Electricity generation across Bangladesh has dropped to less than one-fourth of the country’s overall capacity due to reduced demand during the winter season, resulting in minimal usage.

While this decrease in demand alleviates the chronic power shortages experienced during summer, the government is still liable to pay significant capacity charges for the unused power plants.

According to the Bangladesh Power Development Board (BPDB), electricity generation during peak hours on January 12 reached 6,665 megawatts (MW), which accounts for only 24.17 percent of the total installed capacity of 27,566 MW. During the evening peak hours that day, generation increased to 10,043 MW, representing 36.43 percent of the capacity.

Comparative data from a year ago shows higher power generation during peak hours. On January 14, 2024, daytime peak-hour generation stood at 8,914 MW, while evening peak-hour generation was 10,286 MW. According to BPDB figures, the overall generation capacity, however, has increased by 1,062 MW over the past year, from 26,504 MW to 27,566 MW.

Market insiders highlight concerns over the financial burden of capacity payments to idle power plants under contractual agreements. These payments are expected to soar as unused plants remain operational during the low-demand winter months.

Although power generation has decreased, BPDB reports that the country did not experience load-shedding, indicating that industrial and agricultural activities have not expanded significantly to require higher electricity output.

Gas-fired power plants continue to be the primary source of electricity generation, contributing 97.28 million kilowatt hours (mkWh). Coal-fired plants generated 74.60 mkWh, oil-based plants produced 12.16 mkWh, solar plants added 3.10 mkWh, and hydro and wind plants collectively contributed around 1.0 mkWh.

The decline in electricity generation has also impacted natural gas demand. Bangladesh has been grappling with a natural gas crisis due to inadequate exploration of domestic reserves, forcing the country to rely heavily on costly liquefied natural gas (LNG) imports.

On January 12, 42 gas-fired power plants were shut down as Petrobangla supplied only 719 million cubic feet per day (mmcfd) of natural gas, meeting just 29.71 percent of the plants’ total demand of around 2,420 mmcfd. Sources indicate that the country’s domestic natural gas supply is declining due to continuous depletion of reserves and insufficient efforts to boost extraction.

Petrobangla data from January 13 shows that Bangladesh’s overall natural gas production stands at approximately 2,694 mmcfd, including 755 mmcfd from regasified LNG. Local gas fields, including those operated by international oil companies (IOCs), contribute around 1,939 mmcfd.