Bangladesh needs an investment of US$35.2 to US$42.6 billion to achieve its 30 percent renewable energy target by 2040. However, the Center for Policy Dialogue (CPD) has warned that achieving this target could be at risk due to policy inconsistencies, lack of a specific plan to phase out fossil fuels, and investment uncertainty.
This information was revealed in a research report titled ‘Re-evaluating Renewable Energy-Based Power Generation Targets by 2040: Smart Targets and Forecasts of Required Investments’ at a press conference held at the BRAC Center in the capital on Sunday (August 24) afternoon. The report was presented by CPD Program Associate Mehedi Hasan Shamim.
The report said that the targets for renewable energy in various national policy plans vary. While the Mujib Climate Prosperity Plan has set a target of 30 percent renewable energy by 2030, the Renewable Energy Policy 2025 has set this target by 2040. The Integrated Power and Energy Master Plan (IEPMP) has set a target of 40 percent clean energy by 2040. However, the CPD criticized the IEPMP for presenting unproven technologies such as nuclear power and carbon capture as ‘clean energy’.
The report also said that currently, the share of renewable energy in the national grid is only 3.6 percent. In contrast, gas-based fossil fuels account for 43.4 percent, and coal-based power generation capacity is also increasing. As a result, while fossil fuel surplus capacity is being created, the deficit in the renewable sector is increasing.
The research report states that to meet the government’s target, it is necessary to install 18,162 MW of renewable power plants by 2030. However, the current plan includes only 1,967 MW, which will create a deficit of more than 16,000 MW over a five-year period.
The CPD analysis says that the largest investment in renewable energy will be needed between 2025 and 2035—about $24.7 billion. Of this, $16.5 billion is needed in solar energy, $12.6 billion in wind energy, $6 billion in hydropower, and $7.4 billion in imports and other sectors.
Meanwhile, solar power has been mentioned as the main source in the renewable energy mix and it has been said that it will have to be increased from the current 700 MW to 17,229 MW by 2040. On the other hand, wind power will have to be increased from 62 MW to 13,625 MW, which is very challenging.
The report notes that the lack of a specific timeframe for the retirement of fossil-based power plants has created a major obstacle to the energy transition, which risks maintaining costly excess capacity alongside renewables.
The CPD recommends that all national policies should adopt a 30 percent renewable energy target by 2040. Clear milestones should be set for 2030 and 2035 and plans should be made to retire fossil power plants. The CPD also recommends encouraging electricity imports and cross-border investment from neighboring countries, ensuring low-interest financing by engaging with development banks and climate funds, and expanding grid infrastructure development, energy storage technologies, and decentralized energy systems (rooftop solar, mini-grids).
Imran Karim, former president of the Bangladesh Independent Power Producers Association, said that currently the share of renewable energy is only 2 percent. To increase it to 20 percent by 2030, an investment of $12 to 14 billion would be required. He stressed the importance of restoring investor confidence and said that even if the government issues LOIs, tenders must be settled quickly.
CPD Research Director Khandaker Golam Moazzem said, “If Bangladesh continues to have policy ambiguity and reliance on fossil fuels, the risk of financial crisis and failure to meet climate goals will increase. On the other hand, a successful transition to renewable energy is possible if a unified strategy is adopted.”
Additional Secretary of the Ministry of Environment Mohammad Navid Salimullah, Chairman of Power Grid Bangladesh Rezwan Khan, Director of the Department of Environment Mirza Shawkat Ali and Fahmida Khanam also spoke at the event.
