Bangladesh’s electricity sector is likely to face mounting pressure from higher fuel costs and supply disruptions as global electricity demand continues to rise, according to the International Energy Agency (IEA), which has identified Bangladesh among the LNG-importing countries most exposed to recent market volatility.
In its latest Electricity Mid-Year Update, published on Thursday, the Paris-based agency said global electricity demand is expected to grow by 3.6% in 2026 and a further 3.8% in 2027, driven by expanding industrial activity, electric vehicles, air conditioning, household appliances and the rapid growth of data centres.
The report warned that Bangladesh and Pakistan are among the most price-sensitive LNG-importing economies where higher fuel costs and supply disruptions are already weighing on electricity consumption.
The IEA said disruptions to liquefied natural gas (LNG) shipments through the Strait of Hormuz have pushed natural gas prices in Asia and Europe to their highest levels since the 2022-23 energy crisis, increasing electricity generation costs and forcing several countries to adopt emergency energy-saving measures.
Although additional LNG supplies, particularly from North America, have helped ease pressure on global markets, elevated gas prices have prompted a shift towards coal-fired power generation in several Asian countries. At the same time, rapidly growing renewable energy capacity has strengthened electricity security in many markets by reducing reliance on imported fossil fuels.
For Bangladesh, which relies heavily on imported LNG to supplement domestic natural gas production, sustained high international fuel prices could further increase power generation costs and place additional pressure on energy subsidies.
The IEA projects global electricity consumption to reach 30,700 terawatt-hours (TWh) by 2027, up from 28,600 TWh in 2025. Demand growth will remain particularly strong in China and India, where industrial expansion, manufacturing and electric vehicle charging continue to drive higher electricity use.
Meanwhile, renewable energy is expected to become the world’s largest source of electricity generation in 2026, overtaking coal. Its share of global electricity generation is forecast to increase from 33% in 2025 to 37% by 2027.
Solar photovoltaic (PV) generation will continue to lead global capacity growth, with annual output expected to increase by around 600 TWh in 2026, matching the record expansion achieved in 2025.
The report also cautioned that weather conditions could significantly affect electricity demand and supply. A stronger-than-expected El Niño event in 2026 could increase electricity demand for cooling while reducing hydropower and wind generation in several regions, increasing dependence on thermal power generation.
Global carbon dioxide emissions from the power sector are forecast to rise by around 1% in 2026 before stabilising in 2027 as expanding renewable and nuclear generation offsets increased coal use caused by higher natural gas prices.
The IEA also noted that growing renewable electricity generation is increasing the need for greater system flexibility, including battery storage and demand-response technologies, as more electricity markets experience wider price fluctuations and periods of negative wholesale electricity prices.