BD on track to achieve energy efficiency targets ahead of 2030: IEEFA
Business Report :
Bangladesh’s nearly decade-long push to curb energy waste and improve efficiency is delivering tangible economic and environmental dividends, with the country now on course to meet and potentially exceed its national energy efficiency targets ahead of schedule, according to a new report by the Institute for Energy Economics and Financial Analysis (IEEFA).
The report, “Bangladesh’s Energy Efficiency Goals Within Reach”, authored by Shafiqul Alam, Lead Energy Analyst for Bangladesh at IEEFA South Asia, finds that sustained efficiency gains since 2016 have helped the country save billions of dollars in fossil fuel imports while strengthening energy security during periods of global market volatility.
Analysing trends in primary energy consumption and gross domestic product (GDP) over the past decade, the study shows that between fiscal year (FY) 2014-15 and FY2023-24, Bangladesh improved its energy efficiency by 13.64 per cent a significant step toward the national target of 20 per cent by 2030.
“In FY2023-24 alone, energy efficiency gains enabled Bangladesh to cut fossil fuel consumption by 7.02 million tonnes of oil equivalent, avoiding import costs of approximately USD 3.34 billion,” Alam said.
The report notes that early progress was uneven, but the global energy price shock during FY2021-22 made efficiency an urgent priority. Bangladesh benefited from the Energy Efficiency and Conservation Master Plan adopted in 2016, which laid the policy groundwork for faster action.
A combination of regulatory reforms, low-cost financing and supportive programmes has since accelerated progress. Bangladesh’s average annual energy efficiency improvement rate now stands at around 1.52 per cent, putting the country on track to achieve its 2030 goal as early as 2029. The study also finds Bangladesh is likely to meet its updated Nationally Determined Contribution target of 19.2 per cent by 2035 at least a year early.
Households and industry together responsible for nearly two-thirds of total energy consumption are key to future gains. The widespread shift to energy-efficient LED lighting and growing adoption of efficient air conditioners have already delivered major savings.
“Energy efficiency labels will help drive greater adoption of efficient appliances amid information asymmetry in the market,” Alam said.
However, the report cautions that much of the “low-hanging fruit” has been used. It calls for greater focus on industrial motors, captive generators, electric boilers and passive building design in the commercial sector.
High import duties on LED components and inverter compressors are also identified as barriers, prompting calls for policy reform.
“Energy efficiency goes beyond reducing electricity bills,” Alam said. “With a coordinated approach among regulators, consumers, financiers and technology providers, it can rapidly transform Bangladesh’s energy system.”