purpose of meeting energy deficit, peak deficit and seasonal demand.
The government owned generation utility, Bangladesh Power Development Board (BPDB) is the sole buyer of all of the power generated in the country and sells it to the distribution utilities. Transmission and distribution of electricity is controlled by government owned utilities that serve their respective allocated zones.
Bangladesh’s Sustainable and Renewable Energy Development Agency (SREDA) addresses renewable energy policy and regulatory matters. Powercell Bangladesh carries out technical assessments for the government through its Sustainable Energy division. Bangladesh has had success installing solar home systems (SHS) that were introduced by Grameen Shakti through a micro-credit facility. This solar off-grid initiative was scaled up through the $500m World Bank funded Rural Electrification and Renewable Energy Development (RERED) project initiated in 2003. This was followed by the $386m RERED II project in September 2012. By the end of 2014, about 3.5m, or 10%, of the country’s households had installed SHS systems. The target of the program is to reach 6m SHS installations by 2016.
The country has made gains in biogas and clean cookstoves programs. In new renewable capacity development, Bangladesh has its main focus on solar and wind. The country does not have much small hydro potential. There are no feed-in tariffs for renewable energy projects so far. SREDA is deliberating a draft renewable energy policy and is considering the introduction of a feed-in tariff along with other incentives for utility scale projects.
In 2013, Bangladesh launched a ‘500MW by 2016’ solar program, which was developed with the help of Asian Development Bank. Under the plan, the government intends to install 340MW through private investments in irrigation, mini grids, utility scale and rooftop projects. The remaining 160MW is targeted for hospitals, schools, railways and government offices. More than 35MW of solar projects are under various stages of development under this scheme. BPDB is seeking financing from additional international financial institutions.
In May 2014, BPDB signed a deal for the development of a 60MW wind farm in Cox’s Bazaar. The country continues to assess its wind potential. BPDB announced a 100MW project in 2013 but did not proceed with the plans. The country is also rolling out pre-paid meters in urban areas to curb losses.
In 2010, the country developed a Power System Master Plan for 2030 with cooperation from Japan International Cooperation Agency and Tokyo Electric Power Company. The plan set out the following priorities: 1. Develop domestic energy sources to ensure at least 50% share. This includes development of coal and natural gas resources. 2. Generate 50% of power from coal, 25% from natural gas and 25% from other sources. This includes an intermediate installation target of 20GW by 2021. 3. Adopt efficient and low carbon technologies for thermal power generation to limit emissions. 4. Build a deep sea port for fuel imports and transmission lines. 5. Reform policies to ensure realistic tariffs and establish an organization for fuel procurement. 6. Promote socioeconomic development through increased energy access by promoting rural electrification and industrial growth.
Score Summary
Bangladesh scored 1.21 in Climatescope 2015, ranking it 24th among countries overall. The country’s ranking fell six places on the list from 2014, largely due to a nine-place decline in its rank on Clean Energy Investment Parameter II in general and on its Green Micro Finance Indicator, in particular.
On Enabling Framework Parameter I, Bangladesh scored 1.30 thanks to a particularly good performance on its Distributed Energy Regulatory Framework Indicator.
On Clean Energy Investment and Climate Financing Parameter II, the country scored 0.66, down from 0.96 in 2014.
On Low-Carbon Business & Clean Energy Value Chains Parameter III, the country saw its score unchanged at 2.57. On Greenhouse
Gas Management Activities Parameter IV, Bangladesh scored just 0.65 because of a lack of effective emissions reduction policies.