India to gain from regional power trade: WB study

The Dollar Business Bureau

World Bank, in a study, said that India can be spared from investing $26 billion in 35,000 MW coal-fired capacities over the next 25 years, from regional trade in electricity.

The study, which covered all the SAARC countries except the Maldives, said the major benefits would be through fuel cost reduction and by cutting greenhouse gas emission by 6.5 percent.

The benefits should come by replacing thermal power with hydro-power, to be obtained mostly from Nepal, Bhutan and Afghanistan.

The World Bank expects Nepal to generate 52.1 giga watts (GW) energy in 2040, in addition to its existing capacity of 1 GW. Bhutan would increase its capacity by 9.1 GW and Afghanistan by 3.6 GW.

Without the opportunities for trade, Nepal and Bhutan cannot expand their potential of hydra-electric generation due to the small size of their economies.

The study, conducted by economists Michael Torman and Govinda Timilsina, was aimed to promote market-based electricity trade and discounted the element of subsidy in various fuel and generation programmes.

Torman said that the major challenge is to implement the programme in the region, which is known for its political volatility and is seeing a limited cooperation within the sub-regional group of BBIN (Bhutan, Bangladesh, India, and Nepal).

At present, the region has combined generation capacity of 325 GW. Of the total capacity, India holds the maximum 276 GW, followed by Pakistan with 25 GW, Bangladesh with 16 GW, Sri Lanka with 3 GW, and Nepal and Bhutan with 1 GW each.

Barring shared power-cooperation between nations, Pakistan should enhance its power production by sevenfold to meet its demand in 2040, Bangladesh should increase by 4.3 times, Sri Lanka by 3.7 times and India by 2.8 times.

The additional capacity could majorly come via coal-fired utilities, which will require an overall investment of almost $859 billion.

India needs a huge investment of around $518 billion to meet its long-term energy demand. Pakistan would need $206 billion, Bangladesh $77 billion and Sri Lanka $13 billion to meet their requirements.