Regional energy integration suggested for huge cost savings

Kathmandu, Feb. 7

A recent study has concluded that an increased regional energy integration and trade could generate an average cost savings in the order of US$ 9 billion per year.

The research done by Economic Research Institute for ASEAN and East Asia (ERIA), has shown that the energy integration among Bangladesh, Bhutan, India, Nepal and Myanmar could address many challenges related to energy and trade with the cross-border energy trading.

“These countries have very limited cross border energy trade between them,” said the study.

It also said that with the capacity of enhanced cross-border power grid with NER-India, Nepal, Bhutan and Myanmar can reduce the risk of a serious seasonal supply gap for hydro power, and also realise the enormous potentiality for hydropower that contributes significantly to the region, which will become more prosperous economies.

Nepal is currently importing power from India to meet peak energy demand.

With enhanced hydropower investment and improved cross border connectivity, Nepal will become a net exporter of electricity by 2030.

Owing to a large amount of hydropower, total carbon emissions will be lower than 9 per cent than in the status quo, meeting the Paris Climate Agreement in a cost effective way, the study concluded.

“These five countries along with seven states of the North East India is characterised by rapidly growing energy demand, significant seasonal complementarities and large but unevenly distributed primary energy potential, mostly coming from hydropower,” read the report.

Electricity supply in the region has not yet kept pace with demand and is frequently interrupted.  In-efficient, costly and pollution intensive power sources also increased the transmission losses.

Effectively addressing these challenges require cross-border energy trading.

Meanwhile, a roundtable organised by ERIA-Confederation of Indian Industry with the support of Independent Power Producers of Nepal (IPPAN) in Kathmandu concluded that increased cross-border energy cooperation and cross border energy trade have multiple economic, social and environmental benefits.

The important first step can be to encourage specific cross border power projects between NER-India and Nepal based on the specific advantages involved, joint benefits and costs of generation capacities.

Experts also suggested Nepal to formulate its own economic strategy related to hydropower development and cross-border trade.

Published in The Rising Nepal daily 8 February 2020.