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Bangladesh’s Primary Energy Consumption

 December 4, 2017

Bangladesh is one of the world's most densely populated countries, with limited energy resources. The country depends on natural gas for much of its energy needs. But with domestic reserves being rapidly depleted, and energy demand rising, other solutions must be found.

According to the BP Statistical Review of World Energy, the consumption of natural gas, which is a clean burning fuel, went up to 20 mtoe in 2012 from 13.4 mtoe in 2006. The consumption of natural gas stood at 24.8 mtoe in 2016 with 54 per cent electricity in the country being generated through natural gas.

Since natural gas reserves of Bangladesh are facing a decline, the country is becoming ambitious about using coal to fuel its growing economy. By 2030, Bangladesh wants 50 per cent of its electricity to be generated through coal, up from about two per cent now although experts have warned of the effects of increased greenhouse gasses in the atmosphere in an a country already vulnerable to climate change risks.

Primary energy consumption of Bangladesh has been increasing steadily at an annual average from 18 mtoe in 2006 to 32.4 in 2016, as per the BP Statistical Review of World Energy. The country’s oil consumption has also risen in the past decade, registering an upward trend from the year 2011. While the rate of oil consumption remained mostly steady from 2006 to 2010 at around 3.9 mtoe, it went up to 5.1 mtoe in 2011.

The Asian Development Bank Economics Working Paper says that Bangladesh has not taken serious steps to use its coal resources. “As demand continues to grow, this may become the leading concern of energy policy, and will spill over into other areas as subsidizing energy imports impose increasing strain on government finances,” the paper reads. 

The paper also says: 

“Diversification of the power sector fuel mix by introducing coal provides good macroeconomic indicators but results in higher carbon emissions. Investing the gas revenue in physical and social infrastructure provides the best macroeconomic indicators. This best policy option, however, further increases carbon emissions.”

Bangladesh has made huge process in providing electricity to people. 

A decade ago, less than 50% of people in Bangladesh had access to electricity. Today, 80% have it, underlining the progress made by Bangladesh in providing electricity to all its citizens. The Energy Ministry claims that, by 2021, all those households will be connected to the national grid, and by 2021, a series of new power plants will have nearly tripled the country’s capacity.

However the key challenges still plague Bangladesh’s power sector, as per the ADB report, including ensuring gas availability for generation, cost recovery and financial sustainability of power sector agencies and mainstreaming renewable energy. Currently renewable energy constitutes just 2.7 per cent of the energy mix of Bangladesh.  Although solar power has a great deal of potential in Bangladesh, the problem is that it needs vast land to install photovoltaic panels. Bangladesh being a densely populated country open large uninhibited land is scarce. 

One of the biggest challenges Bangladesh faces is to find new resources to provide long-term energy security and fuel diversity. The country is exploring use of coal-fired power plants with a combination of private and public initiatives. 

Coal account for a paltry 1.6% of the energy mix. But if the Bangladesh’s plans come through, coal will account for more than half of Bangladesh’s electricity generation supply by 2022.

Although the government has repeatedly assured the public that new technology means the coal plants will not harm the environment, coal by its very nature remains a dirty fuel. Bangladesh is also among the 175 countries that signed the Paris climate agreement, and while it continues to have one of the lowest per capita rates of emissions, building coal-fired power plants doesn’t go well with the long-term energy security.

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