A recent Bangladeshi government review has highlighted significant overcapacity in the country's energy sector, identifying between 7.7 gigawatts and 9.5 GW of stranded or structurally underutilized capacity [1]. The review estimates that stranded capacity alone could cost up to 165 billion taka ($1.33 billion) annually through capacity payments to unused power plants [1]. This situation is contributing to persistently high electricity costs and an inflated government subsidy bill, even as consumers are facing higher prices following recent hikes [1]. The payments to idle power plants are a key factor driving these increased costs, placing additional financial strain on both the government and consumers [1].
CONCLUSION
Bangladesh's energy sector is grappling with substantial overcapacity, resulting in elevated costs and subsidies. The government's review underscores the financial burden of unused power plants, which is impacting both state finances and consumer electricity prices. This situation signals ongoing challenges for Bangladesh's energy policy and fiscal management.