Efficient energy use is crucial

At a time when the country is grappling with high global fuel prices, dollar crisis, and persistent energy insecurity, a new report has revealed an encouraging finding. According to the Institute for Energy Economics and Financial Analysis (IEEFA), improved energy efficiency saved Bangladesh an estimated $3.3 billion in the fiscal year 2023-24 by reducing fossil fuel consumption and avoiding energy imports equivalent to seven million tonnes of oil. This achievement clearly shows that efficient energy use is not only environmentally beneficial, but it could also be a vital economic strategy for the country.

The report attributes these savings to efficiency gains across households, industry, and the power system. Widespread use of LED lighting, along with energy-efficient fans and air conditioners, helped reduce electricity demand in homes. Meanwhile, industries upgraded boilers, furnaces, and captive power plants, and adopted waste-heat recovery technologies. Collectively, these measures enabled the economy to maintain the same level of output while consuming significantly less fuel.

These gains are also the result of long-term policy planning. The Energy Efficiency and Conservation Master Plan, adopted in 2016, set a target of reducing energy intensity by 20 percent by 2030. Between FY2014-15 and FY2023-24, energy efficiency reportedly improved by 13.64 percent, with momentum accelerating after FY2020-21, as global fuel volatility and domestic supply disruptions made efficiency a priority. IEEFA notes that Bangladesh is now on track to meet its national efficiency targets and updated climate commitments, potentially ahead of schedule. This is truly encouraging.

However, as the report rightly points out, vast opportunities remain untapped. Many captive power generators continue to operate inefficiently, and wider adoption of efficient motors, electric boilers, and modern machinery could further reduce fuel use and LNG imports. At the same time, stronger enforcement of appliance standards, building codes, and energy labelling is essential to secure real and lasting savings. Unfortunately, the recent increases in import duties on key components of LED lights and energy-efficient appliances could push price-sensitive consumers towards cheaper, inefficient alternatives. This is an issue the government must urgently review.

Energy efficiency has proven to be one of the most cost-effective ways to strengthen energy security, ease pressure on foreign exchange reserves, and build resilience against global fuel shocks. The government must, therefore, treat energy efficiency as a strategic national priority, ensuring close coordination among regulators, industries, and financial institutions to sustain and expand these gains. Equally important is accelerating the transition to clean energy. Without consistent policy support, enforcement, and incentives, Bangladesh risks sliding back into higher energy consumption and renewed dependence on costly fossil fuels.