Bangladesh Demands $1.7 Billion a Year for Green Energy Transition

• Funds needed until 2041 to produce 40% from renewables: IEEFA
• IEEFA Says faster transition will decrease heavy subsidy burden

Bangladesh needs as long as $1.71 billion each year over the following 18 years to relocate far from expensive fossil-fuel imports and produce 40% of its electricity from renewable resources, according to the Institute for Energy Economics and Financial Analysis.

The financial investment needed for boosting renewable energy capacity is less than the power market's growing $2.82 billion government subsidy in the 2021-22 fiscal year, which is almost 152% higher than the previous year, according to a report released on Wednesday by the US-based think tank.

A much faster transition to sustainable resources will free up financial resources that or else wind up as subsidy repayments, IEEFA said. That may be vital to protect Bangladesh from future worldwide energy shocks. In the past 14 years, the South Asian nation has swiftly increase its electrical energy generation capacity greater than fourfold as it sought to fill up rising demand as well as stay clear of power blackouts.

However that has left the country reliant on imported fossil fuels as well as less than 5% of its energy originates from sustainable sources. Therefore, Bangladesh last year asked the International Monetary Fund for a $4.7 billion finance package while the country grappled with an energy dilemma as commodity rates rose adhering to Russia's invasion of Ukraine. Climbing import prices broadened the country's trade deficit, triggering the regional currency to damage as well as foreign gets plunge.

" Bangladesh's electrical power generation version appears unsustainable without a clear transition pathway," said Shafiqul Alam, an IEEFA analyst who authored the report. "Policymakers should elevate their renewable energy targets."

While higher subsidies are eventually passed on to consumers, Bangladesh's power market subsidy burden in the current fiscal year finishing June will still likely be greater than the previous year, Alam said.

Analysis by IEEFA reveals that the existing power system can instantly include 1,700 megawatts to 3,400 megawatts of solar power throughout the day and 2,500 megawatts to 4,000 megawatts of wind power in the evening, minimizing making use of pricey heating system oil-based power generation.

The action will certainly also aid reduced typical electrical energy generation costs, according to the brain trust's report. IEEFA price quotes show that the levelized expense of electricity from roof and utility-scale solar is around $0.05 each and $0.072 per unit specifically, contrasted to the present average of $0.084 estimated by the Bangladesh Power Development Board.