Bangladesh power review: Overcapacity, capacity payments, subsidies and tariffs are set to rise even faster
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Key Findings
Bangladesh's power system is headed for financial disaster due to overcapacity in coal and LNG power.
Investments in renewable energy and grid are needed to meet lower-than-expected demand slowed further by COVID-19.
Executive Summary
Bangladesh’s current plan to increase power capacity, based on a switch to expensive imported coal and LNG, is putting the country on course for deeper financial stress in the power system, similar to the strains already emerging in other countries. The Covid-19 pandemic will make this situation even worse.
Comparing IEEFA’s power demand forecast for Bangladesh to the planned capacity additions envisaged in the Revisited Power System Master Plan 2016 (PSMP) shows that the nation is on course to build far more capacity than it will need.
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