Power Trading in South Asia: Some Aspects of Benefits

Abstract

Of having immense regional capacity of 395,096 MW as of mid-2018, South Asia is gradually emerging as a fulcrum of electricity exchange and powers trading so, bilateral exchanges are occurring, as evident in the noteworthy Bhutan-India power flow of 1,410MW. India and Bangladesh have four historic power trading practices in place and the Power Purchase Agreement of 2014 between Nepal and India, these two countries exchange up to 350 MW of electricity. All these have triggered immense possibilities opening the scope for multilateral power flows. A huge jump from the present total cross-border trading of hardly 2500 MW is very possible. Nepal could potentially be the biggest beneficiary in this game. If harnessed steadily, its power could be sold across South and South East Asia, with wheeling facilities provided by Indian national grids. A Bangladesh–Bhutan–India trilateral hydroelectric power-generation agreement is likely to be signed soon. Energy secretaries of Bangladesh and Nepal have decided to develop hydropower projects in Nepal through government-to-government investment and then export the electricity thus produced to Bangladesh through the Indian transmission system Power trade would change the composition of the export baskets of power exporting countries and help them address their adverse balance of trade and balance of payment. Additional income from power export and an enhanced level of economic activity can be invested in social infrastructure.