Staff Reporter :
A new report by the Institute for Energy Economics and Financial Analysis (IEEFA) proposes a strategy to reduce Bangladesh’s dependence on expensive L
iquefied Natural Gas (LNG) imports. The study suggests that by prioritizing energy efficiency measures, the country could save a significant $460 million annually.
EEFA, a leading global energy think tank, argues that focusing on energy efficiency is a more sustainable and cost-effective approach compared to increasing LNG import.
Released on Monday, the report surveyed 51 Bangladeshi industries with a combined gas-fired power generation capacity of 250 megawatts (MW). Led by Shafiqul Alam, IEEFA’s Lead Analyst for Bangladesh Energy, the study explored solutions to address the nation’s rising LNG demand.
However, Shafiqul Alam warns that an unchecked reliance on gas could trap Bangladesh in a vicious cycle of escalating LNG prices and unreliable supply, potentially jeopardizing economic progress.
The report analyzes Bangladesh’s experience with imported LNG, highlighting the initial appeal of cheap LNG in 2018. However, the situation changed dramatically. The Covid-19 pandemic disrupted supply chains, and the 2022 Russia-Ukraine war caused a substantial LNG price increase.
The report acknowledges the widespread adoption of LNG by industries for manufacturing processes and power generation due to unreliable grid electricity. This dependence on LNG for both industrial uses and power generation is identified as a key challenge.
However, it also presents an opportunity. IEEFA suggests that by focusing on improving energy efficiency within these industries and the power sector, Bangladesh can significantly reduce its overall LNG demand.
“Low efficiency in gas-fired captive power generation consumes a significant amount of gas annually. This is despite the average efficiency in captive generation increasing to 35.38pc from 30pc in the last decade,” Alam said.
He said, “Moreover, a significant percentage of industries do not utilise the waste heat released by these generators.”
The report found that by replacing the vast stock of ageing, inefficient generators with more efficient models already available, and harnessing the waste heat produced by generators for other applications, Bangladesh could reduce the demand for imported LNG by a massive 50.18 billion cubic feet a year, or 21 percent, representing an annual saving of $460 million.