Regional Energy Cooperation in
Eastern South Asia
Nitya Nanda
The Energy & Resources Institute (TERI)
Eastern South Asia – A Perspective
• It housed one of two most important industrial/growth
centres in India (South Asia)
• Was an industrially developed sub-region
• Most important sub-region in terms of contribution to exports
• Due to accident of history, a metropolitan centre lost its
hinterland and the hinterland lost its metropolitan centre
• Artificial barriers created
• Existing transport linkages dismantled (was in operation till
1965)
• Existing forward and backward linkages disrupted
• Decline of the export-oriented commodity-based industries in
general
Per Capita Income in Eastern South Asia
(US$)
South Asian Countries
Maldives
7700
Pakistan
1201
Sri Lanka
2816
India
1516
Bangladesh
822
Bhutan
2509
Nepal
656
Myanmar
1126
Indian States
Arunachal
1272
Assam
689
Bihar
464
Jharkhand
711
Manipur
595
Meghalaya
986
Mizoram
995
Nagaland
976
Sikkim
2338
Tripura
902
West Bengal
1030
Integration of Bangladesh with …
Indian states, Nepal, Bhutan, Myanmar
• It is likely that Bangladesh-India low volume of exports is
more reflected in terms of Bangladesh and Eastern and
North-eastern states of India these states have limited
purchasing power
• Prosperity of Bangladesh, Myanmar, Nepal, Bhutan and the
Indian east and north-eastern states are inter-linked
• Eastern South Asia is among the most fragmented subregion and also among the poorest sub-region – a creation
of history!
• Integration of these countries/states will bring prosperity to
all countries/states
• Energy sector is an important area for cooperation and can
become the driver à la EU
The Eastern South Asian Context
• Among the lowest per capita incomes in the world
• per capita energy consumption is also among the lowest in
the world
• poorly endowed with conventional energy sources
• Huge energy gap and energy poverty
• Energy demand likely to grow by three times in the next two
decades
• Given this context, energy governance both at national and
regional levels is extremely important
• “Sustainable energy for all” has been identified as one of
the SDGs
6
Key Energy Indicators in Eastern South Asia
Country/Region
South Asia
OECD
World
Africa
Bangladesh
Bhutan
India
Nepal
TPES/Pop
TPES/GDP
(toe/capita) (toe/thous
2000USD)
TPES/GDP
(PPP)
(toe/thous
2000USD)
Elect Cons
0.55
4.28
1.88
0.67
0.21
0.87 (0.62)
0.60
0.34
0.17
0.14
0.19
0.25
0.13
0.08
0.19
0.23
580
8226
2933
592
263
1619
673
178
0.55
0.14
0.25
0.55
0.36
0.30
0.57
1.34
(KWh/capita)
Energy Resources in Eastern South Asia
Resources/Country
Bangladesh
Bhutan
India
Nepal
Coal (Million MT)
Lignite (Million MT)
Petroleum (Million MT)
Natural Gas (Billion
Cubic Metre)
Hydropower Potential
(GW/year)
Hydro Generation
(GW/Year)
Solar (GW Capacity)
Wind (GW Capacity)
293
--3
344
---------
56100
4500
740
1074
--1
--0
4000
263000
2638000 733000
1300
7134
114827
2759
-----
-----
657
49
--3
Existing Energy Trade in the Region
India-Bhutan-NepalBangladesh (Power)
Bhutan is the only country in the region
with surplus power generation and
exports large part of it to India. Nepal
imports power from India in a limited
quantity. Bangladesh has also started
importing from India recently
India-Nepal,
Bhutan, While Nepal and Bhutan are entirely
Bangladesh,
(petroleum dependent on India for petroleum
products, Bangladesh also imports from
products)
India
India- Bangladesh (Coal)
Bangladesh imports from India
Natural Gas
Bangladesh consumes it but only from
domestic production (No export or
import), India produces and imports as
well. Nepal and Bhutan do not consume
Any Trade in Natural Gas?
• Except India nobody engages in NG trade as there is no
infrastructure
• Major international gas pipeline plans: IPI, TAPI, MBI –
India was most keen on MBI but could not make any
progress due to bilateral differences
• Will a regional approach help? What about Nepal and
Bhutan’s needs for natural gas?
• Bangladesh has internal network of pipelines but it is not
connected to any other country
• Eastern part of India including the north-eastern states and
Nepal and Bhutan are not linked
India and Bangladesh: Gas Pipelines
Bilateral : Bhutan-India
• India-Bhutan: A success story – Significant impact on
Bhutan’s GDP, Export, Revenue and Human Development –
• Chukha Hydropower Plant started in 1978 and fully
commissioned in 1988
• Hydropower projects in Bhutan were built mainly with
Indian financial assistance with a significant grant
component and technical assistance as well
• Bhutan has plans to increase up to 10000MW with Indian
guarantee of purchase of half of it
• Can it be replicated? Will India fund projects in other countries with
similar terms? If yes, how much
• So far Bhutan story is more about political and diplomatic
success (not market based)
Hydro Projects to be completed by 2020
India-Bhutan Interconnection
Bilateral : India-Nepal
• India-Nepal: Existing linkage is minimal. Several projects are in
pipelines. Not much progress
• Long history of cooperation (?) – some unfulfilled expectations – once Nepal
was keen but India was not, then India changed its position but situation
changed in Nepal
• Political differences/opposition from CSOs
• Private companies (Sutlej/GMR) are interested but govt. is slow
• Stiff opposition in Nepal due to potential environmental and social
implications
• Cost of non-cooperation in Nepal
• Severe power shortage – lowest energy access in South Asia
• Import of electricity, diesel, kerosene and BoP issues/indebtedness
• Excessive use of diesel and kerosene and the related environmental/social
implications
• Excessive use of woods – social and environmental implications including
massive deforestation, soil erosion and land degradation
• Does Bhutan care less about the social and environmental issues?
• Bhutan is carbon neutral country
• Protection forests
• Significant improvement in health and education indicators
India-Nepal Interconnection
Bilateral :Bangladesh-India
• India-Bangladesh: 250MW of electricity is flowing through
Berhampore-Bheramara transmission line
• Price agreed is not market based, but more electricity would
be accessed by Bangladesh from Indian market
• Bagerhat JV on coal-based power generation
• India has agreed in principle for power transmission from
Nepal and Bhutan through Indian territory – Nepal has no
electricity to offer
• Bhutan can offer from additional capacity created –
transmission link needed
• Indian north-east to Bangladesh power flow potentially
possible
Bangladesh-India Interconnection
Myanmar-Bangladesh-India Gas
Corridor – A missed opportunity!
• Natural gas is the main export item of Myanmar and it was keen to
sell it to India
• India was not able to seize the opportunity
• India proposed MBI pipelines but Bangladesh agreed (2005) but
demanded three things in return
• Duty free access
• Better transit facilities to Nepal and Bhutan
• Access to power from Nepal and Bhutan
• India did not agree to discuss these issues together though they
energy minister was keen – today India has agreed to all!!! But no
pipelines in place
• Bangladesh also faces severe shortage of gas (Recognised by 2007)
• Bangladesh could have asked for a share of gas instead of bargaining
hard linking other issues
Energy Cooperation in SE Asia (1/2)
• 1st Phase of energy cooperation: Mid-1970s to Mid-1980s Focus on oil and power grid cooperation
• ASEAN Council for Petroleum (ASCOPE) in 1976 – active
collaboration and mutual assistance in the development of
petroleum resources
• ASEAN Petroleum Security Agreement (APSA) – mutual supply of
oil six countries in sudden shortfalls in supplies – ASEAN had a
different context
• Power grid cooperation started outside what was then ASEAN
• Beginning was made in 1966 when Thailand and Laos concluded a
power exchange agreement (Similar to Bhutan-India cooperation)
• Similar agreements were signed between Thailand-Malaysia and
Malaysia-Singapore in 1978
• ASEAN level cooperation started in 1981
Energy Cooperation in SE Asia (2/2)
• 2nd Phase of energy cooperation: Mid 1980s onwards –
Cooperation became comprehensive to promote four A’s of
energy security:
• Availability, Accessibility, Affordability, Acceptability
• ASEAN Energy Cooperation Agreement (1986)
• 1991: Programme of Action for Enhancement of Cooperation in
Energy (PAECE)
• 1995: Plan of Action on Energy Cooperation (PAEC 1995-1999)
• Oil and gas, coal, new and renewable sources, energy efficiency
and conservation with coordination bodies for each of the five
areas
• 1997: ASEAN Vision 2020
• ASEAN-wide Interconnection arrangement for electricity, natural
gas and water
ASEAN Power Grid
ASEAN Natural Gas Pipelines
Southern African Power Pool (1995)
• Geared at increasing cross-border electricity trade and ensuring
secure and reliable supply to its members with the objectives:
• To provide a forum for the development of a world class, robust, safe,
efficient, reliable and stable interconnected electrical system in the
southern African region
• Coordinate and enforce common regional standards of quality of
supply, measurement and monitoring of systems performance
• Facilitate the development of regional expertise through training
programmes and research
• Increase power accessibility in rural communities (not achieved).
• Implement strategies in support of sustainable development priorities
(53% coal, 17% gas and 27% hydro and 3% other renewables)
• Few countries engage in trade, trading arrangements are bilateral
and prices and quantities are negotiated as DAM not deep
• Huge experience and capacity gap – SA (80% capacity and 78%
consumption) – Just like South Asia!
South African Power Pool Map
SAPP Statistics 2012-13
Energy Governance at National Level
• Market development is incomplete in national level
• Energy governance entails balancing between energy security
and other socio-economic and environmental concerns –
reaching consensus is difficult
• In most countries, electricity and other energy products and
services are subsidized
• In India, there is significant power trading, and to that extent,
price is market-based in the wholesale market
• In the absence of reference price international trade in
electricty becomes difficult - Bangladesh perceived Indian
offer price to be too high!!
• In future, neighbouring countries can participate in Indian
market with competitive terms (no need to negotiate price)
Regional Governance- Some Pointers
• Some complexity – even Nepal wants electricity from
Bhutan, Bangladesh wants from Nepal and Bhutan and
opposes Indian project in Tipaimukh
• Offer of electricity to Bangladesh can change the
equations on transit of gas and goods
• India has agreed in principle for transit of electricity
• India’s achievements in Renewable energy (solar, wind
and biomass) – India can provide technology and finance?
• India’s quest for energy cooperation with SEA countries
through BIMSTEC and ASEAN-India cooperation
framework
Regional Cooperation: Ways forward

Regional energy cooperation can have two broad purposes:



Following are the usual modes of engagement:






Guaranteeing security of energy supply
Minimizing the environmental impacts of energy production, transport
and consumption
Trade in Energy Commodities
Natural Gas pipelines
Renewable Energy
Investment Flows in Energy Sector (including energy infrastructure)
A number of measures can be taken, including infrastructure
development, financial mechanisms, regulatory frameworks,
R&D, information sharing and capacity building
Experience of ASEAN shows bilateral initiatives can be the
building blocks of regional cooperation
Thank You