In this study, we critically evaluate Bangladesh’s energy forecasting framework, pinpointing gaps in the Integrated Energy and Power Master Plan (IEPMP) and introducing an advanced econometric approach through the Vector Error Correction Model (VECM). By integrating environmental considerations with economic and demographic factors, we propose a multidimensional framework that not only addresses current energy challenges but also anticipates future shifts in consumption patterns. This approach paves the way for a holistic energy strategy that balances growth with sustainability. Our analysis uncovers a more realistic energy consumption trajectory up to 2050, significantly diverging from the IEPMP’s projections which anticipate 3.75 times increase by 2050. In stark contrast, our scenarios forecast a more tempered growth, ranging from 1.7 to 2.36 times. Similarly, for 2041, where IEPMP envisions a 2.6 times growth, our models suggest a more modest increase between 1.51 to 1.88 times. By 2030, against IEPMP’s projection of 1.68 times, our findings present a range from 1.24 to 1.37 times. This utter discrepancy underscores the need for methodological refinement and policy recalibration, and adjustment of renewable energy targets, ensuring future energy strategies are both sustainable and aligned with empirical evidence.
Authors: Khondaker Golam Moazzem and Faisal Quaiyyum
Publication Period: April 2024