- BNEF says solar energy is set to become the cheapest energy source in Bangladesh by 2025
- Investing in proven renewable energy technologies like solar and wind will be cost-effective, instead of newer technologies that are yet to mature
- Renewables can also help it improve energy security and lowering Bangladesh’s dependence on LNG and coal imports
Come 2025 and solar energy will become the cheapest clean energy option for fossil-fuel reliant Bangladesh to meet its growing demand for electricity, thanks to continued technology cost reduction. Further on, by 2030, solar with battery storage (PVS) will have a cheaper levelized cost of electricity (LCOE) than new thermal power plants, says the Bloomberg New Energy Finance (BNEF).
Currently, a new utility-scale solar project costs between $97/MWh and $135/MWh in Bangladesh, making it cheaper than building a coal power plant whose LCOE ranges between $110/MWh and $150/MWh. A combined cycle gas turbine (CCGT) facility costs $88/MWh to $116/MWh.
Going forward, PVS systems will become cost-competitive against new coal and gas power plants with their LCOE reaching $66/MWh and $134/MWh by 2030, down to $37/MWh and $84/MWh by 2050.
BNEF in its report titled Bangladesh Power Sector at the Crossroads gives these estimates to show that building new thermal power plants and co-firing ammonia with coal and blending hydrogen with natural gas to reduce emissions will not be the best approach for the country to reduce emissions. Neither will it be cost-effective. In fact, it will pose significant financial risk for the country.
Yet, the government has ‘ignored or underestimated’ the country’s renewable energy potential and the role of proven technologies like solar and wind in its draft Integrated Energy and Power Master Plan (IEPMP). Instead, the draft highlights still evolving technologies like hydrogen, ammonia, and carbon capture.
“Renewables can improve the country’s energy security by lowering dependence on LNG and coal imports while also creating new job opportunities,” said Co-Author of the BNEF report, Caroline Chua. “Our sensitivity analysis shows that even if fossil fuel prices decline, renewables will still be more economic than thermal power plants.”
The complete BNEF report is available on its website for free download.