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Bangladesh is stepping up efforts to transform its energy sector through stricter industrial energy audits, expanded renewable energy use and wide-ranging reforms aimed at improving efficiency and reducing costs.
As outlined in the national budget, the government plans to strengthen energy audits across major industries to curb waste and encourage more efficient electricity use.
The move is part of a broader strategy to reduce reliance on imported fuels and build a financially sustainable power sector amid rising global energy prices.
With more than 40 percent of electricity generation dependent on gas, Bangladesh remains vulnerable to fluctuations in international fuel markets, especially as domestic gas reserves decline and reliance on imported liquefied natural gas (LNG) increases.
To address these challenges, the government is prioritising renewable energy expansion and better utilisation of local resources.
Investors will receive incentives to manufacture renewable energy equipment domestically, including solar panels, wind turbine components and battery storage systems.
Bangladesh aims to generate 20 percent of its electricity from renewable sources by 2030, with the share projected to rise to between 30 and 50 percent by 2050.
Key initiatives include expanding rooftop solar programmes, assessing wind potential in coastal areas, developing large-scale solar projects and piloting waste-to-energy plants.
Plans are also underway to introduce a National Energy Storage Roadmap and enhance grid flexibility to support increased renewable integration.
The government targets boosting electricity generation capacity to 35,000MW by 2030, alongside expanding the transmission network to 25,000 circuit kilometres.
Construction of the 2,400MW Rooppur Nuclear Power Plant is progressing quickly.
One reactor has already been loaded with fuel rods, and around 300MW is expected to be added to the grid by August 2026. The first unit is scheduled to generate 1,200MW by January 2027.
The budget document highlights longstanding structural weaknesses in the power sector, including unplanned policies, mismanagement and inefficiencies that have driven up generation costs.
Heavy dependence on fossil fuels and controversial contractual arrangements in past projects have further strained public finances.
As a result, government subsidies for electricity are expected to exceed Tk 40,000 crore in the current fiscal year due to the widening gap between production costs and retail tariffs.
Although installed capacity has reached 28,919MW, ensuring reliable and high-quality power supply remains a challenge.
To tackle these issues, the government has prioritised reforms across generation, transmission and distribution.
Measures include phasing out inefficient plants, adopting a least-cost generation strategy and reviewing capacity charges and power purchase agreements to improve financial discipline.
Efforts are also underway to modernise the grid through smart technologies, reduce system losses and expand access to electricity in remote and island areas.
Future power projects will be developed through competitive bidding to keep tariffs affordable, while underground distribution systems are planned for metropolitan areas.
A draft Power Sector Strategy Paper (2026–2050) has also been prepared, proposing a balanced energy mix and integration of advanced technologies such as SCADA, GIS and advanced metering systems.
With energy audits, renewable expansion and governance reforms at its core, Bangladesh’s long-term plan aims to create a more resilient, efficient and sustainable power sector capable of meeting the country’s growing demand.