The rapid cost reduction of solar and wind power generation since 2007 has made the transition toward clean energy more feasible for countries working to drastically contain greenhouse gas emissions to meet the targets of the Paris Agreement. While there are still technical challenges of large-scale grid integration, owing to the high cost of energy storage to address the problem of intermittency, the present situation is more favorable for the deployment of renewable energy. Energy efficiency is now prioritized as an avenue to not only save energy but also minimize costs while reducing greenhouse gas emissions. Both goals must be pursued simultaneously to make the energy system of a country sustainable.

To this end, Bangladesh has been promoting renewable energy and energy efficiency, supported by policies and regulations. Yet the country has its own set of obstacles to utilizing renewable energy at scale.

In light of the above trends, this essay describes the transformation of Bangladesh’s energy sector during the last decade and identifies the factors that have influenced this transformation. The essay then sheds light on the challenges that currently confront the sector. It concludes by considering policy options for Bangladesh to make strides toward a sustainable energy transition and build an energy system that is resilient against the price shocks of fossil fuels in the international markets.