Electricity

In 2004, Bangladesh had 4.7 gigawatts (GW) of installed generation capacity, up from 3.6 GW in 2002. 95 percent of this capacity was conventional thermal power (primarily natural gas) and the remaining 5 percent hydroelectric power. Electricity generation per capita is one of the lowest in the world, at about 155 kilowatt-hours (kwh) in 2005. According to the World Bank, only 32 percent of the population has access to electricity, primarily in the more developed eastern zone of the country. Since much of the country is disconnected from the national electricity grid, noncommercial sources of energy such as biomass are estimated to represent more than half of Bangladesh’s energy consumption.
Sector Organization

Bangladesh’s Ministry of Power, Energy, and Mineral Resources (MPEMR) controls the power sector in Bangladesh. This is done primarily through the Power Division and Power Cell, which were created in 1998 with a mandate of managing, regulating, and leading reforms in the power sector. Generation and distribution activities have been opened to foreign and private sector involvement, although both sectors remain dominated by state-owned entities. According to Power Cell, in 2004 the Bangladesh Power Development Board (BPDB) generated 3,630 megawatts (MW) of the country’s 4,920 MW of total commercial electricity, or about 74 percent of the total installed capacity. All grid-connected electricity transmission is carried out by state-owned Power Grid Company of Bangladesh (PGCB).

Given the poor state-run electricity infrastructure, in 1996 the government issued the "Private Sector Power Generation Policy of Bangladesh" and began to solicit proposals from independent power producers (IPPs) in hopes of easing the country’s electricity supply shortage. Several IPPs broke ground on new power stations after 1996, and more recently Bangladesh has attracted large investment proposals. In May 2005, U.S.-based Vulcan Energy signed a memorandum of understanding (MOU) with the government of Bangladesh for the construction of $1.6 billion in gas, coal, and fertilizer projects that would bring an additional 1,800 MW in generating capacity online. The Tata group of companies in India is also mulling $3 billion in energy sector projects in Bangladesh, including a 500-MW coal-fired power station and a 1000-MW gas-fired generator. However, in July 2006 company representatives announced that Tata would not proceed with the investment plans.

In addition to large IPP projects, in April 1998, Bangladesh adopted a "Small Power Generation Policy," which encourages development of small local generation projects of up to 10-MW in capacity in underserved areas. The country has an active rural electrification program, which is supported by the $280 million loan package from the ADB’s Power Sector Development Program (PSDP) initiated in 2003. Aside from improving electricity infrastructure in rural areas, the PSDP aims to build long-term institutional capacity, improve efficiency, and promote private sector participation in Bangaldesh’s power sector.

Conventional Thermal

Bangladesh generated 16.9 billion kilowatt-hours of electricity from conventional thermal sources in 2004, representing 94 percent of its total generation for the year. The government of Bangladesh estimates that about 80 percent of its commercial electricity consumption comes from roughly 30 natural gas-fired plants. In January 2006, Bangladesh’s first coal-fired power plant began commercial production at the 250-MW Barapukuria facility in Parbotipur. In July 2005, AEC proposed the development of a coal mine and 500-MW power station in Bangladesh’s Phulbari region and awaits government approval. Vulcan Energy’s possible investment plans would bring two 450-MW coal-fired plants to Bangladesh, and the Tata group suspended plans for a proposed a 1000-MW coal-fired facility in July 2006.

Other Sources

Bangladesh generated 1.1 billion kilowatt-hours of electricity from hydroelectric sources in 2004, or roughly 6 percent of its total. News reports suggest that the government is looking to develop additional hydroelectric plants, possibly in neighboring Bhutan.

Biomass (primarily wood, crop residues, and animal waste) is a significant noncommercial energy source in Bangladesh, estimated to account for over half of the country’s energy consumption. Biomass is especially prevalent in rural areas for household energy purposes such as cooking.