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

1. Regulators and Policy Makers Retreat 2012
Transnational Trade of Electricity
Md. Abul Kalam Azad
Power Secretary
Government of Bangladesh
Goa, India
25 August 2012

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. 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. 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. Fuel Mix in SAARC Region

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. Prevailing Initiatives for
Regional Energy Cooperation

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)
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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
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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
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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
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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
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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
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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
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15. Prospective Areas of
Cooperation for Electricity Trade

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 development
Sharing of experience and good practices
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Share the experiences and good practices through SEC and BEC

17. Proposed Trade Opportunities
Four multi-lateral trade and cooperation options:
1. Electricity Market: Short to long term
2. Regional Refinery : Medium term
3. LNG Terminal: Medium term
4. Regional Power Plant: Medium term

18. Proposed Trade Opportunity
Option 1: Electricity Market
Benefits:
1. Reduction in generation reserve requirement
2. Increase in economic value
3. Optimal exploitation of energy resources
4. Reduction in cost of supply
5. Lesser environmental impact of fossil based power generation
6. Incentives to resource rich countries to accelerate power

19. Proposed Trade Opportunity
Option 2: Regional Refinery
Benefits:
1. With a 23 MMTPA refinery around USD 14.8 b would be saved
2. Net revenue of USD 2.75 b accrued on relative demand of petroleum
products
3. Technology transfer for building refinery
4. Economies of scale

20. Proposed Trade Opportunity
Option 3: Regional LNG Terminal
Benefits:
1. Meeting the region’s natural gas deficit resulting additional power
2. Diversification of current fuel basket
3. More supply options available to LNG importers
4. Decreasing cost of technology
5. Cleaner fuel for power generation as compared to coal

21. Proposed Trade Opportunity
Option 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. Recommendation

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
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24. Conclusion
An Integrated Energy Market through transnational trade of electricity
through Win-Win options removing unnecessary conflicts can ensure
the Energy Security in the Region
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25. Thank You