Ashraful Islam Rana
Bangladesh’s energy sector stands at a critical juncture where every decision taken to solve one problem seems to create another. In short, the country’s power and energy system is buried under a mountain of challenges. In this reality, managing the energy sector will be the biggest political and economic test for the new government. In today’s world, energy lies at the heart of the economy, industry, agriculture, and employment.
Over the past decade, power generation capacity has increased, but energy security has become increasingly fragile. Excessive emphasis on boosting secondary energy—electricity generation—without ensuring affordable primary energy has created a deep imbalance between installed capacity and fuel supply. As a result, there is a paradoxical situation: surplus electricity on paper, but load shedding in reality. This duality has created uncertainty in the lives of ordinary people.Despite debates over right and wrong policies, during the tenure of the past political government people experienced uninterrupted electricity for a period. With the irrigation season and summer approaching, if the new government—particularly the Bangladesh Nationalist Party (BNP)—fails to ensure stable electricity supply, political pressure will quickly intensify. The old “poles and pillars” controversy may resurface.
However, following the same path as before could deepen the long-term crisis. Therefore, the government must strike a balance between short-term relief and long-term national interest. The BNP, in its election pledges, emphasized expanding domestic energy exploration and massively scaling up renewable energy. The public will now expect to see those promises implemented. The party must harness all renewable energy opportunities while aggressively advancing domestic oil and gas exploration.
A Decade of Policy Mistakes
The gas crisis is no longer confined to households. Power plants, fertilizer factories, and industries are all suffering. At the same time, expensive LNG and coal are being imported. Despite massive investments in large power plants, many cannot operate at full capacity—or remain idle—due to fuel shortages.
This crisis did not emerge overnight. Long neglect of domestic gas exploration, policy-level sidelining of renewables, political pressure for rapid electricity expansion, and growing dependence on imported fuel have trapped the sector in a costly web. Ordinary citizens and industries are paying the price.
According to data from Petrobangla, daily gas supply currently ranges between 2,200 and 2,500 million cubic feet, while demand is nearly double. Production decline at the country’s largest gas field, Bibiyana Gas Field, signals future risks. Previously, the US company Chevron supplied around 1,200 million cubic feet of gas per day, but output has now fallen significantly. Over-extraction and lack of new exploration have worsened the situation.
The consequences are clear: industries and power plants built on domestic gas are heading toward serious risk. Imported fuel may provide temporary relief but increases pressure on foreign currency reserves and raises production costs. The burden of capacity payments has severely weakened state institutions. The Bangladesh Power Development Board (BPDB) and Petrobangla are now financially strained, even approaching insolvency.
To manage the situation, prices have been increased and debts—both domestic and foreign—have been taken on to settle liabilities in the power sector. But these are temporary fixes. If the cycle of new loans to pay old debts continues, the energy sector will impose an even heavier burden on the economy.
Once considered a problem of the poor, the energy crisis now affects industrialists who chant daily for gas and electricity. Export-oriented industries cannot survive without reliable energy. Reports indicate that many factories have already shut down due to gas shortages. If industries close, employment will fall, foreign earnings will decline, and the economy will stagnate. Energy is now a problem for everyone—rich and poor alike. The greatest challenge for the new government is to avoid populist decisions and instead pursue sustainable ones.
The Test of Promises and Implementation
Returning to the country, Tarique Rahman declared, “I have a plan.” The public now wants to see that plan in action. The BNP’s 31-point reform agenda and election manifesto gave priority to electricity and energy. Its declared commitments—boosting domestic exploration and expanding renewables—must now translate into concrete steps. Most importantly, decisions should not be driven by short-term popularity at the cost of long-term stability.
What the Government Must Do
First, the fossil fuel–dependent Integrated Energy and Power Master Plan (IEPMP) adopted during the Awami League era should be scrapped. The import-dependent draft Energy and Power Sector Master Plan (EPSMP) taken by the interim government must be reformed, prioritizing national interests, and replaced with a new comprehensive national energy policy. Climate change, economic realities, energy security, and renewables must be integrated into a long-term vision.
Second, corruption and opacity in the energy sector must end. Transparency in project selection and contracts will reduce unnecessary costs and restore public trust.
Third, large-scale oil and gas exploration must begin across onshore, offshore, and hilly regions. Alongside strengthening national capacity in Petrobangla and BAPEX, these institutions must be freed from bureaucratic control and led by petroleum engineers, geologists, and energy experts—transforming them into world-class resource institutions.
Fourth, substantial budget allocations must support domestic exploration.
Fifth, subsidies for imported fossil fuels should gradually shift toward renewables. Businesses have a crucial role here. Rooftop solar, captive generation, and energy-efficient technologies should be adopted widely. The government must encourage this transition through tax incentives, easy loans, and policy support.
Sixth, approval of new coal- or oil-based power plants must stop, and inefficient plants should gradually be converted to renewable facilities. Without reducing irrational costs such as capacity payments, the sector cannot become financially sustainable.
Seventh, the LNG import–dependent trade agreement between Bangladesh and the United States must be revised.
Eighth, the LNG-based Moheshkhali-Matarbari Integrated Infrastructure Development Initiative (MIDI) should be revised or scrapped.
Ninth, instead of building new LNG terminals, focus should shift to preventing gas wastage. Gradually encouraging industries to switch from gas to electricity and using technology-based monitoring to stop leaks and illegal connections are essential.
Tenth, clear national targets for renewable energy must be set—at least 30 percent by 2030 and 40 percent by 2041—with budget priorities reflecting these goals.
Eleventh, electric vehicles must be promoted to reduce fuel imports and urban pollution.
Twelfth, the national grid must be modernized into a smart grid. Decentralized solar—particularly in rural and agricultural systems—can play a transformative role.
Ultimately, Bangladesh’s energy future must prioritize domestic resources and renewables such as solar and wind. Experts believe the country has vast potential. The interim government has already initiated rooftop solar projects; the new government should accelerate them.
Industrial hubs such as Savar, Gazipur, Narayanganj, Dhaka, Chattogram, Munshiganj, and Narsingdi offer enormous rooftop solar potential. The government must adopt simplified policies, and industrial owners must step forward.
Bangladesh’s energy sector stands at a historic crossroads. The cost of wrong decisions could be devastating. Yet with sound policymaking, transparency, and long-term vision, this crisis could open the door to new opportunities. The question before the new government is simple: will it pursue short-term political comfort, or will it build a safe, sustainable, and self-reliant energy framework for future generations? The answer will determine the future trajectory of Bangladesh’s economy.