SARI/Energy Integration
South Asia Regional Initiatives for
Energy Integration (SARI/EI)
Supporting Cross Border Energy Trade
in South Asia
Shanker Khagi
USAID/Nepal
March 7, 2013
Kathmandu, Nepal
SARI/Energy
Good Reasons for Cross Border Energy
Trade
• Continued power
shortages hamper growth
prospects
• Regional
complementarity
• Seasonal Imbalances
• Daily Imbalances
• Strengthen economic
environments
• Provide for an improved
quality of life
• Energy security = Security
SARI/Energy Integration
Change
• Good reasons for change aren’t enough.
• There must be the political will for change.
• Political will reflects stakeholder
expectations…
– but also stakeholder concerns about the future
– and how best to meet the challenges of the future
• Concerns are generational
• Change is generational
SARI/Energy Integration
SARI/E Past
USAID’s South Asia Regional Initiative for Energy
(SARI/E)
– Launched in 2000
– Completed its 3rd Phase in 2012
– Having successfully helped position stakeholders for
the future
– Looking to leveraging its success in a 4th Phase
SARI/E Past
SARI/Energy Integration
B
M
REGIONAL
• SATURN Network formation and Induction of
POWERGRID as SATURN member
= Bilateraltrade
= Multi-lateraltrade
NEPAL
• Expert review of
Transmission Service
Agreements and Key Issues
PAKISTAN
• CASA 1000 Advisory Services
M
B
INDIA
• Bilateral Electricity links to Bangladesh,
Sri Lanka and Nepal
• Spread energyexchange models &
training
MALDIVES
• Maldives Submarine Cable
Interconnection Study
• Workshop on Advancing Low Carbon
Growth Through Regional Cooperation
and Cross-Border Energy Trade
.
..
B
B
BHUTAN
• Executive Exchange to
BhutanPower Corp.
BANGLADESH
• HVDC training at
PGCIL sub-station
• Senior Level
Exchange Program to
Indian Energy
Exchange , PTC and
CERC
SRI LANKA
• India-Sri Lanka Submarine Power
Transmission InterconnectionInterconnection Reliability and Stability
Studyfor CEB, Sri Lanka Wind power
development
• HVDC Hands-on training at PGCIL substation
SARI/Energy Integration
Findings of a Political Economy
Study 2012
1. There are 2 Distinct SubRegions in South Asia
i.
Eastern Sub-region
(Bangladesh + Bhutan +
India + Nepal + Sri Lanka)
ii. Western Sub-region
(Afghanistan + Pakistan)
and
2. The concept of a Regional
Energy Grid across South
Asia is being superseded
by a “Virtual Energy Grid”
West
East
SARI/Energy Integration
East
Sub-regions
West
• Strong interest in developing
energy markets
• No Markets … but represents
important vision for trade
• Indian market is economic
engine for Sub-Region
• Ongoing of conflict and
worsening political uncertainty
(instability)
• Growing number of
interconnections with India
• On track for “Virtual Energy
Grid”
• Several project opportunities –
high risk / high reward
SARI/Energy Integration
A Regional Energy Grid
• A “Regional Energy Grid” – a transmission
infrastructure linking the continental countries
of South Asia – has been a long sought but
unfulfilled objective.
• Existing, Developing, Prospective connections
between India and neighboring states:
– Are they the beginnings of the “Regional Energy
Grid”?
Cross Border Energy Trade
SARI/Energy Integration
We see three emerging interconnection
business models under development….
SARI/Energy Integration
Complexity
SARI/E Emphasis
Regional energy market
trade
3
Regional bilateral
trade via transit
Bilateral Trade
between
neighboring
countries
•
•
country
1
Smaller scope,
easier to develop
Can use power
market driven
model for
facilitatingtrade
through trader or
national energy
exchange
•
•
•
2
Bilateral trade
between nonneighboring
countries via
transit country
CASA 1000
Tajikistan and
Pakistan via
Afghanistan
•
South Asia Regional
Trade - between
neighboring or nonneighboring
countries via
regional grid
through regional
market
mechanisms,
Trade with Other
Regions - including
Central Asia, S.E.
Asia
Time
SARI/Energy Integration
Regional Energy Trading
• 2007 – Guidelines for power exchanges in India
• 2008 – Indian Energy Exchange – first ever power exchange in
India
• 2014 - With unification of India’s grids it will be possible for
energy transactions between any two points in India
• Subsequently - With connections to India, it will be also be
possible for energy transactions between any two points in
countries connected to India.
• Without the requirement of building extensive international
transmission networks, the Virtual Energy Grid can be used as
soon as bi-lateral connections with India are in place.
SARI/Energy Integration
Developing the Virtual Energy
Grid
• “Hardware” Interconnections: Technical challenges are
manageable but get most of sector’s attention
• “Software” is critical to enable interconnections to happen, and
needs more focused attention:
–Commercial trading arrangements
–Legal and Regulatory issues
–Media issues and public outreach
SARI/Energy Integration
Priorities
1.
Political consensus – legislation to permit cross border energy trade
2.
Encouraging Public-Private Partnerships for cross border energy projects
3.
Completing the interconnections between India and its neighboring countries
4.
Harmonizing laws governing commercial energy trade among the countries
5.
Establishing independent regulatory regimes in each South Asian country and
harmonizing regulations governing cross border energy trade
6.
Functionally restructuring the energy utility sector in each country.
7.
Ensuring that retail energy tariffs are cost reflective in each of the countries.
SARI/Energy Integration
SARI/EI Forward
• Project Steering Committee formed – meeting
on March 12
• Task Forces to be formed on
– Policy, Legal, Regulatory
– Generation & Transmission Infrastructure Planning
– Energy Trading/Exchanges and markets
• Coordinating with Supporting Institutions like
SAARC, MDBs
• Promoting Public-Private Partnerships
Thank You!
SARI/Energy
34