Bangladesh’s growing dependence on imported fossil fuels is leaving its energy sector increasingly exposed to global shocks, with recent supply disruptions underscoring structural vulnerabilities and intensifying calls for rapid diversification, according to a new analysis by energy think tank Ember.
The report, produced in partnership with the Climate Vulnerable Forum and V20 Finance Ministers (CVF-V20), places Bangladesh among a group of 74 climate-vulnerable economies where fossil fuel reliance has become a persistent economic and strategic liability.
Bangladesh’s exposure is particularly acute.
The country generates nearly 98% of its electricity from fossil fuels, while renewable energy contributes only around 2% to 3% of total power generation.
At the same time, about 65% of its power supply depends on imported fuel and electricity, reflecting a sharp shift away from domestic energy sources.
This model has left the country highly sensitive to global price volatility and geopolitical disruptions.
The recent instability in the Middle East, which disrupted liquefied natural gas (LNG) supply chains, has once again highlighted the fragility of Bangladesh’s import-dependent system.
LNG now accounts for roughly 22% of Bangladesh’s gas supply, as domestic reserves decline.
When long-term contracted supplies are disrupted, the country is forced into the spot market, where prices can surge dramatically.
Such shocks have previously led to widespread load shedding and sharp increases in electricity costs, affecting millions of consumers.
Ember’s analysis frames this dependence as a structural economic burden.
Unlike capital investments, fossil fuel imports represent a recurring outflow of foreign currency, weakening the balance of payments and increasing fiscal pressure.
In Bangladesh, rising energy import costs are already straining public finances, with projections suggesting the annual import bill could increase by billions of dollars in the coming years.
The vulnerability is further amplified by global supply dynamics.
A significant portion of fossil fuel trade flows through geopolitical chokepoints such as the Strait of Hormuz, meaning regional conflicts can quickly disrupt supply chains for import-dependent countries like Bangladesh.
The report argues that such dependence has locked emerging economies into expensive and fragile energy systems.
In Bangladesh’s case, rising subsidy burdens, import bills and periodic supply shortages reflect the limits of a fossil-based model.
Against this backdrop, Ember highlights a structural shift in global energy systems, driven by falling costs of solar power, battery storage and other electric technologies.
These “electrotech” solutions are increasingly offering a viable alternative for developing economies.
Unlike fossil fuels, renewable energy sources do not require continuous import payments and are less exposed to global price shocks.
This makes them particularly attractive for countries facing foreign currency constraints and supply risks.
The analysis suggests that transitioning toward domestically generated renewable energy could help Bangladesh reduce its import dependence while improving long-term energy security.
Decentralized solar systems and battery storage, in particular, offer scalable solutions that can be deployed without the need for large, centralized infrastructure.
Methodologically, the study draws on data from the International Energy Agency, UN Comtrade and World Bank, alongside Ember’s own datasets.
It estimates that solar imports across CVF countries could generate substantial electricity, underscoring the untapped potential of alternative energy pathways.
However, significant challenges remain.
Bangladesh continues to invest heavily in LNG-based infrastructure, while financing constraints, grid limitations and policy inertia slow the pace of renewable expansion.
Ember concludes that Bangladesh faces a critical choice.
Continuing along a fossil-dependent path risks deepening exposure to global shocks and fiscal strain.
Accelerating diversification, on the other hand, could reduce vulnerability, stabilize costs and strengthen long-term resilience.
As global energy markets grow more volatile, the report suggests that the cost of delaying that transition is rising rapidly.