Next power generation-mix for Bangladesh: Outlook and policy priorities

Bangladesh's strategy for economic development relies heavily on its energy and power policy, searching for an efficient implementation of planned power generation-mix of gas, oil, coal and hydro. At present, the contribution of gas is around 83% of total power generation, which is much higher than other traditional fuel sources. To reduce this single-source dependency on gas, Bangladesh needs to initiate alternative option to sustain its mid-term power generation-mix in addition to achieve its long-term energy security. Government of Bangladesh has already initiated a new master plan for the development of power generation under fuel-diversification scenario. In this view, local coal production and imported coal would assist the power planners to reduce the sole dependency on gas-driven power plants. In addition, cross-border hydropower import from Bhutan, Myanmar and Nepal would also be a vital policy imperative to maintain the country's long-term energy security. Nonetheless, adding extra power to production side is certainly essential, demand side management through efficient energy use and energy conservation could also be of assistance to the release the existing crisis to a greater extent. - Highlights: • In 2010, the contribution of gas in power generation is about 88% in Bangladesh. • Installed capacity (4.29%) and actual power generation (3.75%) from coal is very low. • Local coal-based power plants would be an alternative for next generation-mix. • Cross-border hydropower trade with Bhutan, Myanmar and Nepal would be another alternative. • Public-private partnership (PPP) could solve financing constraints to install new plants