Power-hungry South Asian nations may advance hopes to build a common energy grid this week, edging closer to overcoming the political obstacles that have left some with a power deficit and others with abundance.
Nepal and Bhutan have substantial untapped hydroelectricity potential, while Bangladesh has large gas reserves that could be used domestically or exported to India, Pakistan and Sri Lanka—if only the infrastructure existed to carry it.
While the economic benefits appear clear, competing political interests and at times open hostility have stymied the effort. “Somehow, politics keeps getting in the way of economics as far as cross-border projects are concerned,” said Amrit Pandurangi, executive director, at PricewaterHouse Coopers, an audit firm. “Bangladesh at one point of time was willing to supply gas to India but now the situation has changed. It keeps changing its mind with the change in government.”
India accounts for nearly four-fifths of the electricity generated in South Asia, yet it grapples with the problem of peak shortages, which was at 14.2% between April 2006 and February 2007.
It already has some connections with neighbouring Nepal and Bhutan, and is studying the feasibility of linking with Sri Lanka and Bangladesh, issues that energy officials from South Asia are likely to discuss at their meeting in New Delhi later this week.
“The idea is a positive step. We have a bilateral building block with Sri Lanka, we have with Bhutan—we are exploring the possibility of doing that with other neighbouring countries,” said India’s power secretary Anil Razdan.
India’s rapid economic growth and the rising energy needs of its 102 crore people are boosting fuel demand, and with 70% of its oil needs imported, rising energy costs have fuelled inflation to its fastest rate in two years. But crippling shortages also threaten to constrain the expansion, adding urgency to the race for new power capacity.
Merill Lynch senior director Joseph Jacobelli said the benefits of a united power system—which could allow open trade, keep a lid on costs by utilizing the cheapest form of generation and encourage efficiency— would remain out of reach until the supply deficit could be eliminated.