Bangladesh is increasing its power imports from India to address a surge in electricity demand, grappling with constraints on domestic gas supply and coal plant maintenance. Power imports, predominantly from a coal-fired plant operated by Adani Power in eastern India, have risen by 70% in the seven months leading up to July. This increase has been crucial in satisfying the majority of the escalating demand.

Historically, natural gas met approximately two-thirds of Bangladesh's power needs up until 2020. However, due to challenges in gas infrastructure and a focus on cost reduction, the country has been actively increasing both power imports and local coal-fired generation. According to Adeeba Aziz Khan, a director at Summit Power, cost-effectiveness is a key driver, as gas is also essential for the fertilizer industry, while cheaper electricity can be sourced from alternatives like fuel oil.

Data indicates a significant shift in Bangladesh's power generation mix. The share of power imports surged from 9.5% to 15.4% during the first seven months of this year, while fuel oil-fired power generation increased from 11.9% to 12.6%. Meanwhile, the contribution of natural gas to power generation decreased from 46.8% to 43.9%, and domestic coal-fired output fell from 30.1% to 26.2%.

To further meet its energy demands, Bangladesh increased its imports of liquefied natural gas (LNG) by 24% in the same period. Despite this increase in LNG imports, gas-fired power generation experienced a 1.2% decrease, highlighting the growing reliance on alternative energy sources.

In related developments, Bangladesh is also set to import 1,000 megawatts of renewable electricity from India, with a memorandum of understanding already signed. This move aligns with the government's focus on transitioning from fossil fuels to renewable energy sources, with a target of achieving 10% renewable energy by 2025 and 40% by 2041. In addition to importing renewable energy from India, Bangladesh is also working on agreements to import 40MW of electricity from Nepal and exploring opportunities with Bhutan.

The country aims to source 10% of its total electricity from renewable sources by 2025, requiring 2,600MW from renewable sources. Currently, approximately 450 megawatts are already being supplied from renewable sources.