AS THE economy revives from the July uprising, concerns loom regarding the nation鈥檚 way forward to attaining the objective of undergoing the renewable energy transition in line with the 2030 Sustainable Development Goals. A sub-target under SDG 7 makes it pertinent for all signatories of the pact, including Bangladesh, to substantially raise the share of renewable (or clean) energy in the yearly final energy consumption portfolios. Rather than enhancing this share, the energy sector in Bangladesh has, rather, intertemporally become more dependent on non-renewable, or unclean, energy resources.
As per the estimates of the Energy Institute Statistical Review of World Energy, renewable energy accounted for merely 1 per cent of Bangladesh鈥檚 primary energy consumption figures for 2023, albeit this share was around 6 per cent in the mid-1980s. Besides, as the World Bank鈥檚 calculations say, from 2000 onwards, the share of renewable energy in Bangladesh鈥檚 total final energy consumption levels declined by more than 35 percentage points. As far as electricity production is concerned, Bangladesh generated 98.5 per cent of its total electricity output in 2023 from both locally sourced and imported fossil fuels, mostly contributed by natural gas.
In addition, a look into local statistical records provided by the Sustainable and Renewable Energy Development Authority shows that renewable energy鈥檚 share in Bangladesh鈥檚 total energy production was only around 3.25 per cent in 2019 although SREDA ambitiously aims to stretch this share to 20 per cent by 2030. However, achieving this target beckons to be highly cumbersome for Bangladesh unless the government undertakes timely and proactive measures.
In a nutshell, the statistical estimates not only portray the utter failure of the power sector in Bangladesh to make progress regarding the renewable energy transition objective but also indicate a persistent increase in the nation鈥檚 chronic reliance on non-renewable energy. Hence, despite Bangladesh excelling in terms of other sub-targets of SDG 7 such as ensuring electricity accessibility for all, poor performances concerning the renewable energy transition objective cast a shadow of doubt on the nation鈥檚 prospects of holistically complying with the energy sustainability-related commitments it made by ratifying the 2030 SDG agreement.
Furthermore, given that Bangladesh is well-recognised as one of the most climate-vulnerable nations in South Asia and is also experiencing extremely poor air quality levels, there is a dire need for energy policy-makers to conceptualise credible plans that can enable the nation to gradually augment renewable resources in its energy sector. These policies, apart from contributing to the energy sustainability objective corresponding to SDG 7, are expected to facilitate the goal of attaining 鈥榸ero net carbon emissions鈥� as well. This is especially because renewable energy consumption does not have high risks of emitting hefty volumes of greenhouse gases, contrary to the extent of greenhouse emissions exerted by their non-renewable counterparts.
Consolidated interventions are needed so that future energy policies can counter the traditional factors that have inhibited Bangladesh鈥檚 scope of walking on renewable energy transition pathways. In this regard, a three-set strategy can be considered.
Firstly, it is important to identify new sources through which renewable energy development projects can be financed in Bangladesh to address the issues of financial constraints. It is known that private investment outweighs public investment in renewable energy development initiatives across Bangladesh. The amount of finance is, nevertheless, insufficient to make noteworthy progress regarding the development of the renewable energy sector. This lack of domestic finance scenario can be tackled by two fundamental mechanisms.
First, it is important to gradually increase the share in budgetary allocations for the renewable energy sector. However, considering public revenue crunch, raising such allocations would be difficult. It is, nevertheless, of relevance to identify the loopholes through which public funds given to the non-renewable energy sector in Bangladesh remain under-used or misused. Provided this can be done, reallocation of public funds from the non-renewable energy sector to the renewable energy sector should not be a major challenge.
Besides, incentive-based strategies should be considered to encourage more private-sector participation so that private finance for renewable energy projects can be ramped up to a large extent. In this context, the introduction of loans at concessional interest rates and flexible repayment arrangements could be effective in channelling private funds towards the renewable energy sector.
Second, given that energy-related foreign investment predominantly takes place in the fossil fuel-based energy sector in Bangladesh, it is high time to reverse this trend. For this to happen, consolidated financial policy reforms are needed to provide stable investment climates to foreign investors interested in financing renewable energy development projects in Bangladesh. Furthermore, successful attempts should be made on Bangladesh鈥檚 end to acquire foreign more funds from international climate financing agencies, particularly for research and development-led development of renewable energy technologies.
Besides, as the nation heads towards the LDC graduation in 2026, making Bangladesh no longer eligible for the least developed countries fund, it is of utmost importance to look for new multilateral and bilateral loaning agencies that may finance renewable energy development programs in Bangladesh.
Secondly, it is not only imperative to expand the national grid all over Bangladesh but also to focus on making sure that such grids are compatible with renewable energy integration to address infrastructural constraints. In addition, developing infrastructure for promoting off-grid electrification via renewable energy sources is also important, especially to light up remote areas with limited or no in-grid connectivity. For these energy infrastructural amendments to take place, apart from scaling up financial supports and expanding research and development-related investment, it is also pertinent to make land acquisition processes less complex for setting up new renewable energy-based power plants.
In this regard, selecting specific zones for renewable energy development purposes is important which, in turn, would require government intervention in terms of allotting state-owned lands, in particular, for operating renewable energy projects. Accordingly, unused land located in coastal and hilly areas can be considered for setting up renewable energy firms while marginal, fallow and degraded land could also be used in tandem. Alongside land acquisition, it is also necessary to focus on human resource development so that skilled labour supply can be ensured for employment within the renewable energy sector. Regarding this, it is highly important to engage educational and training institutions in conducting regular skills development workshops.
Thirdly, emphasising the issue of governance, forming a dedicated renewable energy development task force is strongly recommended. One of the core objectives of this task force would be to supervise the renewable energy financing initiatives, both in the context of domestic and foreign sources of finance. This would ensure transparency of fund collection and use processes so that optimum results can be ensured. Besides, this task force would also have the responsibility of overseeing progress in terms of making optimal use of unused solar power-based installed capacities in Bangladesh.
Despite having substantial prospects of boosting off-grid electrification rates by integrating solar power, not much progress took place in this regard. Hence, the task force should be able to recognise the constraining factors that have contributed to such discrepancies in installed and actual solar power capacities in Bangladesh. Further, the task force should work to initiate collaborative engagements among different stakeholders within the renewable energy sector so that effective guidance and expert advice can be provided for efficient energy policy-making purposes.
More important, the task force should work to not only enhance renewable energy consumption levels in Bangladesh but also enable mechanisms to drive up the share of renewable energy in financial energy consumption portfolios, much in line with targets corresponding to SDG 7. Lastly, the task force should focus on building public awareness by communicating the benefits of using renewable energy as an alternative to conventional sources of non-renewable energy.
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Muntasir Murshed is a research fellow at the Bangladesh Institute of Development Studies.
