What Are The Barriers To Renewable Energy In Bangladesh?

Bangladesh has one of the lowest per capita energy consumption rates in the world, with most of its population lacking access to electricity. Approximately 60% of the total population has access to electricity, with a per capita consumption of 464 kWh per year. The country’s installed power generation capacity is 22,000 MW, with maximum generation around 14,000 MW resulting in frequent load shedding. Natural gas accounts for the majority (58%) of installed capacity, while liquid fuels account for 27%, coal 8%, hydropower 4%, and renewable energy sources like solar, wind and biogas around 3%.

The government aims to provide affordable and reliable electricity access for all by 2021 and to ensure 10% of the total generation capacity comes from renewable sources by 2020. Renewable energy development has been slow but is starting to gain momentum through government policies to promote solar, wind, biofuels and waste-to-energy. Key barriers remain around high costs, infrastructure constraints, regulations, financing and technical expertise. Overcoming these could allow Bangladesh to tap into its significant renewable energy potential.

High Upfront Costs

One of the biggest barriers to adopting renewable energy in Bangladesh is the high upfront costs required for renewable energy projects. The initial investment for purchasing equipment and infrastructure for solar, wind, or other renewable technologies can be prohibitively expensive compared to fossil fuel power plants. According to Rahman (2022) on LinkedIn, “The cost of setting up a solar power project can be a significant barrier to entry for investors and project developers in Bangladesh.” The high capital costs pose a major obstacle, especially when financing options are limited.

Part of the reason renewable energy has high upfront costs is that the technology is still maturing. As Rahman (2023) reported, emerging economies like Bangladesh often lack the technical expertise and infrastructure needed to develop renewable energy affordably. Over time, as expertise and supply chains grow, the upfront cost barrier should decline. But for now, the initial investment requirement remains a key impediment to going green.

Lack of Infrastructure

Bangladesh has a limited grid capacity and infrastructure to support the integration of renewable energy sources like solar and wind power (Badcock, 2022). The country’s electricity grid system was not originally designed to handle the intermittent nature of renewables, which can lead to issues with reliability and stability. Upgrading the grid to make it more flexible and robust requires major investments in transmission lines, substations, and advanced metering and control technologies (Zaman, 2021).

Most renewable energy projects in Bangladesh have been built in areas far from demand centers and existing transmission infrastructure. This increases connection costs and technical challenges related to grid integration (Rahman, 2019). There is a lack of infrastructure like high-voltage transmission corridors to transport electricity from renewable energy sites to load centers (Zaman, 2021). Building out the grid capacity to support the growth of renewables remains a key barrier.

Bangladesh also lacks infrastructure like energy storage solutions that can help balance intermittent renewable generation. Adding large-scale energy storage through batteries or pumped hydro can make the grid more accommodating of renewables, but this requires further infrastructure development and financing support (Rahman, 2019). Overall, Bangladesh’s limited grid capacity and infrastructure makes scaling up renewable energy difficult.

Policy and Regulatory Issues

Bangladesh has implemented several policies to encourage renewable energy development, but many are unclear which has hampered growth. The country originally set a target of 10% renewable energy by 2020 under its Renewable Energy Policy, but only achieved around 3% by 2018 according to the International Renewable Energy Agency (IEA).

A key problem is uncertainty around incentives like feed-in-tariffs and tax benefits for renewable projects. Frequent policy changes and delays in incentive disbursement have discouraged investors and developers. Grid connectivity and power purchase agreements with utilities have also been challenging to secure. Clearer renewable energy policies and incentives will be needed to drive further growth.

Financing Difficulties

One of the major barriers to the growth of renewable energy in Bangladesh is the lack of access to affordable financing and investment. According to the Asian Development Bank, “Financing renewable energy projects in Bangladesh is challenging due to perceived risks by financiers and lack of experience in structuring bankable renewable energy projects.”

High upfront costs and long payback periods make renewable energy projects less financially viable for investors and developers. As reported by the National Bureau of Economic Research, “high upfront costs of renewable energy projects along with a lack of access to low-cost financing prevent these projects from being financially viable at scale.”

There is limited access to low-interest loans and other financing mechanisms that could help spur renewable energy investment. According to the Centre for Policy Dialogue, “Bangladesh Investment Development Authority (BIDA) can promote renewable energy investment to attract foreign investments and financing.”

Lack of Technical Expertise

One of the key barriers to adopting renewable energy in Bangladesh is a shortage of skilled personnel to install and maintain renewable energy systems. According to a report by Energy Monitor, the renewable energy sector in Bangladesh could face a skills shortage, especially for technical roles in offshore wind projects (https://www.energymonitor.ai/just-transition/investment-in-skills-is-key-to-realising-the-clean-energy-transition/). There is limited expertise for the operation and maintenance of solar, wind, and other renewable technologies. A study by ResearchGate found that providing technical training is crucial for scaling up off-grid renewables in rural communities in India and Bangladesh (https://www.researchgate.net/publication/292151445_Developing_an_Open_Access_Monitoring_Device_for_Off-Grid_Renewables).

The lack of an adequately trained workforce makes it challenging to install, operate and maintain renewable energy systems properly. Without developing local technical expertise, Bangladesh will continue to rely on foreign contractors and consultants, increasing project costs. Targeted training programs are needed to build domestic capacity and know-how for clean energy technologies.

Land Constraints

One of the major barriers to large-scale renewable energy projects in Bangladesh is the lack of available suitable land. With a population density of over 1,200 people per square kilometer, Bangladesh is one of the most densely populated countries in the world [1]. Much of the country consists of fertile agricultural land needed to feed the large population. Setting aside large swaths of agricultural land for renewable energy projects could threaten food security.

Most of the suitable vacant land is not contiguous and lies in small fragmented plots, making large-scale projects difficult. Bangladesh’s geography, with many rivers and flood plains, further limits the availability of suitable vacant land. While rooftop solar has great potential, large solar farms and wind farms require large connected pieces of land to be viable. With the intense competition for land in Bangladesh, acquiring sufficiently large plots for utility-scale renewable projects poses a significant challenge.

Low Awareness and Acceptance

One of the major barriers to the growth of renewable energy in Bangladesh is low awareness and acceptance among the general public. Many people in Bangladesh have limited knowledge about renewable energy technologies and their benefits (Awareness Programmes on Net Metered Rooftop Solar …). There is also a lack of social acceptance, as renewable energy is still seen as an expensive and unreliable technology compared to fossil fuels.

Several awareness campaigns have been carried out by organizations like the Bangladesh Solar and Renewable Energy Association (BSREA) to educate people on the viability of technologies like solar PV, biogas and wind energy (Solar EPC hosts renewable energy awareness seminar …). However, more grassroots campaigns are needed, especially in rural areas where energy access is poor. With higher renewable energy literacy, people will be more open to adopting clean energy solutions.

Economic Barriers

One of the main barriers to adopting renewable energy in Bangladesh is the perception that it has higher economic costs compared to conventional energy sources like natural gas and coal. Many stakeholders view renewable energy as expensive due to the high upfront capital costs required.

According to a report by the Bangladesh Energy Society, the levelized cost of electricity from solar PV in Bangladesh was estimated to be Tk 13.96/kWh in 2019, which was higher than natural gas at Tk 5.61/kWh (Source). However, solar and wind power costs have been rapidly declining globally, and are projected to fall further as deployment expands. Analyses by IRENA predict renewable energy costs will be on par or lower than fossil fuels in most regions by 2022 (Source).

There is a need for greater awareness in Bangladesh that renewable energy costs are falling, and that considering lifetime costs instead of just upfront costs shows renewables can be economically viable. Policies like tax incentives and preferential financing can also help address the perception of high costs.

Conclusion

In summary, Bangladesh faces several key barriers to adopting renewable energy, including high upfront costs, lack of infrastructure, policy and regulatory issues, financing difficulties, lack of technical expertise, land constraints, low awareness and acceptance, and economic barriers. However, Bangladesh has high potential for solar, wind, hydropower and bioenergy. With the right policies, investments, capacity building and public engagement, Bangladesh can overcome these barriers and transition to a more renewable energy based system.

The outlook is promising, as the government has set ambitious renewable energy goals and there is growing interest from the private sector and development partners. Key steps will be implementing a supportive policy framework, mobilizing financing, building human capital through training programs, raising public awareness, and investing in grid upgrades and energy storage. As costs continue to fall globally for solar, wind and energy storage, Bangladesh is well positioned to accelerate its energy transition. With concerted efforts by stakeholders, Bangladesh can realize its renewable energy potential and build a more sustainable energy system.