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Bangladesh plans energy transition with audits, renewables
The government has unveiled a long-term roadmap to transform Bangladesh's power sector through mandatory industrial energy audits, greater investment in renewable energy and sweeping governance reforms aimed at reducing fuel imports, cutting electricity costs and ensuring a more reliable power supply.
The strategy, outlined in the national budget, focuses on improving energy efficiency, expanding clean energy generation and addressing long-standing structural weaknesses that have increased the financial burden on the sector.
Energy efficiency at the forefront
As part of the plan, the government will strengthen energy audits across major industries to reduce energy waste and encourage designated consumers to adopt energy-efficient technologies and optimise electricity use.
The initiative comes as Bangladesh faces rising electricity generation costs due to declining domestic gas production and growing dependence on imported liquefied natural gas (LNG). More than 40 percent of the country's electricity generation capacity is gas-based, leaving the sector highly exposed to global fuel price volatility.
Renewables to reduce fuel dependence
To lessen reliance on imported fossil fuels, the government plans to accelerate renewable energy development while making better use of domestic energy resources.
The budget proposes incentives for local manufacturing of renewable energy equipment, including solar panels, wind turbine components and battery storage systems.
Bangladesh aims to generate 20 percent of its electricity from renewable sources by 2030, with the share expected to rise to 30-50 percent by 2050.
Planned initiatives include expanding rooftop solar installations, developing utility-scale solar parks, assessing wind potential in coastal areas, piloting waste-to-energy projects and preparing a National Energy Storage Roadmap to improve grid flexibility.
Expanding power infrastructure
The government plans to raise electricity generation capacity to 35,000MW by 2030 while expanding the national transmission network to 25,000 circuit kilometres.
Construction of the 2,400MW Rooppur Nuclear Power Plant is progressing, with fuel already loaded into one reactor. Around 300MW is expected to be connected to the national grid by August 2026, while the first 1,200MW unit is scheduled to begin commercial operation in January 2027.
The long-term goal is to establish a modern, affordable, uninterrupted and environmentally sustainable electricity system.
Reforming the sector
The budget document attributes the sector's financial challenges to years of unplanned policies, corruption, mismanagement and inefficient investment decisions.
It says capacity charge mechanisms enabled significant financial losses, while several power projects undertaken during the previous administration included costly contractual obligations that increased the country's dependence on expensive electricity purchases and fuel imports.
The widening gap between electricity generation costs and retail tariffs is expected to push government subsidies beyond Tk 40,000 crore in the current fiscal year.
Although Bangladesh's installed electricity generation capacity has reached 28,919MW, including imported electricity and grid-connected renewable power, ensuring uninterrupted and quality supply remains a challenge.
Governance and modernisation
The government plans to implement reforms across electricity generation, transmission and distribution through short-, medium- and long-term programmes.
Key measures include improving transparency and accountability, strengthening oversight, retiring inefficient power plants, modernising existing facilities and adopting a least-cost power generation strategy.
Authorities also plan to review capacity charges and power purchase agreements, modernise the grid through smart technologies, reduce system losses and expand electricity access to remote and island areas.
Future power plants will be developed through competitive bidding to help keep electricity tariffs affordable, while metropolitan areas will gradually receive underground distribution lines and substations.
The draft Power Sector Strategy Paper (2026-2050) also proposes wider deployment of advanced technologies, including SCADA, Geographic Information Systems (GIS) and Advanced Metering Infrastructure (AMI), alongside fully automated electricity connection and billing services.
Through industrial energy audits, renewable energy expansion and governance reforms, the government hopes to build a more efficient, resilient and financially sustainable power sector capable of meeting Bangladesh's growing electricity demand over the coming decades.