Recent context: The government has set up a high-level group headed by former Union power secretary and tasked it with helping build a South Asia-focused energy security architecture and also the India-Nepal petroleum products pipeline and the India-Bhutan joint venture hydroelectric project have revived conversations on energy cooperation in the region.
South Asia energy situation
- In terms of energy supply, the countries in the region are endowed with coal reserves, renewable energy, and hydropower resources.
- While they also have oil and natural gas reserves, the demand for these resources exceeds the indigenous supply. Regional countries are thus heavily dependent on imports for energy security.
- Electricity production in South Asia has increased rapidly. However, around 20% of the region’s total population is still without electricity access, and around 35% is without clean cooking access. However, the entire region is suffering from an acute energy crisis.
Some major concerns with regard to the energy sector
- Securing energy to sustain rapid economic growth and meeting the rising aspirations of the people.
- The region is home to a huge population that lacks access to clean forms of energy.
- With limited domestic energy sources, most South Asian countries are also highly dependent on energy imports, particularly crude oil, from other regions.
- Regional water supplies could be threatened by the rapid retreat of thousands of glaciers in the Hindu-Kush Himalayas
- Extreme weather events such as heat waves from rising temperatures will increase the cooling demand.
Energy diplomacy in the south Asian region
- The mismatch between energy demand and resource endowments in individual countries builds a strong case for energy cooperation.
- India’s energy diplomacy ranges from cross-border electricity trade to supplying petroleum products and setting up liquefied natural gas terminals.
- Cross-border energy trade is a key part of the neighborhood-first policy, with plans to build energy links to check China’s growing influence.
India’s neighborhood energy trade & cooperation
Energy cooperation in South Asia has occurred at the bilateral as well as regional level. But bilateral energy cooperation has been more successful, particularly between India and Bhutan.
- India has been procuring hydropower from Bhutan. Bhutan exports about 1,000-1,200 megawatts (MW) surplus power to India.
- India has provided technical and financial assistance to Bhutan in the development of hydropower and that form of energy is Bhutan’s main export to India.
Bangladesh and Nepal
- India is supplying electricity to Bangladesh and Nepal.
- Recently, India and Bangladesh have signed a memorandum of understanding (MoU) under which 100 MW power will be exported to Bangladesh.
- India and Nepal also have engaged in significant energy cooperation. Four hydroelectric schemes with an aggregated installed capacity of about 50 MW have been implemented in Nepal with assistance from India.
- The two countries have also signed an agreement worth US$ 1.04 billion under which a 900 MW plant will be built on the Arun River.
- However, tensions between Nepal and India endanger the possibility of greater energy cooperation between them.
- Further, India has emerged as a significant source of refined petroleum for the region. India currently supplies the entire demand for petroleum products in Nepal and Bhutan. India also exports petroleum products to Bangladesh.
- the Turkmenistan-Afghanistan-Pakistan-India (TAPI) Pipeline, the Myanmar-Bangladesh-India (MBI) Pipeline, and the Bhutan-Bangladesh-India-Nepal (BBIN) for energy cooperation,
Turkmenistan-Afghanistan-Pakistan-India (TAPI) gas pipeline
- It is a proposed trans-country natural gas pipeline developed by the Asian Development Bank (ADB).
- The pipeline first proposed in 1995 will transport natural gas from energy rich Caspian Sea (Galkynysh gasfields: fourth largest in the world) in Turkmenistan to India through Afghanistan into Pakistan
- The project will supply natural gas to India, Afghanistan and Pakistan.
- It will enhance economic engagement through regional connectivity by economically integrating region stretching from the Bay of Bengal to the Caspian Sea.
- It will not just be a commercial project, but also help in providing peace and security in the region.
- TAPI Project will provide an alternative supply source of gas with dependable reserves leading to enhanced energy security.
It will further diversify energy sources of Indian economy. it would be used mainly in power, fertilizer and city gas sectors.
Myanmar-Bangladesh-India (MBI) Pipeline
As part of Hydrocarbon Vision 2030 for north-eastern region, 6,900 km pipelines would be laid connecting Sitwe (Myanmar), Chittagong (Bangladesh), most north-eastern states, Siliguri and Durgapur.
The Hydrocarbon Vision 2030 envisions doubling the production of oil and natural gas in the north-east and promoting trade in the region and the neighbouring Saarc countries.
Joint venture company will be established that will construct and operate the pipeline.
Thirteen routes with a total length of about 6,900 km of pipelines have been proposed for the purpose.
Measures to improve energy security in the region
- The high-level group, named the South Asia Group for Energy (SAGE), has been set up under the Ministry of External Affairs (MEA)-run think tank Research and Information System for Developing Countries (RIS) for promoting, initiating and facilitating effective policy dialogue and capacity building on bilateral, sub-regional and regional basis for energy and related issues, among South Asian countries. It will also ensure climate change concerns.
- India is also moving ahead with its ambitious global electricity grid plan to roll out a “One Sun, One World, One Grid” (OSOWOG) to take on China’s Belt and Road Initiative.
- India has already notified cross-border trading regulations.
- The proposed energy market, which will include Myanmar, Sri Lanka, Nepal, Bhutan and Bangladesh, could aid regional peace and improve utilization of generation assets—including the stranded assets in India—and efficient price discovery.
- India is trying to create a common pool for neighbouring countries and has an installed power generation capacity of 373.43 giga-watts.
- There is a plan to build an overhead electricity link with Sri Lanka.
Global grid plan has been spread across three phases.
- The first phase deals with the Middle East-South Asia-South-East Asia (MESASEA) interconnection for sharing green energy sources such as solar for meeting electricity needs, including peak demand.
- The second phase connects MESASEA grid with African power pools;
- The third and final phase is about global interconnection.
Pitfalls in our energy cooperation structure
- Regional energy cooperation efforts began in 2005 when the SAARC energy centre was created. However, regional energy cooperation efforts have been less successful because of the overarching political differences between the SAARC member countries.
- The signing of the SAARC energy agreement provides a ray of hope but continuing tensions, particularly between India and Pakistan, cast a spell of doubt with regard to its implementation.
- Mobilizing financial resources to develop the necessary energy infrastructure is a major challenge to enhance energy security in the region.
- Due to the volatile nature of South Asian politics, the private sectors are reluctant to invest in mega projects without the necessary legal regimes to protect investments.
- The state-centered approach towards energy security that is based on government-to-government interactions and the use of public sector enterprises is one of the major defects of energy cooperation efforts in the South Asian region.
- The regional cooperation efforts So far gave overemphasis on facilitating electricity trade and pipeline projects in the region have paid limited attention towards the potential of renewable energy.
- South Asian leaders need to look at energy cooperation as a means of achieving peace in the region.
- South Asian countries need to develop policies that will attract investment in the region. The private sector can play an important role in this regard.
- It is important to recognize that in South Asia, the issue of energy security goes well beyond the macro concerns to the challenge of providing the poorer sections of society with access to clean energy.
- The scope of energy cooperation in South Asia must be widened and greater emphasis must be laid on renewable energy sources such as solar and wind.
- India’s advantage in solar energy needs to be exploited effectively. Indian institutions are already engaged in providing solar-powered lighting, water and space heating, and water pumping in countries such as Afghanistan and Pakistan. These initiatives need to be scaled up to meet the development needs in the region.