Heads of states likely to sign an energy cooperation agreement in Kathmandu next week
Thanks to India’s initiative, a common energy market in South Asia may become a reality soon, paving the way for enhanced electricity trade among countries of the region. Saarc heads of states are expected to sign a framework energy cooperation agreement during their meet in Kathmandu next week. The Modi government on Thursday secured Cabinet’s approval for signing the proposed pact.
The idea of a regional energy market was floated in the Saarc Summit in Maldives in 2011.Currently, in the absence of a grid, power is being traded bilaterally between countries.
For example, Bhutan supplies power to India and India supplies electricity to Nepal and Bangladesh. However, in the absence of a regional grid, one cannot use neighbouring countries’ transmission system to supply electricity to a third country. This constraint will be overcome once a regional grid is in place.
Nepal and Bhutan have huge generation potential that can be tapped for export as a cheaper option to Pakistan, Sri Lanka and Bangladesh that heavily depend on imported fuels to generate electricity.
But before a regional grid is set up to harness this potential, regulatory norms in all countries of the region will have to be harmonised and transmission bottlenecks removed.
Power minister Piyush Goyal has pushed vigorously for building a Saarc grid. While addressing the recent conference of the Saarc energy ministers in Delhi, Goyal said “Rivers can flow only in one direction, but power can flow in the direction of our choice.”
To counter the growing Chinese inflence in the South Asia, India has of late stepped up its economic diplomacy in the region. As part of the strategy, Indian PSUs, such as NTPC and NHPC, are setting up power plants in Bhutan, Nepal and Sri Lanka. Similar cooperation has also been mooted with Pakistan.