A 10-year roadmap to save Bangladesh's energy sector

Bangladesh is a lower middle-income nation with a fast-growing economy and one of the most densely populated countries globally. Reliable electricity and energy supplies are essential for the country to sustain industrial productivity, attract Foreign Direct Investment (FDI), achieve export targets and ensure long-term economic progress.

Today, the country faces a deep energy crisis. The nation relies on imports for 65% of its energy. It uses old, costly oil and gas power plants. Grid losses top 10% to 15% from aging power lines. It lacks a strong plan to handle sudden fuel import stops. 

Current daily LNG shortfalls frequently range between 1,200 and 1,400 million cubic feet. 

The crisis results from declining domestic gas production, reliance on LNG imports, inadequate LNG import terminals and import capacity is limited by weather-vulnerable single-point Floating Storage and Regasification Unit (FSRU) terminals, slow infrastructure development to move natural gas from Bhola island, missed opportunities to produce liquid petroleum gas (LPG) from existing gas field byproducts, unused domestic coal and slow renewable adoption and narrow fossil fuel import partnerships. 

The shortage of gas supply forces widespread load shedding and significant industrial production losses. The severe gas crisis severely harms the national economy, forcing nearly 50% of gas-based generation offline or returning far below capacity and locking up $25 billion in power infrastructure stranded, resulting in severe daily megawatt deficits and rolling blackouts across urban and rural zones. 

The gas deficit is forcing above $800 million in annual fertiliser imports due to the temporary suspension of several state-owned and private fertiliser plants, cutting production margins and shipping schedules of critical industrial units and large ready-made garment (RMG) factories and nearly $3.5 billion in combined yearly losses from underutilised transmission assets (about $2.5 billion) and $2.5 billion in system leaks. 

Rising power demand from technological transformation, emerging technologies like artificial intelligence, semiconductors and data centres, industrial electrification and transport makes Bangladesh's mid- to long-term energy security critical. 

Bangladesh recently updated its 25-year Energy and Power System Master Plan (EPSMP 2026–2050) to secure mid-to long-term energy sustainability, reduce fuel import dependency and scale up green energy.

The updated EPSMP projects peak electricity demand in Bangladesh to reach 70,030 MW in 2050 under high GDP growth (6.99%) and 59,351 MW under business-as-usual growth (5.90%). 

The EPSMP 2026–2050 did not provide specific annual demand forecasts for 2030 or 2035. Some studies estimate the peak demand by 2030 to be about 22,702 MW under moderate growth and up to 33,000 MW under high growth. By 2035, demand is expected to range from 26,277 MW to 36,400 MW.

The government is implementing a targeted 10-Year Action Plan and Strategy (2026–2035) for addressing immediate, short-term and mid-term energy security to ensure reliable electricity.

The strategy can be structured into sequential phases. 

Phase I: 2026-2029 

The first phase aims to tackle immediate energy scarcity, secure short-term energy supplies, provide reliable electricity for residential, commercial, industrial and institutional users, and maintain steady gas supplies for industries and transport.

Bangladesh can achieve short-term energy security during this period by enforcing demand management, stabilising fuel imports, accelerating local gas drilling, starting the Rooppur Nuclear Power Plant (RNPP) and upgrading the national grid to prevent blackouts and reduce costly emergency fossil-fuel imports.

Demand management should begin with strict energy-saving targets, including limits on daily power use by large factories and shifting energy-intensive operations to night hours. Efficiency audits should also be conducted to identify energy waste in factory machinery and ensure non-essential systems are switched off. 

Fuel supply must also be stabilised. Bangladesh should secure steady imports of LNG, coal and LPG while ensuring that efficient thermal power plants continue operating with regular gas and coal supplies. At the same time, domestic gas and coal exploration should be accelerated to boost local extraction. The transport of compressed or piped gas from Bhola to the main grid should be fast-tracked. Regional power imports should also remain transparent and reliable.

Infrastructure expansion should focus on large-scale LNG import facilities, including deep-sea or land-based terminals using weather-resilient technology. Old gas pipelines should be modernised to reduce leaks, lower system losses and address low pressure. Bangladesh should also build new domestic petroleum refineries.

Power and grid upgrades should include the rapid installation of rooftop solar panels and the expansion of other renewable energy sources. The 2,400MW RNPP should be brought into operation, and Bangladesh should plan to replace old oil plants with Small Modular Reactors (SMRs) and evaluate the feasibility of the third and fourth units of RNPP. The national grid should also be strengthened through capacitor banks, measures to reduce line losses and upgraded distribution lines.

Bangladesh must also develop a proactive energy diplomacy framework to ensure long-term security, price stability and economic growth. Moving from reactive fuel buying to strategic alliances can reduce exposure to sudden market shocks and lower import costs. This should include stronger regional energy ties through secure cross-border pipelines and joint hydrocarbon exploration in the Bay of Bengal.

At the multinational level, Bangladesh should work with other energy-importing nations to negotiate lower prices for coal and LNG. It should also build regional or shared storage hubs to buffer against sudden global market shocks and supply disruptions, while moving away from costly spot-market purchases towards steady, government-backed long-term contracts. A dedicated national energy foresight unit should be established to forecast supply shortages and market shifts months in advance.

Phase II: 2030–2035

Bangladesh's mid-term energy strategy for 2031–2035 aims to deliver 24/7 reliable power for industries and AI infrastructure. It focuses on scaling domestic gas production, renewable capacity, expanding nuclear power, modernising smart grids, and reforming institutional governance.

In this phase, domestic gas fields should be prioritised and local exploration scaled up to increase domestic production, while stable LNG imports should be secured. Gas and RLNG plants should be shifted to mid-merit and peak operations, while the efficiency of Combined Cycle Gas Turbine plants should be maximised.

Bangladesh should add 10,000MW of utility-scale and rooftop solar and wind power while diversifying clean energy sources across regions. Existing coal-fired power plants should continue operating while dependence on imported coal is reduced over time.

Cross-border power imports from neighbouring countries should continue as part of the country's mid-term energy strategy.

At the same time, Bangladesh must modernise and stabilise its transmission and distribution networks by deploying automation and smart grids. Battery energy storage systems (BESS) and other technical measures should be used to stabilise the transmission network and accommodate clean energy.

Strengthening institutional capability and governance will also be essential. Bangladesh should address poor governance and opaque contracting in state energy bodies such as Petrobangla, the Bangladesh Power Development Board, Power Grid Company, the promotional and regulatory bodies for renewable energy, and NPCBL, BAEC and BAERA in nuclear power management, operations and regulation. 

It should also establish specialised technical training and certification programmes for local energy professionals in these organisations and strengthen institutional knowledge for innovative and large-scale energy projects and technologies.

Market reform should accompany these measures. Bangladesh should move away from a single-buyer model and allow a structured, competitive private-sector role in oil and gas imports. Long-term energy security should be treated as a core pillar of national sovereignty rather than a short-term budget expense, while national foreign policy objectives should be tied directly to securing fuel supply agreements and cross-border energy infrastructure investments.

Strategic National Energy Vision: 2036–2050

The foundations of the 2036–2050 long-term outlook should focus on energy security and independence through structural reforms and a green transition. 

These efforts align with the global concept of the Future Age of Electricity. The plan targets 40–50% renewables, 15–20% nuclear, 10–20% gas with carbon capture and storage (CCS), 10–20% coal with CCS, and 5–10% alternative green fuels such as hydrogen.

To support this transition, Bangladesh should create a single, long-term master plan to prevent conflicts between fossil-fuel and green-energy goals. Past planning heavily favoured short-term fossil-fuel expansion over sustainable transitions, and future policy should move away from that bias towards a balanced energy mix.

Regional integration should also form part of the long-term vision, with Bangladesh sharing clean energy and hydropower with neighbouring South Asian countries to strengthen energy security.

Ultimately, Bangladesh's energy planning documents must move beyond sitting on desks as theoretical guides. 

The 10-year energy and power-sector strategic documents should transform static energy plans into legally binding execution mandates. Bangladesh must turn these plans into actionable infrastructure projects with strict timelines, fixed budgets and clear accountability to overcome its short-term power crisis and secure reliable energy through 2035.