Introduction

Electricity is the most potential for foundation of economic growth of a country and constitutes
one of the vital infrastructural inputs in socio-economic development .The world faces a surge
in demand for electricity that is driven by such powerful forces as population growth, extensive
urbanization, industrialization and the rise in the standard of living.

Bangladesh, with its 160 million people in a land mass of 147,570sq km. In 1971, just 3% of
Bangladesh’s population had access to electricity .Today that number has increased to around
50% of the population –still one of the lowest in the world-but access often amounts to just a
few hours each day. Bangladesh claims the lowest per-capita consumption of commercial
energy in South Asia, but there is a significant gap between supply and demand. Bangladesh’s
power system depends on fossil fuels supplied by both private sector and state-owned power
system. After system losses, the countries per installed capacity for electricity generation can
generate 3,900-4300 Megawatts of electricity per day; however, daily demand is near 6,000
Megawatts per day. In general, rapid industrialization and urbanization has propelled the
increase in demand for energy by 10% per year. What further exacerbates Bangladesh’s energy
problems is the fact the country’s power generation plants are dated and may need to be
shut down sooner rather than later.

There was no institutional framework for renewable energy before 2008; therefore the
renewable energy policy was adopted by the government. According to the policy an
institution, Sustainable & Renewable Energy Development Authority (SREDA), was to be
established as a focal point for the promotion and development of sustainable energy,
comparison of renewable energy, energy efficiency and energy conservation. Establishment of
SREDA is still under process. Power division is to facilitate the development of renewable
energy until SREDA is formed.

While the power sector in Bangladesh has witnessed many success stories in the last couple of
years, the road that lies ahead is dotted with innumerable challenges that result from the gaps
that exist between what’s planned versus what the power sector has been able to deliver.
There is no doubt that the demand for electricity is increasing rapidly with the improvement of
living standard, increase of agricultural production, progress of industries as well as overall
development of the country.

Power Generation Scenery in Bangladesh

Severe power crisis compelled the Government to enter into contractual agreements for high-
cost temporary solution, such as rental power and small IPPs, on an emergency basis, much of it
diesel or liquid-fuel based. This has imposed tremendous fiscal pressure. With a power sector
which is almost dependent on natural-gas fired generation (89.22%), the country is confronting
a simultaneous shortage of natural gas and electricity. Nearly 400-800 MW of power could not
be availed from the power plants due to shortage of gas supply. Other fuels for generating low-
cost, base-load energy, such as coal, or renewable source like hydropower, are not readily
available and Government has no option but to go for fuel diversity option for power
generation.

When the present Government assumed the charge, the power generation was 3200 – 3400
MW against national demand of 5200 MW. In the election manifesto, government had declared
specific power generation commitment of 5000 MW by 2011 and 7000 MW by 2013.

Over View of Electricity Last Couple of Year

To achieve this commitment, in spite of the major deterrents energy crisis and gas supply
shortage, government has taken several initiatives to generate 6000 MW by 2011, 10,000 MW
by 2013 and 15,000 MW by 2016, which are far beyond the commitment in the election
manifesto. 2944 MW of power (as of Jan, 2012) has already been added to the grid within three
years time. The government has already developed Power system Master Plan 2010. According
to the Master Plan the forecasted demand would be 19,000 MW in 2021 and 34,000 MW in
2030. To meet this demand the generation capacity should be 39,000 MW in 2030. The plan
suggested going for fuel-mixed option, which should be domestic coal 30%, imported coal 20 %,
natural gas (including LNG) 25%, liquid fuel 5%, nuclear, renewable energy and power import
20%. In line with the Power system Master Plan 2010, an interim generation plan up to 2016
has been prepared, which is as follows: