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South Asian regional cooperation could help nations meet energy needs: Shringla
New Delhi, March 10, 2021
South Asian regional cooperation could lead to a mutually beneficial model among the nations in meeting energy needs, especially by utilising renewable sources, according to Foreign Secretary Harsh Vardhan Shringla.
Speaking at the inauguration of the South Asia Group on Energy (SAGE) here on Wednesday, Shringla said energy cooperation had the potential to be a key pillar in regional cooperation and integration.
The conference, organised by the Research and Information System for Developing Countries (RIS), was a "timely and useful initiative", he added.
“The role of energy in the development matrix is well known. Our region, in particular, requires enormous amounts of energy if we are to make an accelerated transition to a developed region. Yet, we need to be cognizant of the challenges posed by climate change,” Shringla said.
“Against this backdrop, we are working assiduously to promote the sub-region comprising Bhutan, Bangladesh, Nepal, Myanmar and India as an energy hub. I should also add Sri Lanka to make it a full regional integration. Be it conventional sources, hydropower, solar, wind or even petroleum products, India is taking the lead to promote a regional approach to our energy needs.
“Being the largest producer and consumer of energy in the region, it is natural for us to be the epicentre for any energy initiative in the region. We have to make energy affordable, accessible and clean,” he noted.
He said India’s neighbourhood first policy was visible in action on the ground. Regional and sub-regional energy integration is a manifestation of Prime Minister Narendra Modi’s "Sabka Saath, Sabka Vikas, Sabka Vishwas" vision being extended to the neighbourhood.
India was promoting an easier movement of hydrocarbons across the region. South Asia’s first cross-border petroleum products pipeline from Motihari to Amlekhgunj in Nepal was remotely inaugurated by the two Prime Ministers in September 2019. This has since led to savings of INR 1 billion for Nepal Oil Corporation.
“We are now looking to expand this project to Chitwan, and also construct a new pipeline connecting Siliguri and Jhapa in Nepal,” he added.
“Energy connectivity is one of the most dynamic sectors of cooperation in our relationship with Bangladesh. Our cooperation in the hydrocarbons sector is diversifying into the entire value chain of oil & gas sector. The bilateral hydrocarbon trade was USD 337.3 million in 2019-20 (USD 322.32 million from April-November 2020).
“We are constructing the India-Bangladesh Friendship Pipeline from Siliguri to Parbatipur in Bangladesh for the supply of high-speed diesel. Our PSUs (OVL & OIL) have invested nearly US$ 24.26 million in two shallow-water blocks (SS04 & SS09) in Bangladesh. Prime Ministers of India and Bangladesh jointly inaugurated the project to import Bulk LPG from Bangladesh in October 2019.
“This project increases bilateral trade and ensures a sustained and affordable supply of LPG to the North-Eastern region of India, which is supplied from Chattogram by Bangladesh trucks to Tripura. Indian Oil Corporation Limited (IOCL) is currently undertaking several activities in Bangladesh in coordination with Bangladesh Petroleum Corporation (BPC) and Bangladesh Oil, Gas & Mineral Corporation (Petrobangla),” he said.
A joint venture has been formed between IOCL and Beximco (The Bangladesh Export Import Company Limited) in June 2020 to further expand its downstream business in Bangladesh and other countries. A proposal for supplying R-LNG through cross-border pipeline and establishment of an LNG terminal were also being explored.
“With Myanmar, we enjoy a robust and expanding partnership in the area of energy cooperation. Myanmar is potentially an important partner in the energy sector as future offshore gas finds can be piped to India. With investments of over US$1.2 billion, Myanmar has the highest Indian investment in any country in South East Asia in this sector. The institutional mechanism for cooperation is the JWG on Oil and Gas headed at the Secretary level.
"The bilateral cooperation received further boost during the visit of the President of Myanmar to India in February 2020 when both sides signed an MOU for Cooperation in the Field of Petroleum Products which promote cooperation in refining, stockpiling, blending and retail, among other areas.
"Indian PSUs, ONGC Videsh Limited (OVL), Indian Oil Corporation Limited (IOCL) and GAIL were active in the upstream and midstream sector in the oil and gas sphere in Myanmar. IGL & GAIL Consortium has participated in Expression of Interest for natural gas supply and distribution to the New Yangon Development Company Ltd. in respect of the New Yangon City project. Indian private sector players are also active in Myanmar. Both countries are exploring cooperation in the renewable energy sector. Myanmar has also recently ratified the amendment to the Framework Agreement of the International Solar Alliance (ISA).
“With Sri Lanka, we have been pursuing several projects in the energy sector, such as the establishment of an LNG-based power plant at Kerawalapitiya in Sri Lanka with an initial capacity of 300 MW. There is strong potential for collaboration in harnessing wind energy in Mannar region.
“India has also offered a US$ 100 million Line of Credit for the development of solar power projects, which will help massively scale-up solar power production and deployment in Sri Lanka Our proposed cooperation with Sri Lanka on the development of the Oil Tank Farm in Trincomalee is a mutually beneficial proposition that promises to assist Sri Lanka in building petroleum reserves and address supply and price volatility,” Shringla said.
“I would like to add that energy is one of the key areas of cooperation identified under the BIMSTEC framework. An MoU on the establishment of BIMSTEC Grid Interconnection was signed during the 4th BIMSTEC Summit held in August 2018 and came into force in April 2019. A BIMSTEC Energy Centre is currently being set up in Bengaluru with financial support from India.
“The SAARC Framework Agreement on Energy Cooperation in Electricity was signed at the 18th SAARC Summit in November 2014 in Kathmandu. In the absence of ratification by Pakistan, the Agreement is yet to come into force. Separately, India had also proposed to undertake a project for electrification of one village in each of the SAARC Countries using solar energy,” he added.
The Foreign Secretary noted that the primary focus of India’s regional energy cooperation was on electricity where it has met with notable success. “With Bangladesh, 1160 MW of power is currently supplied by India through the two existing interconnections. We are in discussion regarding the construction of a 765kV power interconnection through Katihar in India via Parbotipur in Bangladesh to Borknagar in India, which when constructed, will reinforce the interconnection of grids in the region.
“Through concessional credit, we are assisting Bangladesh in the construction of transmission lines as well as power evacuation facilities from the upcoming Rooppur Nuclear Plant in Bangladesh. We are constructing the 1320 MW Maitree Super Thermal Power Project at Rampal in Bangladesh, with Unit 1 to be commissioned in November 2021 and Unit 2 in March 2022.
“Separately, Adani Power Ltd signed an MoU with Bangladesh Power Development Board in November 2017 for the supply of power to Bangladesh from a 1600 MW coal-based plant which is being constructed in Godda, Jharkhand. L&T have commissioned 225 MW at Sikalbaha (near Chittagong), and the 360 MW project at Bheramara (Kushtia District, Khulna Division), reiterating the growth and potential of this area.
“Our efforts are thus, directed towards investment and creation of capacity as well as infrastructure towards strengthening subregional cooperation power and energy connectivity,” he added.
Bhutan is estimated to have a hydropower potential of 30 GW, around 1.8 GW of hydropower is imported from Bhutan annually. The 720 MW Mangdechu Project was inaugurated during the visit of Modi to Bhutan in 2019, taking the total installed capacity of hydropower projects developed with Indian assistance to over 2100 MW. The Punatsangchhu-I and II projects, as well as the 600 MW Kholongchhu project, are currently under implementation.
“With Nepal, we supplied about 700 MW of power in 2019 through more than 25 transmission interconnections, though Nepal may also start exporting power in the near future. The first high capacity cross-border power transmission line, from Dhalkebar in Nepal to Muzaffarpur in India was completed with the Union Government’s assistance and was upgraded to 400 KV capacity in November 2020. More cross-border high-capacity connections are envisaged. I
“In the generation sector, Satluj Jal Vidyut Nigam Limited is developing the 900 MW Arun-III hydroelectric project in northeast Nepal. Recently, the Lower Arun project was awarded to SJVNL. A consortium led by GMR is developing the 900 MW Upper Karnali hydroelectric project in western Nepal. Upper Karnali is an export-oriented project, where power is to be supplied to India and Bangladesh. Private sector participation in the hydropower sector holds enormous promise.
"With Myanmar, an MoU on power cooperation was signed between both countries in 2017. Currently, India is supplying 3 MW power through Moreh - Tamu Low Voltage Interconnection to Myanmar. Discussions have taken place for further such low voltage radial electricity supply to Myanmar is under consideration. Discussions have also happened on High-capacity voltage grid interconnection between India and Myanmar," he said.
Shringlu noted that REC Transmission Projects Company Limited had offered a proposal for rural electrification of Myanmar. “We are considering more ways to enhance the electricity supply to Myanmar. As per estimates, the power requirement is slated to rise from the 3700 MW presently to 12,200 MW in 2030. We need to be ready to tap into this transformation. With Sri Lanka, both sides have discussed the possibility of the interconnection of grids and a joint Technical Team had also carried out a study on this matter.
“There has been a renewed emphasis on clean energy, both in terms of technological advances and in large-scale adoption and deployment. You are all aware of the Prime Minister’s focus on solar energy. He has spoken about 'One Sun, One World, One Grid' to leverage solar energy.
“India has done exemplary work in the renewable energy sector and has played an instrumental role in the formation of the International Solar Alliance. Similarly, India’s success in the wind energy sector has been noted globally. Of course, conventional energy as well as hydropower will continue to play a dominant role in our energy mix for some time to come.
“To translate our vision of enhanced energy cooperation in the region, the most optimal solution is an integrated regional grid. But this is easier said than done. Inadequate transmission infrastructure or unnecessary duplication, lack of guarantee of power availability/offtake, insufficient coordination among national authorities, technical differences and regulatory mismatch, etc. are among the numerous challenges.
"Nevertheless, across the globe, a number of initiatives have led to regional cooperation in the electricity sector. These include the Greater Mekong Sub-Region (GMS), Southern African Power Pool (SAPP), South-East Europe, Gulf Coast Countries (GCC), Nile Basin Initiative (NBI), and so on. There is no reason that our region should be left behind.
“While India and Bangladesh account for the major natural gas and coal resources, Bhutan and Nepal have large hydropower resources. Sri Lanka has great potential for solar and wind power production. All the countries in fact have vast renewable energy potential. By harnessing complementarities in electricity demand, load curves and resource endowments, a mutually beneficial model of co-operation in South Asia could be developed,” he pointed out.
“In addition to boosting regional prosperity and development, South Asian regional power co-operation can also usher in sectoral efficiencies including attracting higher investments, complementary infrastructure creation for transmission and transit, avoidance of duplication of generation and distribution infrastructure, harmonization of policy framework across borders and a robust market place for best price discovery for both buyers and sellers,” he added.
Shringla said a transformative step in promoting regional trade of electricity was taken recently with the notification of procedures for export and import of electricity with our neighbouring countries. This follows the notification of guidelines in this regard in December 2018. The procedures will not only allow export and import of power but also facilitate the transit of power through India between two neighbouring countries. “Further, this also opens up our vast power trading market to our neighbours. We hope that the Indian power sector would now be able to strengthen its presence in countries in our neighbourhood.
“In this context, we look forward to inputs from SAGE to help identify necessary policy interventions towards deepening regional power cooperation. This Group can play an important role in promoting effective policy dialogue for energy and related issues in South Asia. We need to look at concrete interventions to enhance greater sub-regional connectivity in the power sector, which ensuring grid security and stability, and our larger strategic objectives,” he added.
“Regional energy interconnection often involves multiple stakeholders, government agencies and autonomous bodies. We need to look at ways to achieve a greater connection between these bodies at the regional level, as well as steps to strengthen and enhance the regulatory frameworks.
“Technology is another important aspect in our efforts. For instance, Solar Hybrids have been discussed as possible efficient solutions for fluctuations in power. We should look at identifying regional solutions to technology in the power sector. Innovative financing mechanisms must also be a key component of any initiative," he added.