Just Transition to Clean Energy: Experiences of Bangladesh

Session Report
Mansi Garg

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Dr. Khondaker Golam Moazzem, Research Director at the Centre for Policy Dialogue (CPD) in Dhaka, Bangladesh, delivered a talk on ‘Just Transition to Clean Energy: Experiences of Bangladesh’ discussing the concept of a “just transition” in the context of energy transition. He explained that while energy transition typically involves shifting from fossil fuels to renewable or clean energy sources, a just transition also considers the social impacts, particularly on employment and income, of those who rely on energy-related economic activities. He highlighted that Bangladesh is still in the early stages of this transition, and the social and economic impacts are not yet extensively visible.

Dr. Moazzem outlined the main topics he would cover in his presentation, including the current state of the power and energy sector in Bangladesh, the country’s global commitments on energy transition and climate vulnerability, national policies related to energy and power, the influence of public and private sector institutions, initiatives and activities for energy transition, and regional cooperation and partnerships in this context.

Bangladesh’s Scenario

He provided an overview of Bangladesh’s energy consumption, emphasizing the significant role of natural gas in the energy mix. He also discussed the challenges associated with the depletion of domestic natural gas reserves and the growing reliance on imported energy sources, particularly LNG.

Dr. Moazzem explained how Bangladesh’s energy consumption has led to a substantial increase in carbon emissions over the years, emphasizing the need for the country to contribute to global efforts in reducing emissions despite its low overall contribution.

In terms of the power sector, he highlighted the growth in power generation capacity and per capita availability of electricity. However, he noted that excess capacity and the associated capacity charges have become a concern. He also discussed the energy mix in power generation, including the increased use of coal due to rising fossil fuel prices.

The speaker touched upon various sectors, such as transport, agriculture, and industry, where energy consumption and emissions occur. He pointed out the need for a comprehensive approach to energy transition that considers all economic activities, not just the power sector.

Dr. Moazzem discussed Bangladesh’s commitments in its nationally determined contributions (NDCs) related to reducing carbon emissions, with a focus on the power sector, electric vehicles, and renewable energy sources. He emphasized that despite these commitments, there is a lack of concrete initiatives aligned with the goals.

He mentioned the Prime Minister’s recent statements on canceling coal-based power plants and the goal of sourcing 40% of energy from renewables by 2041, which is reflected in the Mujib Climate Prosperity Plan.

Finally, Dr. Moazzem discussed Bangladesh’s role as the chair of the Climate Vulnerable Forum and its efforts to create a global partnership for climate and energy, including commitments related to climate finance, adaptation, and mitigation.

Highlights

Dr. Khondaker Golam Moazzem has provided an extensive overview of the energy transition situation in Bangladesh, highlighting key challenges and opportunities. Here’s a summary of the main points he discussed:

Global Energy Transition

Dr. Moazzem noted that Bangladesh is striving to align with global energy transition goals. The country has made several commitments at the international level to reduce its reliance on fossil fuels and promote clean energy.

National Energy Policies

He discussed various energy-related policies in Bangladesh from 1996 to 2021, with a particular focus on renewable energy policies. These policies aim to establish regulatory mechanisms, promote renewable energy programs, enhance energy efficiency, and more. However, many existing policies do not adequately prioritize clean energy or align with the country’s clean energy goals.

Draft Policies

Dr. Moazzem mentioned upcoming policies and plans, such as the Integrated Energy and Power System Master Plan and the Renewable Energy Policy 2022. However, these draft policies also fall short of adequately promoting clean energy, and there’s a lack of alignment with government commitments.

Challenges in Institutional Transition

He highlighted that public institutions in the energy sector primarily focus on fossil fuels, which creates a challenge in transitioning to clean energy. There’s resistance to change within these institutions, and they often hinder the progress of clean energy initiatives.

Overambitious Energy Demand Projections

Dr. Moazzem pointed out that there is an overambitious projection of electricity demand, leading to excessive investment in power plants and capacity charges for unused electricity. This poses a significant fiscal burden on the government.

Financial Aspects

The financial aspects of clean energy initiatives need clarity. Funding sources for renewable energy projects, especially solar and wind power, need to be well-defined to attract investments.

Job Creation

Transitioning to renewable energy, particularly solar-based irrigation systems, can lead to job creation and empower rural communities, including women.

Innovative Financing

Dr. Moazzem stressed the importance of innovative financing options, such as reducing financing for fossil fuel-based projects, supporting the phase-out of such plants, and providing funding for renewable energy supply chains. He also emphasized the need to reduce favouritism toward fossil fuel sectors through subsidies and tax breaks.

Regional Cooperation

While Dr. Moazzem appreciates cross-border energy trade and investments, he advocates for ensuring that these initiatives promote renewable energy rather than fossil fuels.

Domestic Renewable Energy

Ultimately, the goal should be to strengthen the domestic renewable energy sector, reduce dependence on imported energy, and phase out fossil fuel use in favor of clean energy sources.

Conclusion

In conclusion, Dr. Khondaker Golam Moazzem’s presentation sheds light on the intricate landscape of energy transition in Bangladesh. The concept of a “just transition” stands out as a central theme, emphasizing the importance of not only shifting to cleaner energy sources but also addressing the social and economic impacts on communities dependent on energy-related activities.

Bangladesh faces a unique set of challenges and opportunities in its pursuit of a sustainable energy future. While the country has made commitments on the global stage to reduce its reliance on fossil fuels and promote renewable energy, there are critical gaps in policy alignment and institutional readiness.

Bangladesh’s role as the chair of the Climate Vulnerable Forum signifies its commitment to addressing climate change and energy transition. However, there is a clear need for concrete initiatives, policy reform, and a collaborative approach to achieve its clean energy objectives.

In the face of these challenges and opportunities, Bangladesh stands at a critical juncture. Dr. Moazzem’s insights underscore the importance of immediate action, innovative thinking, and robust policy measures to ensure a just and sustainable energy transition in the country.

Acknowledgement: Mansi Garg is a research intern at IMPRI.

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