Bangladesh’s electricity demand surged by 7% over three weeks of nationwide protests that disrupted industrial and commercial activity, driven by a surge in household air conditioner use during a searing summer. Despite widespread economic disruptions stemming from protests against quotas in government jobs, Bangladesh’s power demand averaged 316 million kilowatt-hours per day, reflecting a 7% increase year-on-year, according to data from the grid regulator. This increase, though slower than the 10.1% growth experienced during the scorching June quarter, outpaced the 3.3% rise observed during the cooler March quarter.
The data underscores how rising electricity consumption in Bangladesh, which has seen the highest rate of power demand growth among nations with over 100 million people in the last decade, is being driven by households grappling with extreme weather. This trend contrasts with other developing Asian nations like India and Vietnam, where industrial consumption has been the primary driver of power demand growth.
Bangladesh, home to over 170 million people and the world’s second-largest garment exporter after China, supplying global retailers like Walmart, H&M, and Zara, is experiencing a significant shift in its energy consumption patterns. “Power demand in Bangladesh will continue to increase despite political volatility as it is primarily driven by households,” explained Shafiqul Alam, lead energy analyst at the Institute for Energy Economics and Financial Analysis. “We are facing lengthy and hotter summers compared to the past, which has increased cooling demand in households,” he added, noting that residential demand has grown at more than twice the rate of industrial demand over the past decade.
Data from the International Energy Agency reveals a decline in the share of electricity use by industries in Bangladesh from 56.7% in 2010 to 44.8% in 2019. Households surpassed industries in electricity consumption in both 2020 and 2021. Analysts and industry experts anticipate that this trend will necessitate sustained fossil fuel imports, given the country’s insufficient local production and low renewable energy output.
“Utilization of coal-fired plants will likely increase due to a fall in global prices of coal, and contribution of gas in power generation will trend slightly lower because of coal prices remaining competitive,” stated Alam. The rise in residential power use has spurred Bangladesh to significantly increase its thermal coal imports, which jumped 26.6% to 6.22 million metric tons in the first seven months of the year. This increase coincides with a nearly threefold surge in coal-fired power generation during the same period. Conversely, liquefied natural gas (LNG) imports, the country’s primary power generation fuel, grew at a much slower pace of 2.6% during the same timeframe, indicating that coal is encroaching on the share of natural gas-fired generation.
