Shafiqul Alam

The technical faults in one of the two floating storage and regasification units (FSRUs) in Bangladesh, detected on July 21 this year, have had a cascading effect on various sectors.

With domestic gas production declining rapidly, imported fossil fuels have accounted for an increasing share in Bangladesh’s energy system over the years, making energy significantly costlier.

Like the rest of the world, Bangladesh is currently grappling with the geopolitics-led energy supply disruption, described by the International Energy Agency (IEA) as the biggest ever threat to energy security.

Unless Bangladesh makes efforts to control power generation costs, price hikes alone will not significantly minimise the subsidy burden.

Given the limited success of previous master plans in improving energy security and accelerating renewable energy, it is imperative for Bangladesh to design an inclusive policy formulation process.

The power sector’s high reserve margin, capacity payment obligations, and reliance on imported fossil fuels have weakened the Bangladesh Power Development Board’s (BPDB) financial strength.

The combination of soaring natural gas demand and plummeting domestic production has pushed the Bangladesh government to diversify its energy sources. In the past, various plans, including the Integrated Energy and Power Master Plan 2023,

The recent announcement to build a new coal-fired power plant to generate cheaper electricity than oil-fired peaking plants further highlights the lack of policy coherence.