Energy Security in South Asian Region

In Context 

Electricity generation in South Asia has risen exponentially.

• South Asia has almost a fourth of the global population living on 5% of the world’s landmass. 

Major Points 

• Electricity generation in South Asia has risen from 340 terawatt hours (TWh) in 1990 to 1,500 TWh in 2015.
• Country wise analysis: 
  • Bangladesh has achieved 100% electrification recently .
    • Bhutan, the Maldives, and Sri Lanka accomplished this in 2019. 
  • India :94.4%,Afghanistan: 97.7% and Pakistan :  73.91%. 
    • India is trying to make a transition to renewable energy to provide for 40% of total consumption, while Pakistan is still struggling to reduce power shortage negatively impacting its economy.
    • India leads South Asia in adapting to renewable power, with its annual demand for power increasing by 6%.
  • India exports 1,200MW of electricity to Bangladesh, sufficient for almost 25% of the daily energy demand.
  • Bhutan exports 70% of its own hydro powered electricity to India worth almost U.S.$100 million. 
  • Nepal sells its surplus hydroelectricity to India and also exports fossil fuel to India worth U.S.$1.2 billion.
• Cost wise 
  • Bhutan has the cheapest electricity price in South Asia (U.S.$0.036 per kilowatt hour, or kWh) while India has the highest (U.S.$0.08 per kWh.)

 Approaches and Policies 

•  Expansion of power grids:
  •  South Asia is reinforcing its transmission and distribution frameworks to cater to growing energy demand through the expansion of power grids and also by boosting green energy such as solar power or hydroelectricity. 
• Energy resources:
  • South Asia has vast renewable energy resources — hydropower, solar, wind, geothermal and biomass — which can be harnessed for domestic use as well as regional power trade. 
    • India relies heavily on coal, accounting for nearly 55% of its electricity production
    • 99.9% of Nepal’s energy comes from hydropower
    •  75% of Bangladesh’s power production relies on natural gas, and Sri Lanka leans on oil, spending as much as 6% of its GDP on importing oil.

• Advanced methods of energy production:
  • South Asian leaders are increasingly focused on efficient, innovative and advanced methods of energy production for 100% electrification. 

• The region is moving towards green growth and energy as India hosts the International Solar Alliance. 
• In Bangladesh, rural places that are unreachable with traditional grid-based electricity have 45% of their power needs met through a rooftop solar panel programme which is emulated in other parts of the world. 

• Bilateral and multilateral energy trade agreements:

• The South Asian Association for Regional Cooperation (SAARC) prepared the regional energy cooperation framework in 2014, but its implementation is questionable. 
• There are a number of bilateral and multilateral energy trade agreements such as the 
  • India-Nepal petroleum pipeline deal
  • the India-Bhutan hydroelectric joint venture
  • the Myanmar-Bangladesh-India gas pipeline
  • the Bangladesh-Bhutan-India-Nepal (BBIN) sub-regional framework for energy cooperation
  • the Turkmenistan-Afghanistan-Pakistan-India (TAPI) pipeline.

Objectives of energy policies 

• The electricity policies of South Asian countries aim at providing electricity to every household. 
• The objective is to supply reliable and quality electricity in an efficient manner, at reasonable rates and to protect consumer interests. 
  • It will address the following issues which include generation, transmission, distribution, rural electrification, research and development, environmental issues, energy conservation and human resource training.

Growth and Benefits 

• GDP: 
  • Electrification helps in improving lifestyle and also adds to the aggregate economy by improving the nation’s GDP. 
    • Given that a 0.46% increase in energy consumption leads to a 1% increase in GDP per capita

• The South Asian nations have greatly benefited from widening electricity coverage across industries and households. 
  • More electricity leads to increased investment and economic activities within and outside the country.

• Sustainable Development Goals:
  • Solar power-driven electrification in rural Bangladesh is a huge step towards Sustainable Development Goal 7 (which is “Ensure access to affordable, reliable, sustainable and modern energy for all”) by 2030 and engaging more than 1,00,000 female solar entrepreneurs in Sustainable Development Goal 5 (which is “achieve gender equality and empower all women and girls”).
  • Access to electricity improves infrastructure i.e., SDG 9 (which is “build resilient infrastructure, promote inclusive and sustainable industrialization and foster innovation”). 
  • Energy access helps online education through affordable Internet (SDG 4, or “ensure inclusive and equitable quality education and promote lifelong learning opportunities for all”)
  • More people are employed (SDG 1: “no poverty”), and are able to access tech-based health solutions (SDG 3, or “ensure healthy lives and promote well-being for all at all ages”).

Challenges/Issues

• Finance and investment: Gearing up the banking sector for arranging finances for larger deployment goals, exploring low-interest rates, long-term international funding, and developing a suitable mechanism for risk mitigation or sharing by addressing both technical and financial bottlenecks are major challenges. 
• Land acquisition: It is one of the major challenges in renewable power development. Identification of land with RE potential, its conversion (if needed), clearance from land ceiling act, the decision on land lease rent, clearance from revenue department, and other such clearances take time. 
• Technological Barriers: Renewable energy technologies are still evolving in terms of technological maturity and cost competitiveness, and face numerous market related economic and social barriers.
• Penetration in other sectors: Enabling penetration of renewables in the so-called hard to decarbonize sectors is going to be difficult.
• Restriction 
  • The current participation in cross-border projects has been restricted to respective tasks, among Bhutan and India or Nepal and India. 

• Impact of Covid-19: The COVID-19 pandemic has thrown up tough challenges. The pace of renewable energy projects development and commissioning has been adversely impacted. 

Way Forward 

• Involvement of private sector
  • Government alone cannot be the provider of reliable and secure energy frameworks, and private sector investment is crucial. 
    • In 2022, private financing accounted for 44% of household power in Bangladesh, 48.5% in India, and 53% in Pakistan. 
  • Public-private partnership can be a harbinger in meeting the energy transition challenges for the world’s most populous region.
• Flexible and dynamic generation solutions
  • The electricity system needed “flexible and dynamic generation solutions” such as battery storage, pumped hydro storage, peaking gas-fired capacity and flexible operation of its existing coal fleet.
• Followings things are also needed 
  • Better building-design practices
  • Climate-proof infrastructure
  • A flexible monetary framework
  • An integrated resource plan that supports renewable energy innovation. 
• India’s giant target of 450GW by 2030 needs a capacity commissioning rate of, on average, 35-40GW annually going forward with annual investment of US$35-40Bn in generation, transmission and storage assets.
• The Indian renewables financing market also needs to access domestic capital.
  • There is a scope to raise domestic capital through rupee-denominated green bonds to expand the pool of financing for renewables.