Power-sector reforms could save Bangladesh $1.2 billion annually by reducing subsidies to the Bangladesh Power Development Board, according to a report by the Institute for Energy Economics and Financial Analysis (IEEFA). The savings would stem from measures such as shifting industrial power demand from captive generators to the national grid, adding 3,000 MW of renewable energy, cutting load-shedding to 5%, and limiting transmission and distribution losses to 8%.
The report highlights the sector’s overcapacity issue, with a 61.3% reserve margin exacerbating BPDB’s subsidy burden, which reached Tk 382.89 billion in FY24. Despite power tariff hikes, cumulative losses and capacity payments for idle plants persist.
IEEFA’s roadmap recommends reducing reliance on fossil fuels, modernizing the grid, and promoting energy efficiency. Transitioning industries to grid power and retiring 4,500 MW of fossil-fuel plants could align peak demand with a more sustainable reserve margin by 2030, reducing financial strain.
Comment here