The Real Crisis Is Not Electricity, But Energy

Bangladesh’s electricity crisis is often presented as a simple mismatch between demand and supply.

When the lights go out, the immediate explanation is usually a shortage of fuel, a technical problem or insufficient generation.

But the current crisis suggests something much deeper. Bangladesh has built a power sector with a large generation capacity, yet millions of consumers are still experiencing long hours of load shedding.

The paradox is difficult to ignore: the country has more generating capacity than ever before, but it is struggling to produce enough electricity when people and industries actually need it.

The scale of the problem is particularly striking in rural Bangladesh. Of more than 50 million electricity consumers, about 37.1 million are rural consumers. In some rural areas, load shedding has reportedly reached 10 to 12 hours a day.

For households, this means disrupted study, work, communication and daily life. For small businesses, it can mean losing an entire working day.

For industries, particularly export-oriented ones, an unreliable electricity supply can translate directly into higher production costs, delayed shipments and lost competitiveness.

The numbers reveal an uncomfortable contradiction. Bangladesh’s total power generation capacity, including captive generation, is around 33,000 megawatts.

Grid-level capacity, including electricity imported from India and Nepal, stands at about 29,593 megawatts.

Yet the country’s highest daily generation this year was 17,201 megawatts, while peak demand during the summer crossed 18,000 megawatts. On August 10, the highest daily load shedding reached 3,757 megawatts.

This means the central problem is not simply that Bangladesh does not have enough power plants.

The country has spent years increasing capacity. The more fundam6ental question is whether that capacity is economically and physically usable when electricity is required.

The answer increasingly points towards fuel. A large part of Bangladesh’s electricity generation depends on gas, while many industries maintain captive power plants that also depend on gas.

As domestic gas production has failed to increase sufficiently, the country has become increasingly dependent on imported fuel. At the same time, difficulties surrounding LNG imports have added another layer of vulnerability.

A power plant without affordable fuel is, in practical terms, little more than an expensive piece of infrastructure.

This exposes one of the biggest weaknesses in Bangladesh’s energy planning. For years, electricity generation was treated as the principal objective, while the availability, affordability and diversification of primary fuel received comparatively less attention.

The result was an expansion of generation capacity without a corresponding transformation of the underlying energy system.

The previous government responded to earlier power shortages through emergency measures. Oil-fired and imported coal-based plants were built, while private generation received significant encouragement, including through special legal arrangements that reduced competition.

These measures helped Bangladesh move towards near-universal electricity access and substantially expanded installed capacity. But solving one crisis created another.

Expensive fuels increased generation costs, import dependence deepened and substantial capacity payments became a burden even when plants were not producing electricity.

The problem, therefore, is not simply excess capacity. It is the wrong combination of capacity, fuel dependence and cost.

A power sector can have thousands of megawatts of installed capacity and still fail consumers if the plants are too expensive to operate, lack fuel or cannot be brought into production at the right time.

Bangladesh appears to be confronting precisely this problem. Capacity exists on paper, but usable and affordable electricity remains insufficient.

There is another uncomfortable dimension. The power sector gradually moved away from being viewed primarily as a public service and towards a model in which electricity generation, distribution, transmission and fuel supply all became increasingly connected to commercial returns.

Critics of the existing system argue that this structure has encouraged costly investment while weakening incentives for efficiency and competition.

That criticism deserves serious attention. Electricity is unlike many ordinary commodities. A consumer cannot simply decide not to buy it when prices rise or supply becomes unreliable.

A factory cannot easily relocate its production because electricity has become expensive for a month. The cost of an inefficient power system is therefore distributed throughout the economy.

Households pay through higher bills, businesses pay through higher production costs and the state ultimately pays through subsidies, debt and lost competitiveness.

The government now says that improving the electricity and fuel situation could take at least two years and that a 10-year action plan for the electricity sector will be presented to parliament.

If that plan is to succeed, it must avoid the temptation of treating the current crisis as another temporary shortage that can be solved by adding more power plants.

Bangladesh needs to ask a more fundamental question: what kind of energy system can it actually afford?

That requires diversification. Renewable energy cannot immediately replace every conventional source, but continuing to depend excessively on imported fossil fuels is also unsustainable.

Solar power, greater efficiency and other renewable options need to become part of the mainstream energy strategy rather than remaining peripheral ambitions.

Solar irrigation, for example, can reduce dependence on diesel, while greater electrification of industrial processes and transport can gradually reduce dependence on gas and oil.

Regional electricity cooperation can play a much greater role. Bangladesh already imports electricity from India and Nepal, and imports account for roughly 9 percent of total electricity demand.

A stronger regional grid could provide something Bangladesh urgently needs: flexibility. Electricity generated in one country could help address shortages in another, while surplus renewable power from Nepal or Bhutan could potentially become part of Bangladesh’s future energy mix.

But regional imports should not become another form of dependency without careful attention to price, contracts and energy security.

The controversy surrounding the Adani power agreement demonstrates why the terms of electricity imports matter as much as the electricity itself.

Importing power can be sensible when it is competitive and strategically useful. It becomes problematic when consumers are locked into costly arrangements without adequate transparency or flexibility.

Bangladesh’s present electricity crisis is therefore a warning about the difference between building infrastructure and building resilience.

The country succeeded in expanding access to electricity and increasing generation capacity. But the next stage cannot be measured simply by counting megawatts.

It must be measured by asking whether electricity is available when needed, whether consumers can afford it, whether industries can rely on it and whether the system can withstand shocks in global fuel markets.

The most important lesson is that Bangladesh does not merely need more electricity. It needs a cheaper, more diversified and more resilient way of producing and delivering electricity.

Otherwise, the country may continue to build power plants while repeatedly discovering that the real shortage is not capacity, but the ability to turn capacity into affordable power.

For millions of rural consumers facing 10 to 12 hours of load shedding, that distinction is not theoretical. For factories struggling with fuel costs and unreliable supply, it is a matter of survival.

And for an economy seeking to remain competitive, it may ultimately determine whether the next decade becomes a period of energy security or another cycle of expensive emergency solutions.

(The writer is an Academic, Journalist, and Political Analyst based in Dhaka, Bangladesh. Currently he teaches at IUBAT. He can be reached at nazmulalam.rijohn@gmail.com)