Electricity generation from renewable energy in Bangladesh revisited

Since the commissioning of last unit of hydroelectric power plant of aggregate capacity of 230 MW in 1988, installed capacity of renewable energy based electricity in Bangladesh has only been increased by 276 MW, mostly from off-grid solar home systems. The formulation of renewable energy policy and establishment of Nodal Agency to administer the sector have, in fact, not been able to bring any revolution in the sector even during the time of falling price of renewable energy in the world. This paper provides a review on the status quo of renewable energy based electricity generation in Bangladesh. It has looked into the reasons within the existing policy frameworks and concludes that necessary incentive is missing to provide price signal to drive investment in the sector. By examining policy instruments of different countries, the paper recommends that policy push through Feed-in-Tariff for large scale grid connected projects and in the form of net metering for solar roof-top projects would help address the challenges of the sector. While existing refinancing scheme, which is a common scheme for different products, can only motivate investors of very small scale renewable energy projects, a dedicated funding scheme with attractive interest rate shall be designed for large scale projects.