Reasons Behind Bangladesh’s Current Energy Crisis Which Led to Heavy Load Shedding

In March 2022, the entire country had access to 100% electricity, but load shedding suddenly began in July. However, due to the country’s production-oriented activities being closed during the Eid-ul-Azhar holiday, the amount of load-shedding has decreased slightly. But, as the load-shedding started increasing again after the holidays, the electricity department started area-wise pre-scheduled one-hour load-shedding from July 19. However, various media reports have come up with load shedding for longer than the scheduled time. According to organizations associated with electricity distribution, the electricity supply is only 40 to 50 percent of the demand, especially in rural areas. BPDB’s daily power generation shows that in July, the daily average generation was 12,000 MW, against a demand of around 14,000 MW per day. Mainly due to the lack of electricity supply and mismatch between demand and production, the authorities have taken the initiative of area-wise load-shedding so that production-oriented activities are not interrupted. Apart from this, the government has ordered the closing of shops and shopping malls after 8 pm, a 25 percent reduction in government electricity consumption in government offices, and any meeting should be online. But why the sudden onset of this crisis with electricity in Bangladesh?

The daily average production was 12,000 MW, against a demand of around 14,000 MW


In 2009, the total number of power plants in Bangladesh was 27, with a power generation capacity of about 5 thousand MW (4942). In more than a decade, the number of power plants in the country has increased to 153, and several power plants are under construction. As a result, the current power generation capacity stands at 25700 MW. At present, the country’s average electricity demand is 14,000 to 15,000 megawatts. Bangladesh has more than 70 percent power generation capacity compared to the total demand. The most significant role in the growth of the country’s power generation capacity has been the opportunity to build private power plants on a quick rental basis. But due to less demand than capacity, the government must pay thousands of crores of rupees in capacity payments yearly. Many people believe that the subsidy given by the government to increase this capacity is responsible for the current electricity situation. However, when the government was planning to improve Bangladesh’s electricity capacity, demand did not increase at the rate forecast to increase yearly. One of the reasons behind this is that with technological advancement, the electrical appliances used in our homes, such as lights, fans, TVs, fridges, and ACs, are much more energy efficient than before. With time, LED light, Inverter Fridge, and AC technology have become available.

Payra thermal power plant, the largest coal-based power plant in Bangladesh

Apart from this, even after allowing quick rental power plants to increase capacity, the construction of nearly 6,000 km of new transmission lines over the past decade to bring the entire country under the national grid is not enough. Because of this, the government has increased power generation capacity, but the demand has not increased at that pace. However, the government has increased its focus on various economic zones and industrial development across the country. Apart from this, there are also plans to increase the number of electric cars and buses on the roads. Given this, very soon, the demand for electricity in Bangladesh will start rising, and the government is working to build several high-capacity power plants on a government basis instead of a quick rental.

According to a Prothom Alo, the lack of gas is the main reason behind Bangladesh’s current power generation disruption. Due to disorder in power generation, the authorities have to schedule area-wise load shedding to reduce the power shortage so that the country’s production-oriented factories do not shut down. According to a Petro Bangla, Bangladesh has a total gas production capacity of 3760 million cubic feet per day from 113 gas fields combined with government and foreign companies and imports. However, on July 21, all sources produced 2774 million cubic feet. Domestic firms make 286 million cubic feet less than the production capacity (1145 MMCFD).On the other hand, foreign companies are producing less than 129 million cubic feet against the 1615 million cubic feet production capacity. Meanwhile, the supply was less than half (428 MMCFD) even though imported liquefied natural gas or LNG was supposed to meet the demand of 1000 million cubic feet daily. As a result, although there is a daily demand of 2252 million cubic feet of gas for power generation in Bangladesh, only 1035 million cubic feet of gas have been supplied to the power plants simultaneously.

The main reason behind the decrease in gas supply as per the demand is the increase in the price of LNG in the Asian spot market. According to Bloomberg, when the Russia-Ukraine war started in February 2022, the price of energy began to rise worldwide. As a result, the cost of LNG per MMBTU rose from $22 per MMBTU in mid-February to $85 in early March. In May, the price dropped again to $20 per MMBTU, but by mid-June, it had risen again, and by the end of July, it had surpassed $50 per MMBTU.

According to Bloomberg, when the Russia-Ukraine war started in February 2022, the price of energy began to rise worldwide

Bangladesh had been importing from Qatargas and Oman Trading International on a contractual basis for a long time at $11.5 per MMBTU. From September 2020, Bangladesh also started importing LNG from the spot market. Basically, Bangladesh could not import LNG according to the country’s daily demand due to this price variation. If Bangladesh imports LNG at higher prices, it will pressure the country’s foreign reserves. Because of this, Bangladesh has stopped buying gas from the spot market since June. Due to the impact of global inflation due to the Ukraine-Russia war, Bangladesh’s foreign reserves have already fallen below 40 billion dollars (39.48 billion, July-22), which was more than 46 billion dollars (46.15 billion) in December 2021. As the country is unable to import LNG as required, several gas-based power plants in the country are currently closed. Along with LNG, due to the rise in crude oil prices in the global market, the relevant authorities have currently shut down all diesel-powered power plants in the country.

Bangladesh’s foreign reserves have fallen below 40 billion dollars.

However, with the amount of gas produced in the country every day, it is possible to meet the demand of all the gas-based power plants in the country. But, besides electricity generation in Bangladesh, natural gas is also used for various industrial purposes, including households. To meet the demand of the power plants, the supply of gas to the productive works will be stopped, which will adversely affect the country’s economy. Apart from gas and oil, another important source of electricity in Bangladesh is coal-based power plants. Although a total of 525 MW of electricity can be generated from 3 units of the coal-based thermal power plant at Barapukuria, only 200 MW of electricity is being generated from the plant due to coal shortage. According to Daily Ittefaq, Coal production from the mine has been stopped since the beginning of May due to the exhaustion of coal in well number 1310 of Barapukuria. It takes about 3 and a half months to move the machinery from this well to the 1306 no well for production and to prepare it for mining. The power plant is now generating electricity from the stored coal. It takes 2000 metric tons of coal per day to generate 200 MW of electricity from the power plant. On the other hand, at present Barapukuria has only 80 to 90 thousand metric tons of coal stored which can generate electricity for 40 days. However, in the case of full power generation, it can generate only 15 to 18 days of power from this stored coal.


The main cause behind the ongoing electricity problem is the energy crisis. It is imperative to make a long term plan for the country’s energy security to ensure sufficient energy supply in the country along with power generation in the future. Initially, Bangladesh thought of buying fuel oil from Russia, but keeping in mind the US and western world’s sanctions and Bangladesh’s oil refineries are not suitable for Russian fuel refining, it also gave up that thought. In such a case, Bangladesh may seek help from India where India can import refined oil from Russia. But by doing so, Bangladesh may face sanctions from western world which might have a negative impact on Bangladesh’s RMG sector. In such circumstances, the safest option for Bangladesh is to sign a long-term contract to import more energy with oil and gas producing friends in the Middle East. By doing this Bangladesh will be able to import energy at a lower price than the spot market, and in the future, even if there is a crisis in global market energy prices, Bangladesh will be safe from it. Besides, initiatives should be taken to increase the storage capacity of imported fuel. 

Bangladesh may seek help from India where India can import refined oil from Russia.

Several thermal power plants are still under construction in Bangladesh. Among them, the commercial production of the first unit of the Rampal power plant is expected to start in October 2022, and the second unit will start production from February 2023. On the other hand, the largest coal-based power plant in the country, Payra thermal power plant with a production capacity of 1320 megawatts in Kalapara upazila of Patuakhali, has not yet been able to go into full production due to the lack of a direct transmission line with Dhaka. However, the power plant is supplying 900-1000 MW daily using alternative means. So, the government can insist on completing the work of these thermal power plants within the stipulated time. Also some of the country’s power plants are under renovation so electricity cannot be generated from them. The government can also work to complete the renovation of these power plants as fast as possible. Apart from this, 748 MW power supply may start in December 2022 from India’s Adani power plant. This will help reduce the pressure on the country’s oil and gas reserves.

It is necessary that Bangladesh’s long-term plan be revised in order to prevent a crisis of this kind in the near future. In 2016, the Government of Bangladesh prepared a master plan known as Power System Master Plan 2016 with the assistance of JICA. This masterplan is basically a part of Bangladesh Government’s Vision 2041. By 2041, Bangladesh’s electricity production is set to increase to 60 thousand megawatts. The master plan calls for 35-percent gas and 35-percent coal-based electricity generation in Bangladesh. But by doing this, Bangladesh’s energy security will face a bigger threat in the future. Meanwhile, worldwide by 2050, renewable energy is being emphasized to reduce the dependence on natural energy to reduce the effect of greenhouse gas.

Power System Master Plan 2016

Bangladesh should also revise its 2016 Power System Master Plan to increase reliance on renewables, particularly solar and wind power plants. By doing this, Bangladesh will be able to reduce its dependence on oil or gas of any other country for the future electricity production. Besides, Bangladesh has embarked on the path of power generation with nuclear energy through the Rooppur nuclear power plant. Nuclear energy is more efficient and cost effective than any fossil fuel based and renewable energy source. Therefore, several more nuclear based power plants in the future master plan can be a very possible solution for Bangladesh.

Bangladesh should not only increase the power generation capacity, but should also produce power according to the capacity. Currently, Bangladesh has more than 25 thousand MW of generating capacity, but due to lack of demand, the country doesn’t generate to its fullest. But, due to this excess capacity, the Bangladesh government has to pay tens of thousands of crores of subsidies every year, which is an expenditure but has no revenue source against it. Therefore, the government should look forward to the export of electricity. This will earn a huge amount of foreign exchange as well as save what the government’s current expenditure due to subsidies. Besides, due to the increase in foreign currency inflow, importing the fuel required for power generation will no longer be a struggling issue for Bangladesh.

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