Load Shedding Surges as Fuel Shortages Strain Bangladesh’s Power Sector

Bangladesh is facing a fresh surge in load shedding, with rural areas bearing much of the burden as shortages of gas and coal, high fuel costs and financial pressures on the power sector limit electricity generation.

Peak load shedding has exceeded 3,000 megawatts a day in recent days, according to data from the Bangladesh Power Development Board (BPDB) and Power Grid Bangladesh PLC. On Monday, the highest shortfall recorded up to 8pm was 3,757 megawatts, compared with 3,671 megawatts the previous day.

The deterioration comes despite significant increases in electricity tariffs. Wholesale electricity prices rose by an average of 19.85 per cent in June, while retail tariffs increased by an average of 16.68 per cent. Yet the BPDB has not been able to clear the large sums owed to power producers, leaving the sector under considerable financial strain.

Officials said the benefit of the latest tariff increase would take around two months to reach the BPDB’s accounts. They expect the higher tariffs to prevent the accumulation of fresh arrears, while existing liabilities will be settled gradually.

The country currently has an installed electricity generation capacity of around 29,000 megawatts. However, at the time of the highest load shedding on Monday, demand stood at 16,262 megawatts while supply was only about 12,500 megawatts. This meant that more than half of the country’s installed capacity was not being utilised.

Fuel shortages are a major factor behind the gap. Gas-fired power plants are generating less than 4,000 megawatts, while additional gas supplies may take several more days to become available. Oil-fired plants could help bridge the shortfall, but their high operating costs have discouraged continuous use. Although generation from oil-based plants has been increased for several hours after evening demand rises, output is generally kept below an average of 1,500 megawatts for much of the day.

Coal-fired plants have therefore become a crucial source of electricity. But several major coal plants have also recently experienced production disruptions.

At the Payra power plant in Patuakhali, generation was reduced by half from 2 August after maintenance began on one of its units. The plant resumed operations and began increasing output again on Sunday night. However, it is owed more than Tk 9,000 crore, raising concerns that coal supplies could be disrupted from next month if outstanding payments are not addressed.

Another coal-fired plant in Patuakhali is also facing a shortage of coal, resulting in lower generation. Meanwhile, the Adani power plant in Jharkhand, India, reduced generation from 7 August after storms and rain disrupted coal supplies.

The BPDB held an online meeting with power producers on Monday afternoon and instructed several plants to increase generation where possible. Payra was supplying around 800 megawatts in the evening and was asked to raise its output further. The Adani plant was also requested to increase generation. The plant operator said coal supplies were expected to return to normal between Tuesday night and Wednesday morning.

The situation is particularly difficult outside Dhaka. The capital’s two electricity distribution companies, Dhaka Electric Supply Company and Dhaka Power Distribution Company, have not reported significant shortages against demand. In contrast, distribution companies outside Dhaka say the Rural Electrification Board (REB), which supplies electricity to most rural areas, is receiving considerably less power than required.

Feni provides a clear example of the pressure on rural consumers. The combined electricity demand of BPDB and REB in the district is around 140 megawatts, while the average daily shortage is about 30 megawatts. At a food-processing factory in Feni, its director said load shedding was affecting production for roughly 35 per cent of the working day.

An official of the Feni Rural Electricity division said the district was experiencing a shortage of around 15 per cent.

The imbalance between urban and rural supply highlights a wider challenge facing Bangladesh’s power sector. Having sufficient installed capacity does not necessarily guarantee uninterrupted electricity when fuel supplies, plant availability, transmission constraints and the financial health of the sector remain under pressure.

The pattern has become particularly noticeable during periods of high demand. Since 2022, load shedding has repeatedly intensified during the hotter months, especially outside Dhaka. Rainfall can provide temporary relief by lowering temperatures and reducing electricity demand, but it does not resolve the underlying supply and fuel constraints.

Power-sector officials say efforts are continuing to increase generation. In the short term, however, the combination of gas shortages, limited coal supplies, unpaid bills and the high cost of oil-fired generation means consumers—particularly those in rural areas—are likely to remain vulnerable to prolonged interruptions until fuel availability and generation capacity improve.