Demand-Side Energy Efficiency Opportunities in Bangladesh

Abstract

Enhancement of energy efficiency (EE) can help bridge the gap between supply and demand for energy. This paper assesses the energy efficiency and conservation (EE and C) potential of sixteen EE end-use technologies and subsectors (for both primary energy (oil, gas and coal) and electricity) in Bangladesh vis a vis “business-as-usual”. Further, it prioritizes among them on the bases of their potential for generating energy savings, their costs, and the benefits of deployment on a large scale. The end-use EE improvement technologies/measures analyzed range from lights, fans, and refrigerators to motors, boilers, and chillers. Sectors covered include garments, textile dyeing and weaving, steel and cement. They were chosen for analysis because they represent the most promising prospective candidates for demand side energy efficiency improvement in the country. The analysis indicates that a total of 400 petajoule (PJ) can be saved in the year 2030 when the projected total primary energy requirement is likely to be approximately 2800 PJ, i.e., a savings of 14.3 percent of the total primary energy requirement in 2030 can be achieved by implementing EE measures alone. A back-of-the-envelope calculation of the relative cost effectiveness of the different options analyzed provides a measure of the costs and benefits of these EE options. Despite domestic electricity and gas prices being fairly low in comparison with international market prices, the cost of saved energy for most options is either low or negative: in other words, these EE investments have a favorable rate of return and should be a key part of energy sector development in Bangladesh. Higher electricity or gas prices would increase the cost-effectiveness of all options because the monetized value of energy saved would be higher.