Regulators and Policy Makers Retreat 2012Transnational Trade of Electricity         Md. Abul Kalam Azad            Power S...
Outline of Presentation Introduction Energy Scenario in South Asia Proposed Trade Options Initiatives for Regional Coo...
Introduction South Asia: Home of 1.3 b. people – a quarter of the world’s population Annual Energy Growth is more than 5...
Energy Scenario in South Asia Wide variation of energy resources Huge coal reserveUntapped hydro potential Energy base...
Fuel Mix in SAARC Region
Regional Cooperation Regional Power Trade    Exist between India – Bhutan and India-Nepal    Infrastructure between Ban...
Prevailing Initiatives forRegional Energy Cooperation
SAARC Inter-governmental Framework Agreement for                         Energy Cooperation   Draft prepared in May 2010...
SAARC Market for Electricity (SAME)   Adopted resolution in 16th SAARC Summit, Thimphu, April 2010   Concept Paper has b...
SAARC Energy Centre (SEC)   Created through Dhaka Declaration in 2005 as SPV   Established in Islamabad in March 2006  ...
Energy Cooperation through BIMSTEC   Formed in 2004 to create a link between ASEAN and SAARC   MOU for establishment of ...
South Asia Regional Initiative for Energy (SARI/E) USAID sponsored program Focus Areas:   - Cross Border Power Trade   -...
South Asia Sub-Regional Economic Cooperation (SASEC) ADB sponsored program Comprises of Bangladesh, Bhutan, India and Ne...
Bilateral Cooperation Strong bi-lateral cooperation exist between the countries Electricity trade between India and Bhut...
Prospective Areas ofCooperation for Electricity Trade
Prospective Areas of Cooperation Cross Border Trade    - Opportunity to make a combined and diverse approach Energy Mark...
Proposed Trade OpportunitiesFour multi-lateral trade and cooperation options:1. Electricity Market: Short to long term2. R...
Proposed Trade OpportunityOption 1: Electricity MarketBenefits:1. Reduction in generation reserve requirement2. Increase i...
Proposed Trade OpportunityOption 2: Regional RefineryBenefits:1. With a 23 MMTPA refinery around USD 14.8 b would be saved...
Proposed Trade OpportunityOption 3: Regional LNG TerminalBenefits:1. Meeting the region’s natural gas deficit resulting ad...
Proposed Trade OpportunityOption 4: Regional Power Plant Benefits: 1. Hydropower plants in India, Bhutan and Nepal will pr...
Recommendation
Recommendations Establishment of SAARC Grid and Four Border Transmission  Interconnections Technical coordination throug...
ConclusionAn Integrated Energy Market through transnational trade of electricitythrough Win-Win options removing unnecessa...
Thank You
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Transnational Trade of Electricity

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Mr. Md. Abul Kalam Azad
Secretary, Power Division, Ministry of Power, Energy and Mineral Resources, Government of the People's Republic of Bangladesh
at RPR 2012, 23-26 August, Goa, India

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Transnational Trade of Electricity

  1. 1. Regulators and Policy Makers Retreat 2012Transnational Trade of Electricity Md. Abul Kalam Azad Power Secretary Government of Bangladesh Goa, India 25 August 2012
  2. 2. Outline of Presentation Introduction Energy Scenario in South Asia Proposed Trade Options Initiatives for Regional Cooperation for Electricity Trade Prospective Areas of cooperation for Electricity Trade RecommendationsConclusion
  3. 3. Introduction South Asia: Home of 1.3 b. people – a quarter of the world’s population Annual Energy Growth is more than 5% for the last decade Per capita consumption: 300 kWhWorld average : 2500 kWh Large variety of fuel mixHydro potential : 300,000 MWTransnational electricity trades  Europe through the Union for the Coordination of the Transmission of Electricity (UCTE)  Central America through Sistema de Interconexión Eléctrica de los Países de América Central (SIEPAC)  Central Asia through the Central Asian Republics (CARs)
  4. 4. Energy Scenario in South Asia Wide variation of energy resources Huge coal reserveUntapped hydro potential Energy base: India: Coal (35%) Bangladesh: Natural Gas (67%) Pakistan: Oil (46%) Sri Lanka: Oil (87%) Nepal: Imported Oil; Huge potential of hydro exists Bhutan: Huge potential of hydro exists
  5. 5. Fuel Mix in SAARC Region
  6. 6. Regional Cooperation Regional Power Trade  Exist between India – Bhutan and India-Nepal  Infrastructure between Bangladesh and India being developed  Discussion going on for trade between India and Sri Lanka Joint Investment  Huge investment requirement of SMS  India needs more than 220 b over the next 5 years  Bangladesh needs more than 17 b over the next 5 years  Investment requirement for harnessing hydro potential of Nepal and Bhutan
  7. 7. Prevailing Initiatives forRegional Energy Cooperation
  8. 8. SAARC Inter-governmental Framework Agreement for Energy Cooperation Draft prepared in May 2010 Objective:- to allow SMS for unrestricted cross border electricity trade- Share and update technical and commercial information- Constitute SAARC Regulatory Forum (SRF) 8
  9. 9. SAARC Market for Electricity (SAME) Adopted resolution in 16th SAARC Summit, Thimphu, April 2010 Concept Paper has been prepared Objective:- Optimize regional resources- Create additional opportunities of collaboration for member countries 9
  10. 10. SAARC Energy Centre (SEC) Created through Dhaka Declaration in 2005 as SPV Established in Islamabad in March 2006 Draft prepared in May 2010 Thematic Areas of involvement: - Development of Hydro power, renewable and non-renewable energy - Technology Transfer - Energy Trade - Energy Conservation and Efficiency Improvement The 4th SAARC Energy Ministers’ and Senior Officials meeting was held during 14-15 September 2011 in Dhaka. The meeting adopted the SRTETS 10
  11. 11. Energy Cooperation through BIMSTEC Formed in 2004 to create a link between ASEAN and SAARC MOU for establishment of BIMSTEC Grid Interconnection MOA for establishment of BIMSTEC Energy Centre (BEC) Thematic Areas of involvement: - Trans-power Exchange and Grid Interconnection - Energy Information Sharing - Development of Sustainable Energy 11
  12. 12. South Asia Regional Initiative for Energy (SARI/E) USAID sponsored program Focus Areas: - Cross Border Power Trade - Energy Market Information - Regional Clean Energy Development 12
  13. 13. South Asia Sub-Regional Economic Cooperation (SASEC) ADB sponsored program Comprises of Bangladesh, Bhutan, India and Nepal Focus Areas: - Sub-regional Energy Trade - Sub-regional Energy Market - Sub-regional Clean Energy Development SRETS prepared under SASEC assistance SASEC Energy Working Group meeting was held on 19 October 2012 in Bangkok 13
  14. 14. Bilateral Cooperation Strong bi-lateral cooperation exist between the countries Electricity trade between India and Bhutan Electricity trade between India and Nepal Bangladesh and India are working together India and Sri Lanka initiates bilateral cooperation 14
  15. 15. Prospective Areas ofCooperation for Electricity Trade
  16. 16. Prospective Areas of Cooperation Cross Border Trade - Opportunity to make a combined and diverse approach Energy Market Formation - Enable flow of foreign investment -Market based pricing, stable regulatory framework and market structure Clean Energy Development -Development of renewable energy sources (hydro, solar, wind etc.) -Institutional and policy impediments are prevailing -Need strong regional partnership Infrastructure Development - Joint venture investment may facilitate developmentSharing of experience and good practices 16Share the experiences and good practices through SEC and BEC
  17. 17. Proposed Trade OpportunitiesFour multi-lateral trade and cooperation options:1. Electricity Market: Short to long term2. Regional Refinery : Medium term3. LNG Terminal: Medium term4. Regional Power Plant: Medium term
  18. 18. Proposed Trade OpportunityOption 1: Electricity MarketBenefits:1. Reduction in generation reserve requirement2. Increase in economic value3. Optimal exploitation of energy resources4. Reduction in cost of supply5. Lesser environmental impact of fossil based power generation6. Incentives to resource rich countries to accelerate power
  19. 19. Proposed Trade OpportunityOption 2: Regional RefineryBenefits:1. With a 23 MMTPA refinery around USD 14.8 b would be saved2. Net revenue of USD 2.75 b accrued on relative demand of petroleum products3. Technology transfer for building refinery4. Economies of scale
  20. 20. Proposed Trade OpportunityOption 3: Regional LNG TerminalBenefits:1. Meeting the region’s natural gas deficit resulting additional power2. Diversification of current fuel basket3. More supply options available to LNG importers4. Decreasing cost of technology5. Cleaner fuel for power generation as compared to coal
  21. 21. Proposed Trade OpportunityOption 4: Regional Power Plant Benefits: 1. Hydropower plants in India, Bhutan and Nepal will provide economies of scale 2. LNG based power generation more economical than diesel based generation. 3. Less dependence on diesel ( particularly Sri Lanka and Maldives) 4. Cleaner and cheaper fuel for power generation
  22. 22. Recommendation
  23. 23. Recommendations Establishment of SAARC Grid and Four Border Transmission Interconnections Technical coordination through SAARC Energy Working Group Utilization of Hydro potential in North-eastern India, Nepal and Bhutan Establishment of Regional LNG Port at Mongla, Bangladesh Regional Nuclear Collaboration Developing a conducive policy support framework Building political commitment through SAARC Forum Carrying out detail feasibility study including cost optimization Concluding outstanding regional river basin agreements Identify the win-win options 23
  24. 24. ConclusionAn Integrated Energy Market through transnational trade of electricitythrough Win-Win options removing unnecessary conflicts can ensurethe Energy Security in the Region 24
  25. 25. Thank You

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