Unlocking the Potential: Cross-Border Electricity Trade

  Aug 11, 2023

Cross-Border Electricity Trade: India and South Asia

Neighbourhood Policy

India's Vision for Cross-Border Electricity Trade:
India aspires to significantly enhance its cross-border electricity trade by establishing connections with countries across South Asia, BIMSTEC, and Southeast Asia. This strategic initiative builds upon the existing cross-border power trade within the Bhutan, Bangladesh, India, Nepal, and Myanmar sub-regional grouping. Furthermore, there are plans to extend this cooperative effort to include Sri Lanka. In pursuit of this goal, India's power ministry has engaged in discussions with various Southeast Asian nations, including Thailand and Singapore. These dialogues encompass the establishment of grid connections that span both terrestrial and underwater domains.
Progress in South Asia's Cross-Border Power Trade:
The growth of cross-border power trade within South Asia has been notable. This approach has yielded mutual benefits for nations such as Bhutan and Nepal, which harness their surplus hydroelectric power to export to India. Bhutan, for instance, has emerged as a substantial hydroelectric power exporter, with India purchasing 7.3 billion units (BU) of power in the fiscal year 2021-22, compared to 5.56 BU in 2013-14. Nepal, transitioning from an electricity importer to an energy-surplus country, has initiated exports to Bangladesh. This showcases the positive outcomes achievable through collaborative cross-border power trade efforts in the region.
Challenges and Focus Areas:
The expansion of cross-border electricity trade presents inherent challenges, particularly in terms of financing large-scale infrastructure projects. G-20 support emerges as a vital component in attracting international financing for these cross-border initiatives. One specific challenge involves the intricate process of laying cables across deep seabeds, requiring specialized vessels and skilled labor for successful implementation. Recognizing the significance of these challenges, efforts are underway to address regulatory and pricing issues. Additionally, the harmonization of legal and regulatory frameworks for cross-border trade is crucial to create a conducive environment for regional energy cooperation.
Examples of Projects:
Discussions between India and Southeast Asian countries like Thailand and Singapore for the establishment of cross-border grid linkages. These projects would encompass both overland connections and submarine cable installations. Importance of infrastructure development to facilitate cross-border electricity trade, contributing to regional energy security and sustainable growth.India and Bangladesh in 2023 inaugurated a cross-border pipeline designed to transport one million metric tonnes of diesel annually from Assam's Numaligarh refinery to the northern regions of Bangladesh.India and Sri Lanka have agreed to conduct feasibility studies on a petroleum pipeline and a land bridge connectivity project between the two countries. The decision was made during Sri Lankan President Ranil Wickremesinghe's visit to India in mid-2023.


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