{"id":3928,"date":"2016-04-03T14:05:52","date_gmt":"2016-04-03T08:05:52","guid":{"rendered":"https:\/\/bbf.digital\/new\/?p=3928"},"modified":"2017-09-09T22:56:40","modified_gmt":"2017-09-09T16:56:40","slug":"powering-bangladeshs-future","status":"publish","type":"post","link":"https:\/\/bbf.digital\/new\/powering-bangladeshs-future","title":{"rendered":"Powering Bangladesh\u2019s Future"},"content":{"rendered":"

By<\/span> LightCastle Partners\u00a0<\/a><\/span><\/span><\/p>\n

If RMG is at the heart of the Bangladesh success story, <\/span>then the power infrastructure is its lifeblood. Greater power generation as well as access to electricity is key <\/span>to fueling the growth of not only key <\/span>industries but also the growing appetites of urban middle-class households. At <\/span>the moment, continued heavy investment in energy infrastructure has made improvements but by 2030 Bangladesh\u2019s power demand may well reach 34,000 MW. <\/span>The challenge of filling this gap represents a multi-billion dollar opportunity for invest.<\/span><\/span><\/p>\n

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Meeting the Energy Demands of the Future<\/span><\/h2>\n

The government has made great strides in electricity generation over the last decade. Over the period 2006-2015, peak demand of electricity in the national grid grew at a CAGR of 8.11% per year, from 2787 MW in 2006 to 6078 MW in 2015. On the supply end, installed capacity grew at a faster pace of 9.11% CAGR per year, from 4650 MW to 11282 MW.<\/span><\/p>\n

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Furthermore, load-shedding has become far less frequent during this period as peak electricity generation has usually kept pace with peak demand. Consistent electricity generation is a key issue for thrust sectors such as RMG, and also a key factor in facilitating greater internet activity among the population.<\/span><\/p>\n

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However, there is still much work to be done for the future, as electricity demand may well reach 34,000 MW by 2030. This means that not only will the government need to continue to heavily invest in the power sector, but must also expand the scope of operations as well as change its nature over time.<\/span><\/p>\n

See Also: Shifting Sands of the Apparel Industry<\/a><\/span><\/p>\n

Moreover, 62% of the population is currently covered by the electricity grid with the rest of the population set to come online in the near future. This represents a still untapped market of 61 million people who will be connected to the national grid in the coming years as Bangladesh continues its growth trajectory out of the LDC category.<\/span><\/p>\n

The power industry is unique in the fact that overhauling it can impact all components across the vertical production chain. This presents ample opportunity for investment in areas ranging from electricity generation to distribution channels in the fuel sourcing function.<\/span><\/p>\n

The Changing Composition of the Fuel Mix<\/span><\/h2>\n

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At the moment, the vast majority of the electricity generated (62.59%) comes from natural gas, which is currently the cheapest fuel source. However, this status quo cannot remain much longer as natural gas reserves are depleting fast and won\u2019t be able to support electricity demand after 2019.<\/span><\/p>\n

For the next five-year plan of 2016-2020, the Planning Commission<\/a><\/span> has outlined the need to move away from natural gas. The focus will be shifted towards imported coal and LNG, which will be used to generate an additional 6000 MW of electricity.<\/span><\/p>\n

A significant portion of this additional power will be provided by the private sector. Already, the private sector provides 42% of the total installed capacity.<\/span><\/p>\n

Se<\/a><\/span><\/span>e Also: The Bangladesh Growth Story<\/a><\/span><\/span><\/p>\n

The Way Forward<\/span><\/h2>\n

The search for long-term alternatives to natural gas is already underway. Although coal currently is the target of the largest efforts in this context, other options such as hydroelectricity and solar power are also being explored. Overall, there is the opportunity to potentially invest 70.5 Billion USD to gear up for Bangladesh\u2019s power needs of 2030.<\/span><\/p>\n