The national draft ‘Integrated energy and power master plan’, if finalised and implemented in its current shape, will aggravate Bangladesh’s ongoing economic and energy crises, warned a report released on Monday by the London-based research organisation BloombergNEF.

Fossil fuels account for 97 per cent of Bangladesh’s current installed power generation capacity of 23.2GW, the report said, analysing data until the end of 2022.

Bangladesh plans to build 11.1GW of new gas-fired capacities by 2027, mostly on imported liquefied natural gas, while building 6.5GW of new coal capacities by 2026, mostly depending on imported coal.

Due to increased dependence on LNG to supplement domestic gas supply, the gas fuel price for power generation in Bangladesh is expected to rise by 123 per cent to $8.3 per MMBtu in 2030 from an estimated $3.7 per MMBtu in 2023, the report said.

Bangladesh’s plan to introduce technologies, such as, using hydrogen and ammonia for power generation, carries the risk of emitting highly polluting substances into the atmosphere.

‘Bangladesh’s heavy reliance on fossil-fuel-run thermal power plants has reduced the country’s energy security, while draining its foreign currency reserves and increasing local pollution,’ said the report.

‘In addition, further expansion of fossil-fuel-run thermal power plants would jeopardise the country’s energy security and affordability,’ the report added.

The levelised cost of electricity for a new utility-scale solar project in Bangladesh ranges from $97-135 per MWh at the moment, compared to $88-116 per MWh for a combined cycle gas turbine and $110-150 per MWh for a coal fired power plant, according to the report.

This more than doubles the marginal cost of an existing combined cycle gas turbine plant between 2023 and 2030, the report said.

The report predicted that solar will become the cheapest option, thanks to the continued technology cost reduction by 2025, the report said.

Electricity from the onshore wind paired with batteries will also become cheaper than the new thermal plants by mid 2030s.

‘Even if fossil fuel prices decline, renewables will still be more economical than thermal power plants,’ said Caroline Chua, co-author of the report.

Despite renewables’ cost competitiveness, Bangladesh is considering building more thermal power plants, on the assumption that such power plants can run on cleaner fuels such as hydrogen or ammonia post 2030.

However, BNEF’s analysis shows that retrofitting thermal power plants for hydrogen or ammonia will not be cheaper than building the renewables.

In 2050, the levelised cost of electricity for utility solar would be around $50 per MWh, while onshore wind would be above $50 per MWh and the cost would be between $200 and $250 per MWh for producing electricity with hydrogen.

In 2050, the levelised cost of electricity for 50 per cent hydrogen blending would be around $150 per MWh.

The levelised cost of electricity for retrofitted combined cycle gas turbine and coal-fired power plants in 2050 would be about $100 per MWh and between $200 per MWh and $250 per MWh respectively.

Combustion of fuels such as ammonia or hydrogen at high temperatures leads to more emissions of nitrogen oxides, which has 273 times greater global warming potential than carbon dioxide over a 100-year timescale, the report said.

The levelised cost of electricity of a new solar plant in Bangladesh is estimated to decline by 63 per cent between now and 2030, the report added.

Shahriar A Chowdhury, director for the Centre for Energy Research at the United International University in Bangladesh, said that the draft integrated energy and power master plan appears to have ignored or underestimated the country’s renewable energy potential.

‘The master plan should have highlighted the needs of the present and predictable future, and outlined the strategy accordingly to fulfill the energy needs of Bangladesh, while not making commitments to industries and technologies which evolve rapidly and unpredictably,’ said Shahriar.

Fossil fuel overdependency already landed Bangladesh in a tight spot with dozens of power plants remaining out of operation for fuel crisis.

Since July last year, shortage of fuel prompted the government to keep enforcing rolling power outage, half a day in places.

The power price has increased three times this year already, while the gas price once.