- South Asia’s quest for a ‘green economy’ based on green strategies provides ample space for power trading
Dec 13, 2017-South Asia today presents one of the most attractive and challenging geographies in terms of energy security dynamics. This involves both sustainable development complexities and national interest-security perspectives. Four crucial border energy junctions have very distinctly emerged in four corners of this region. Project mode based sub-regionalism is fast becoming an instrument of effective energy trading. These junctions are India-Nepal-China junction in the north; India-Pakistan- Afghanistan-Iran junction in the west; India-Sri Lanka-Maldives junction in the south and India-Bhutan-Bangladesh-Myanmar junction in the east. Though India stands to be the central actor, each member country has a critical role—Pakistan and Afghanistan in the west; Nepal and China in the north; Bangladesh, Bhutan, Myanmar and Nepal in the east and Sri Lanka in the south.
Triggering changesThese junctions could be further extended to connect other regions and sub-continents. Afghanistan, India, Myanmar, Nepal and Pakistan as the core connecting geography have the geo-strategic advantage of integrating these four junctions with their diverse and rich energy resources. They act as transit countries for pipelines and cross border grids and as hosts of regional power pools for electricity. Each junction has its peculiarity and could trigger gains of unprecedented variety. The cascading and spiralling impact of this junction approach on energy exchanges, regional investment, trade, connectivity, and people-to-people contacts could in fact decimate national prejudices that hamper the process of regionalism.
Sustainable Development Goal 7 of affordable, reliable and modern energy for all under the 2030 Agenda for Sustainable Development is now a core element in this region’s energy development strategy. These countries depend on imports. A shortfall of energy is imminent in the context of steady urbanisation, rural electrification, industrial ventures and the building of a range of newer infrastructures including ports, economic corridors, and roads and railway around the Indian sub-continent.
The steady decline in crude oil price, gradual discarding of coal based energy plants and substantive progress made in shale gas production mainly in the US have started impacting the energy mix. This region committed to complying with the provisions of the Paris Agreement at the 21st Conference of Parties (COP) to the United Nations Framework Convention on Climate Change and their Intended Nationally Determined Contributions (INDC). This could be another major factor that is likely to trigger tangible changes in the future energy mix. This also indicates their likely renegotiations regarding renewable energy in the near future. These countries have massive renewable energy growth with India projected to touch 175 GW by 2022, Bangladesh 3,168 MW by 2021 and Myanmar 2000 MW by 2030. This could be well integrated as a second line of cross border power trading. East and north border junctions could even plan for hydro power regional balancing. These are newer pathways for green and sustainable growth.
Aspects of benefits
These countries have targeted ‘electricity for all’ deadlines and have strategized accordingly. They aim to attain such goals by focusing mainly on rural electrification, rural enterprises including agricultural activities and equitable renewable energy resource distribution. This drives them to search and engage with cross border sources. To provide decentralised energy solutions, these countries have now devised other means including grid extension and off grid systems like stand-alone home systems for dispersed communities, pico-solar devices, and even mini grids that provide great transformational potential.
Electricity availability will provide countries with means to diversify livelihood options. At least one-fifth of the regional population remains under-nourished. India, with 190 million under-nourished citizens stands out particularly, ranking 100th out of 117 countries in the Global Hunger Index. A World Bank study showed that against the per capita growth in agriculture productivity of East Asia and the Pacific (3.1 percent) and Latin America (2.8 percent), South Asia (2 percent) has been much lower. In Bangladesh, by 2050, rice and wheat yield might drop by 8 percent and 32 percent, respectively. However, wherever there is easy accessibility to electricity along with other critical inputs, the yield per hectare has been much higher, like in the case of Punjab and Haryana. The importance of a water-energy-food nexus is obvious. Uttar Pradesh, Punjab and Haryana, constituting about 21 percent of the total population and 10.13 percent of total geographical area, account for 72.17 percent of the total wheat production in the country. Electricity access could therefore help to bridge the yield gap.
In Nepal, it is found that increasing non-farm activities because of economic diversification and remittance induced income growth have triggered an increase in employment and real wages in the non-farm sector. This has an impact on poverty reduction. However, the decline in the share of the manufacturing sector in Nepal’s GDP could lead to a poverty trap for those who have moved out of this particular sector. The stagnant manufacturing sector is largely attributed to an unprecedented power shortage.
Access to electricity has multiple cascading effects varying from productive employment and income generating enterprises to social implications like reduction in the school drop-out rates of female students and lower consumption of biomass and fuel wood. The time that women devote to carrying water, fuel wood and fodder could reduce, and the subsequent smoke based pollution could largely be mitigated. A recent study by CUTS found that around the hydel project sites in Tala in Bhutan and Rahughat in Nepal, approximately 61 percent of the households in the surveyed districts have access to mobile phones, 87 percent in the villages of Myagdi district were free from open defecation, 95 percent in the villages of Chukha district had access to improved sanitation and 81 percent in Myagdi had access to tap water. Literacy rates have also been recorded as being significantly higher (66 percent Myagdi and 63 percent in Chukha). With access to electricity, enrolment of girls increased sharply and reduced the burden of household chores including cooking as they used electric rice cookers and other electric appliances. In Chukha, some even used electric fencing to guard their crops from wild animals. There is also a shift to commercial crops like ginger and cardamom, and dairy products.
South Asia’s quest for a ‘green economy’ based on green strategies including increasing dependence on renewable sources of energy and low carbon pathways also provides ample space for power trading. India’s predominance with 91 percent of the commercial (coal and oil based) energy consumption in the region, and the rather significant dependence of the Maldives, Sri Lanka, Nepal, and Pakistan on these two fuel sources could be a formidable challenge in moving towards renewable sources of energy. Investment in renewable energy in the line of ‘climate investment’ therefore stands out to be a critical facilitator. However, if the current trends continue, the CO2 emissions in South Asian countries are likely to be more than triple by 2050. Given the current fossil-fuel intensive path, if climate change impact continue, these economies will lose up to 1.8 percent of their collective economy every year by 2050 and up to 8.8 percent every year until 2100.
All these have pushed the case for steady switching over to clean power and technologies such as hydro, wind and solar. However, these renewable sources are geography specific and weather dependent, and have seasonal variations. With diversity in both the geography and peak demands in South Asia, load distribution evens out for a larger interconnected area. This results in a relatively flatter load and a larger balancing area to accommodate high renewable sources of energy. The sharp decline in the cost of renewables have made renewable technologies both economic and competitive. This would mean clean power at lower costs.
Lama is presently High End Expert, Institute of South Asian Studies, Sichuan University, China and recently prepared a research report on cross border power trading in South Asia for UNESCAP, Bangkok
Published: 13-12-2017 07:12