Saturday, June 15, 2024

Prospect of Renewable Energy Transition in Bangladesh’s RMG Industry

In Bangladesh, the Readymade Garment (RMG) industry stands as the backbone of the nation’s economy, driving over 80 per cent of its foreign export revenue. However, the recent global energy crisis, spurred by the Ukraine War, has cast a shadow over this vital sector. The Government of Bangladesh’s response to the crisis, marked by escalating electricity tariffs, has intensified production costs for industries, imperiling their sustainability.

Recognising this situation, this study delves into the feasibility of integrating Renewable Energy (RE) sources into Bangladesh’s RMG industry. This paper underscores the pivotal role of RE in bridging the energy demand gap, crucial for sustaining industrial production. While significant strides have been made, with some RMG firms embracing solar systems, scalability remains a challenge. However, innovative solutions like the Virtual Power Purchase Agreement (VPPA) hold promise in accelerating the transition to green energy.

Yet, the journey towards sustainable energy practices demands a collaborative effort. It necessitates a comprehensive approach involving stakeholders ranging from industry associations and governmental bodies to development partners. With an estimated investment of USD 450 million, the vision of powering at least 10 per cent of RMG electricity demand through RE sources represents a pathway to a greener, more sustainable future.

Authors: Fahmida Khatun and Estiaque Bari
Publication Period: May 2024

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