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Sub-regional energy cooperation is the need of the hour

Sunil KC

Sunil KC

Sub-regional energy cooperation is the need of the hour

Nepal plans to propose the construction of additional two cross-border transmission lines with India while the country will discuss the investment modality of the first Nepal-China cross-border transmission line with the Chinese official

Today, all countries face common challenges like the effects of climate change, pandemics, energy dependency, economic crisis, etc. In that case, no country, no matter how big it is, can address these challenges without the support and cooperation from other countries. And, most importantly, many of these issues have cross-border implications. In the context of South Asia, it is more evident due to the open border and a seamless movement of people from one country to another. Compared to other regions, South Asia faces even more daunting challenges but it is one of the least integrated regions in the world. The Covid-19 crisis has shown us that a crisis in one country can easily spill over to another country.

So, there is a need for global and regional collaboration to address those issues without delay. Here, regional organizations can play a vital challenge to take a lead to address those issues.

In South Asia, we have some regional organizations but they are ineffective, by and large.  We have no alternative than reviving those bodies to bring all countries to address those issues. Time has come to revive regional organizations such as Bangladesh, Bhutan, India and Nepal (BBIN), a sub-regional organization under SAARC, which has gathered some momentum in recent years.  Though SAARC is almost paralyzed, BBIN still remains vibrant. Another regional organization BIMSTEC, which links South Asia with Southeast Asia, is making some progress when it comes to enhancing grid connectivity among member states. Of late, India seems active to go ahead with BIMSTEC, so we should seize upon this opportunity.

All three nations of this subregion save Bhutan are facing an energy crisis. The crisis will undoubtedly deepen if the generation of green energy today fails to manage power generation, transmission and distribution—both for industrial and domestic use. We all know that hydropower is the best source of energy, followed by solar power, more than any other fossil based energy from both—cost effectiveness and environmental safety. Therefore, green energy would play a key role in establishing a resilient south Asia.

When to go for regional integration? How to go for regional integration and who will take the initiative? To go for a robust regional integration, the region first needs a forum. There are successful examples like the EU and ASEAN. How to go ahead with regional integration? Can bilateralism become a way forward to regionalism? Or do we need another new forum?

We should focus on some low-hanging fruits as a confidence-building measure.

BBIN-sub-regional energy integration, by having new transmission lines between India and Bangladesh, can facilitate energy trade between Nepal, India, Bangladesh and Bhutan. In August 2022, both Nepal and Bangladesh requested India to facilitate Nepal-Bangladesh energy cooperation by allowing Nepal to export 50 MW of electricity to Bangladesh by using existing transmission lines between India and Bangladesh.

Following are the current India-Bangladesh transmission lines: Baharampur (India)-Bheramara (Bangladesh) 400kV D/C lines along with 2×500 MW HVDC back-to-back terminal at Bheramara; Surajmaninagar (Tripura) in India to Comilla (Bangladesh) 400kV (operated at 132kV); Katihar (India)-Parbotipur (Bangladesh) and Bornagar (India) 765kV double circuit (proposed).

These have the following benefits.

The energy trade is already happening bilaterally in the region. Nepal needs to sell surplus energy to new markets like Bangladesh, Myanmar, and possibly to Sri Lanka by 2030. Bangladesh needs energy for its industries.  Both India and Bangladesh want to increase the share of renewable energy substantially in the upcoming years. The Indian government has set an ambitious plan to generate 500GW from non-fossil energy-based sources by 2030, meeting 50 percent of energy requirements from renewables.

Bangladesh wants to increase the share of renewable energy in the country’s power mix to around 40 percent by 2050 from less than three percent now. Water-rich Nepal could help both countries achieve their dreams, according to officials. Bangladesh has hence been exploring Nepal’s hydropower to meet its renewable energy targets.  India can earn foreign currency by facilitating this trade and it will be a  major diplomatic victory for India.

Like the other tradeable items, standardization is not required in the case of hydropower energy. This will attract more investments into the region in the green energy sector. There is already a robust trade infrastructure in the region for bilateral trade and regional trade. Adoption of the Motor Vehicle Agreement under the BBIN framework would improve cross-border trade substantially. India needs to send a message to its regional partners/neighbors that it is keen on multilateralism or regionalism by bringing changes in existing hydro-energy export/import guidelines that were issued in 2018 and 2021, which encourage bilateral energy trade.

In the recent years, there has been positive development to set up mechanisms for the regional power-trade, which needs to be taken further. Nepal should also play an effective role to convince other countries to speed up the energy trade process. At the same time, we need to take immediate measures to revive regional organizations.

The author is Chief Executive at Asian Institute of Diplomacy and International Affairs (AIDIA)

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