India’s Energy Coopertaion with Neighbouring Countries

• India and Bhutan pact for first joint venture hydropower project 600 MW Kholongchhu project. It is a 50:50 Joint Venture between Sutlej Jal Vidyut Nigam, Himachal Pradesh PSU and Bhutanese Druk Green Power Corporation.

India’s Energy cooperation with neighbouring countries

• India-Bhutan: on hydropower development and trade, in 2006 to develop 10,000 MW of hydropower by 2020
• Key projects include, Tala hydropower project (1,020 MW) and Dorjilung hydropower project (1,125 MW) (trilateral cooperation Bhutan, India and Bangladesh).
• India-Nepal Electricity trade: Power Trade Agreement in 2014 to buy and sell electricity during times of shortages.
• 22 cross border power exchange facilities
• Mahakali Treaty 1996 for Pancheshwar Multipurpose Project.
• India – Bangladesh Electricity trade- MoU on bilateral Co-operation in the areas of Power and establishment of grid connectivity
• India supplies about 1,200 MW power to Bangladesh, to be increased to over 2,500 MW by 2021.
• India-Myanmar: Interconnection transmission line from Moreh (Manipur) to Tamu (Myanmar) transports electricity from India to Myanmar.

Benefit of energy cooperation

• Utilization of untapped hydropower potential
• Effective use of seasonal complementarities: During winter when the run of rivers become dry Bhutan and Nepal import electricity from India. When other renewable sources are less potent like solar energy during monsoon in India, harnessing hydropower will help to meet required demand
• Reduced dependency on fossil fuel
• Environmental benefits: India can reduce 6.5% of power sector CO2 emissions during the 2015-2040
• Create investment opportunities:  strengthening the existing generation, transmission and distribution network across countries. investment opportunities where private sector can participate
• Economic and Financial Gains: Providing stable electricity supply to the consumers across borders will promote industrial and commercial activities
• Economies of Scale: Regional approach lowers the cost of electricity generation.

Challenges in cross border electricity transmission

• Policy Challenges: Lack of harmonious policy framework E.g. National Electricity Policies do not have dedicated focus on development of a competitive market across neighbouring region.
• Infrastructural / Technical constraints: Absence of any Grid Discipline in cross border electricity trade. Limited transmission network for cross border electricity trade and significant T&D losses act as constrains.
• Political Challenges: Political stability and National security concern like tariff fixation has political backlashes, hence fixation of uniform tariff for electricity trade could be challenging.
• Investment Challenges/ Financial Constraints: Given the poor financial conditions of the state-owned utilities, investment has to be pumped in by the private sector with emphasis on foreign direct investment (FDI) to develop hydropower projects.

Multilateral initiatives in South Asia for energy cooperation

• South Asia Regional Initiative for Energy Integration (SARI/EI), 2000 to promote energy security through increased trade, investment and access to clean sources of power and fuel. It covers 8 countries: Afghanistan, Bangladesh, Bhutan, India, The Maldives, Nepal, Pakistan and Sri Lanka.
• SAARC Framework Agreement for Energy Cooperation (Electricity) 2014 to facilitate integrated operation of regional grid across SAARC.
• South Asia Subregional Economic Cooperation (SASEC) Operational Plan 2016-2025 identifies Energy as one of the four-priority sectors for partnership among SASEC members (Bangladesh, Bhutan, India, Maldives, Myanmar, Nepal, and Sri Lanka).

Way forward

• requires harmonious policy framework, cross border steering committee and independent multilateral regulatory body. 
• private investment should be promoted though foreign direct investment (FDI) and more financial assistance from Multilateral Financial institutions.
• common platform should be formed for periodic knowledge exchange amongst the policy makers, regulators, subject matter experts, research institutions, civil society organizations and media.