Load shedding, or power outages, is a nightmare for the general public in Bangladesh. Although the former government announced in March 2022 that Bangladesh had achieved 100% electrification, the problem of load shedding had not truly been solved. By mid-2022, the issue became more severe. At that time, the energy crisis and dollar shortage were blamed. Although the situation improved temporarily, after the government collapsed in 2024, load shedding returned in full force. According to BPDP (Bangladesh Power Development Board), between early September and September 15, the daily demand for electricity was around 15,000 MW, while the average generation was only around 13,000 MW, resulting in a 2,000 MW deficit. This shortfall in production during a scorching summer made daily life unbearable. Despite Bangladesh’s total electricity production capacity being around 27,000 MW, why does load shedding keep coming back? What is the solution to this recurring problem?
Overview
In 2009, Bangladesh had 27 power plants with a total generation capacity of around 5,000 MW (4,942 MW). Over more than a decade, the number of power plants has increased to 152, with several more under construction. As a result, the current generation capacity stands at 27,000 MW. Even with so many power plants and high production capacity, load shedding remains common in various regions. While load shedding was tolerable before, in mid-2022, it suddenly escalated due to the energy crisis.
A Bloomberg report mentioned that after the Russia-Ukraine war began in February 2022, global fuel prices skyrocketed. Starting mid-February 2022, the price of LNG (liquefied natural gas) in the Asian spot market soared. To avoid putting pressure on the foreign exchange reserves, Bangladesh could not purchase LNG according to demand, leading to load shedding. Although the government at that time managed to control load shedding after a few months, by the end of August 2024, following the government’s collapse, load shedding returned. But why did load shedding return again?
Why Load Shedding Returned
The primary reason for load shedding in Bangladesh is the country’s reliance on imports for power generation and fuel shortages. Most of the country’s power plants are gas-based. According to BBC Bangla, the total production capacity of Bangladesh’s gas-based power plants exceeds 12,000 MW, accounting for more than 44% of the country’s total production capacity. Previously, these power plants generated around 6,500 MW, but now, it’s not producing more than 5,000 MW. One of the main reasons for the reduced production from these gas-powered plants is the lack of gas supply to meet demand. The daily demand for gas for the country’s gas-powered plants is 2,316 million cubic feet, but only 873.8 million cubic feet were supplied. According to Petrobangla, Bangladesh has a capacity to supply 3,829 million cubic feet of gas per day, sourced from both domestic and foreign companies as well as imports. In September, the country produced 794 million cubic feet from domestic gas fields and 1,203 million cubic feet from foreign fields, totaling 1,997 million cubic feet. While the LNG import should have provided 1,100 million cubic feet of gas daily, only 584 million cubic feet were generated due to the closure of Summit’s LNG terminal since May 27. Most of the 2,582 million cubic feet of gas produced went to households and captive power plants for factories, leaving only about 38% of the total demand to be supplied to other gas-powered power plants. This supply shortage resulted in reduced electricity generation from gas-fired power plants.
Without LNG, more than 21% of Bangladesh’s total power generation capacity is supplied by crude oil-based power plants, and more than 1% is supplied by diesel-powered plants. Due to the rise in crude oil prices globally, along with the need to ease pressure on the foreign exchange reserves, electricity generation from diesel-based power plants has been halted, and crude oil-based power plants have limited their production. Bangladesh’s foreign exchange reserves, which stood at a peak of 48 billion USD in August 2021, fell below 20 billion USD. As a result, Bangladesh was forced to limit production from gas and crude oil-based power plants. The “Remittance Shutdown” campaign that began on social media in solidarity with the uprisings in July and August further reduced the flow of remittances, which, coupled with decreased import-export activities, put additional pressure on the country’s foreign exchange reserves. Although remittances returned to normal by mid-August following the government’s collapse, export activities have not fully recovered, and Bangladesh has not been able to ease the existing pressure on its foreign exchange reserves. According to The Daily Star, the total outstanding debt in Bangladesh’s power sector stands at around 420 billion BDT, with the Adani Group owed 800 million USD under a deal with Bangladesh. Russia is also owed 630 million USD, including interest, for the first installment of the Rooppur Nuclear Power Plant. This interim government is under significant pressure to settle these debts, which is why they have been unable to import the fuel necessary to solve the ongoing load shedding crisis.
In addition to gas and crude oil, about 26% or 7,179 MW of the country’s electricity production capacity comes from coal-based power plants. Among these, the Barapukuria Power Plant produces only 250 MW, as it relies solely on domestic coal. Due to mechanical faults, this plant had been offline for some time, with the second unit (125 MW) shut down and the first unit operating at just 60-65 MW. Beyond this, 1,320 MW each is produced from Rampal, Payra, and S. Alam’s Bashkhali Power Plants, totaling around 4,000 MW, along with an additional 1,200 MW from Matarbari, all of which are import-dependent. Meanwhile, the 1,600 MW coal-based electricity from Adani’s Godda Power Plant is also import-dependent. Production at the S. Alam Power Plant in Bashkhali has been halted since June due to fuel shortages. The 1,320 MW ultra-supercritical power plant in Payra also ceased production after failing to pay an outstanding bill of 390 million USD, although 660 MW from one of its units resumed production on June 25. The Matarbari Power Plant also had to shut down on August 10 due to fuel shortages, but it resumed production on September 4. Therefore, as 93% of the country’s electricity production relies on imported fuel, production from most coal-based power plants has been disrupted between July and September due to the foreign exchange reserve crisis and fuel shortages. This is the main reason why load shedding returned in full force by the end of August.
Solution
On September 11, when load shedding reached its peak, the Power and Energy Advisor stated that it might take another three weeks to fully resolve the issue. However, much of the problem had already been brought under control. Yet, for a growing economy like Bangladesh, the recurring problem of load shedding is alarming. To solve this issue, long-term solutions are needed.
The first thing that must be addressed to solve Bangladesh’s load shedding problem is ensuring the country’s energy security. Although relying on energy supplies from the spot market may seem convenient for a small country like Bangladesh, it carries significant risks. The advantages of purchasing energy from the spot market include the flexibility to buy smaller amounts and receive an immediate supply. If the supply remains stable, energy can be purchased at relatively lower prices, which is financially beneficial for a small country like Bangladesh. However, the biggest drawback of buying from the spot market is the price volatility. Prices can change at any moment based on supply and demand, as was seen during the Russia-Ukraine invasion. Global crises can cause energy prices to rise instantly, pushing smaller countries like Bangladesh into even deeper energy crises. Instead of relying on the spot market, Bangladesh should sign long-term agreements with energy-producing countries, ensuring a stable supply of energy and stabilizing fuel prices.
Additionally, investment in low-cost electricity production sectors must be increased as part of the long-term solution, with a gradual shift towards renewable energy. Currently, coal-based power plants in Bangladesh have a total production capacity of 25%. Among these, the Payra, Rampal, and Bashkhali S. Alam power plants each produce 1,320 MW, and Matarbari produces 1,200 MW—this electricity costs around BDT 15 per unit. Moreover, the Rooppur nuclear power plant is expected to generate 2,400 MW from its two 1,200 MW units, providing electricity at around BDT 7 per unit. In other words, if the total demand averages 15,000 MW, approximately 7,560 MW or over 50% of electricity can be ensured from these lower-cost power plants. Electricity generation from gas-powered plants is also cheaper than from coal. While keeping these gas-based power plants operational may be a short-term solution, they are unsustainable in the long term. Bangladesh’s gas reserves are depleting, and it won’t be able to sustain production at demand levels for much longer, resulting in increased reliance on imported gas. But this will keep Bangladesh’s electricity generation dependent on imported coal and gas, posing a significant long-term threat to energy security.
Thus, the focus should be on sustainable, low-cost electricity sources for long-term solutions. Bangladesh’s electricity generation master plan needs to be reevaluated, prioritizing renewable energy sources. Currently, only 2.17% of Bangladesh’s total electricity comes from solar power, 0.83% from hydro, and a mere 0.22% from wind—altogether just 893 MW. Expanding these energy sources should be a priority. This requires increased government investment and attracting private investors. The rental power plants established under the indemnity law during the Awami League era should also be re-evaluated to see which ones can produce electricity at full capacity. Those that can should be kept, while the rest should be gradually shut down. This will reduce the excess capacity that exceeds 92% of the demand, saving the government a significant amount of money in capacity charges each year. These savings can then be used to establish new renewable energy-based power plants, which will play a crucial role in ultimately solving Bangladesh’s electricity problem. Additionally, it will help align Bangladesh with global initiatives aimed at increasing clean energy generation.
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