An alignment of economics, demographics, climate change and technology has set in motion an ongoing transformation of the global energy system, which has also truly reflected in UN Sustainable Development Goals.
The Government of Bangladesh is committed to the development of a stable and sustainable power supply that will increase electricity access, enhance energy security, reduce poverty and mitigate climate change.
Government has been trying to mitigate these challenges by undertaking plans and programs to ensure supply of electricity according to demand and to maintain a steady GDP growth rate of over six percent for the next few years.
The Power System Master Plan 2010 set goals for fuel diversification with an emphasis on increasing the role of renewable energy in the power generation mix.
The Government has set a goal of total electrification by 2020, and has called for the development of domestic renewable energy resources to ensure that the share of domestic energy supply would remain over 50 percent.
It is recognizes the important role that renewable energy can play in achieving these goals.
Renewable energy resources will ensure a stable and universal power supply that will reduce poverty by sustainable socio-economic growth.
Though Bangladesh has a negligible carbon footprint, but remains one of the most vulnerable nations in the world for the effect of climate change, and we recognize the important role that renewable energy can play in reducing associated risks.
As a low-lying country with many rivers, Bangladesh has a very high flood risk, both due to monsoons and sea-level rise associated with climate change. Rising temperatures have already begun to shorten the life cycle of rice; reducing yields.
Low crop production could increase poverty up to 15 percent by 2030. Higher water levels could lead to higher incidence of waterborne disease, such as cholera, and result in forced migration due to flooding.
Bangladesh is classified as a developing economy by the IMF. Its economic growth has averaged nearly six percent per year since 1996.
Bangladesh’s GDP was US$ 196.6 billion in Fiscal Year 2014-2015, with manufacturing (17 percent), motor vehicles (13 percent), service (13 percent), and agriculture (12 percent) being the largest value-added sectors.
The economy lost about US$ 2.2 billion (about 1 percent of GDP) as a result of political unrest in 2013 and January 2015, but economic growth in Bangladesh has largely been resistant to political instability, natural disasters, poor infrastructure and global shocks.
Bangladesh was less affected by the global financial crisis because of increased international demand for low-cost exports, and remittance growth of 22.5 percent in 2008-2009.
Inflation in Bangladesh has been constrained by reduced global oil prices and conservative monetary policies.
Growing population, with improved living standards and increasingly concentrated in urban centers, have dramatically raising the demand for energy services.
At the same time, a growing consensus over the dangers posed by climate change prompted people and governments worldwide to seek ways to generate that energy while minimizing greenhouse gas emissions and other environmental impact.
Countries are increasingly looking to reduce their dependency on imported fossil fuels. By reducing energy imports, countries are striving for greater energy independence; avoiding potential supply disruptions, high energy price and price fluctuations.
The technology once considered as niche is becoming mainstream. Renewable energy now is competitive on a cost per kilowatt-hour basis.
As most renewable energy technologies have a relatively high ration of upfront to operating costs, their viability is particularly sensitive to the cost of capital.
There is growing evidence that renewable energy has a positive ripple effect throughout society, simultaneously advancing economic, social and environmental goals.
Bangladesh has considerable renewable energy potential, and significant past experience in developing renewable energy projects.
Most of the existing RE investment has been in offgrid technologies such as solar home systems (SHS), solar mini and micro-grids, and solar irrigation pumps.
The government has set several investment targets for grid-connected technologies including utility-scale solar, wind, and waste-to-energy.
Despite significant potential the development of these grid-connected renewable energy technologies, however, has been slow to materialize.
There are a number of regulatory, financial and technical barriers that, if addressed, could accelerate renewable energy investment in Bangladesh.
Improved regulations, such as establishment of a formal benchmark tariff and provisions for compensating mini-grid investors after transmission expansion, would reduce risk and send strong signals to investors.
Grant funding and low interest financing can help address concerns about affordability for both grid-connected and off-grid projects.
Reduced financing costs can also offset the high cost of procuring land for projects, land scarcity being one of the key barriers to investment.
Overall the paradox of the investment situation is that increased experience with renewable energy projects will lead to increased investment.
Successful renewable projects will provide better access to data on renewable energy; demonstrate successful business models that can be replicated by local banks; and allow local workers the opportunity to learn the necessary technical skills.