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Bangladesh Power Key View
- 26 Jan 2022
Key View: Bangladesh will experience a strong growth in its power sector over the coming decade, following the government's commitment to electricity security. The market will experience a slowed growth in its conventional thermal sector as it pivots towards non-hydropower renewables growth. We expect nuclear power to emerge in Bangladesh in 2024, when the Rooppur Nuclear Power Plant will be commissioned. International aid to improve Bangladesh's power grid will ensure a network that will withstand the upcoming power sector growth.
Headline Power Forecasts (Bangladesh 2021-2026)
|Indicator ||2021e ||2022f ||2023f ||2024f ||2025f ||2026f |
|Generation, Total, TWh ||91.1 ||102.9 ||107.4 ||123.4 ||133.9 ||139.8 |
|Consumption, Net Consumption, TWh ||85.3 ||92.5 ||97.6 ||109.3 ||119.8 ||125.2 |
|Capacity, Net, MW ||21,781.7 ||25,343.9 ||28,196.2 ||31,548.7 ||34,585.0 ||35,726.7 |
|e/f = Fitch Solutions estimate/forecast. Source: EIA, national sources, Fitch Solutions |
Latest Updates And Structural Trends
- We have made upward revisions to our forecasts for non-hydropower renewables this quarter. Conventional thermal power remains dominant in Bangladesh’s power sector, with a heavy reliance on gas power. Electricity capacity will experience a strong growth throughout the coming decade, though falling shy of the government’s ambitious 2030 target.
- Bangladesh remains heavily reliant on conventional thermal for electricity, with a strong pipeline of projects planned to come online in spite of the cancellation of 10 coal plants in 2021. We have made a downward revision to our forecasts for conventional thermal following the government’s commitment to renewables. The government’s aim for electricity security presents upside risk to our forecasts.Nuclear power growth in Bangladesh remains silent, except for the 2.4GW Rooppur Nuclear Power Plant expected in the early half of this decade. Downside risks to the completion of this project come in the form of elevated costs and its technical complexity.
- Upsides are mounting for Bangladesh's renewable energy sector in line with the government's growing ambitions for the industry's expansion and the project pipeline for solar power in particular has strengthened. That said, the policy and financing environment for renewables in the country remains weak and the project pipeline is still small, weighing on our forecasts for growth for the time being.
- Bangladesh will experience strong non-hydropower renewables growth, supported by a number of projects in both the solar and wind power sector’s pipeline. Downside risk remains, arising from Bangladesh’s weak financing environment.
- Bangladesh will experience an average of 12% in T&D losses for the coming decade. This will lessen over time as Bangladesh receives international financial aid to develop its national grid. Plans for regional grid integration with Nepal have progressed, which will increase power trade between both markets.
This report from Fitch Solutions Country Risk & Industry Research is a product of Fitch Solutions Group Ltd, UK Company registration number 08789939 ('FSG'). FSG is an affiliate of Fitch Ratings Inc. ('Fitch Ratings'). FSG is solely responsible for the content of this report, without any input from Fitch Ratings.