Bangladesh has experienced rapidly rising energy consumption over the past two decades. This trend will intensify further in the coming years as economic growth and development efforts accelerate - Bangladesh strives to become a middle-income country by the year 2021. Being a developing country, the electric energy demand in Bangladesh has been increasing at a significantly high rate. This demand is fuelled by the sustained growth in GDP in recent years. Bangladesh Government has undertaken various projects to meet this rapidly growing demand. New policies have been drafted to cope with the challenges in the energy sector. These policies will play a major role in ensuring energy security and in turn sustainable development of the country.
Bangladesh’s power sector is one of the fastest growing in South Asia. The growth in terms of capacity addition has been remarkable - increasing from 5% to 28% from 2012 to 2018 according to the World Bank and the Bangladesh Power Development Board. Electricity is the major source of power for most of the country's economic activities. Noncommercial energy sources, such as wood fuel, animal waste, and crop residues, are estimated to account for over half of the country's energy consumption. Bangladesh has small reserves of oil and coal, but very large natural gas resources. Commercial energy consumption is mostly natural gas (around 66%), followed by oil, hydropower and coal.
Planned and appropriate use of electricity is fundamental to the economic progress of Bangladesh. There is a huge demand for electricity for all sectors of the economy including agriculture, industry and service sectors. Other than household use of electricity in rural areas, the scale of demand for electricity in agricultural, SMEs and income generating activities is going up.
According to Bangladesh Government future planning, in order to secure energy sources in 2021 especially oil, gas and coal, alternate energy sources such as wind, hydro and solar energy has been brought into consideration. In the year 2021, total electricity demand in Bangladesh will be approximately 20,000 megawatt. In order to achieve such target, relevant sectors must be evaluated and stimulated through implementation of short, medium and long term planning. Government’s master plan is to generate 24,000MW of electricity by 2021, 40,000 MW by 2030, and 60,000 MW by 2041.
Apart from electricity generation, gas is also instrumental in the production of fertilizers. Demand for fertilizers in the country is on the rise due to efforts being made to achieve self-sufficiency in the food sector. Apart from that, every year 3.8 million tons of petrol and petrol-based products are imported by Bangladesh but the demand for such products increase every year. Diesel is one of the primary fuels for operating shallow wells used for irrigation. 20% of the imported fuel is used in the irrigation sector.