Bangladesh Energy - Overview
Demand for electricity in
Bangladesh is projected to reach 40,000 megawatts (MW) by 2030. The
Government of Bangladesh has plans to increase power generation beyond expected
demand to help propel growth in the export-oriented economy and meet the needs
of a growing middle class by raising $70 billion in total investments in the
sector over the next 15 years. Electricity generation capacity
has increased significantly over the last decade, despite
poor transmission and distribution infrastructure, inadequate thermal
efficiency in a large number of aged power plants, and a mismatch between the
types of energy needed by existing plants and the fuel mix available.
Private power production units make up about half of total installed capacity.
Electrical generation capacity
has increased from about 5 gigawatts in 2009 to around 21 gigawatts in 2019,
and access to energy has expanded to nearly 95 percent of the population.
Still, the reliability and quality of electricity remain major issues.
Improving the supply and reliability of electricity and energy in general,
while maintaining affordability, is essential to supporting the continued
growth of industry and commerce in Bangladesh.
The fuel mix of Bangladesh's
power plants is heavily based on natural gas. The Government of
Bangladesh plans to reduce dependence on domestic natural gas and increase
the use of imported liquified natural gas (LNG). As of July 2020 the
Ministry of Power, Energy, and Mineral Resources Plans was reportedly
reconsidering plans to shift Bangladesh's fuel mix towards coal – including by
generating as much as 50 percent of total electricity using coal-based power
plants by 2030. The government is also considering importing electricity
from neighboring countries and expanding the use of renewable resources,
including solar and wind power.
U.S. companies play an outsized
role in the power and energy industry in Bangladesh. U.S. companies
supply over 55 percent of Bangladesh's domestic natural
gas production and are among the largest investors in power
projects. U.S.-origin power turbines currently provide 80 percent of
Bangladesh's installed gas-fired power generation capacity.
There are also opportunities
for offshore gas exploration. Currently, 26 offshore blocks exist in
the Bay of Bengal, including 11 shallow blocks and 15 deep sea blocks.
Petrobangla, the state-owned oil, gas exploration, and production company,
agreed in March 2020 to award U.S.-Norway joint venture TGS-NOPEC and
Schlumberger a contract to conduct a 2D non-exclusive, multi-client seismic
survey in the 26 blocks over two years. According to press reports, the
Government of Bangladesh (GoB) had planned to invite international
bidding on 21 offshore gas blocks in March 2020, but the announcement was postponed
due to the outbreak of COVID-19. The GoB also amended the terms of the
Model Production Sharing Contract (PSC) in 2019 to attract greater
international bidding interest, including reintroducing a provision to allow
offshore drilling companies to export any gas Petrobangla refuses to buy.
In March 2017, without a public
tender, the government and state-run Petrobangla signed a production sharing
contract with POSCO Daewoo Corporation of South Korea for oil and gas
exploration in deep sea block 12. The Bangladesh government processed
Daewoo's proposal under the "Prompt Power and Energy Supply (Special)
Act-2010," under which there was no open competitive bidding
process. This was the first time a PSC was signed under the special act.