Regional Energy Security Policy & Institutional Issues Presented on “International Conference on Power Systems (ICPS)” Institute of Engineering Tribhuvan University, Khatmandu IEEE, IIT Bombay, SARI/Energy Organised by on 4 Nov 2004 Khatmandu by T.L. SANKAR ASCI, Hyderabad

2 Defining the Region ≫ Our countries are parts of several regional initiatives.  South Asia  Asia Pacific  ESCAP Countries  ASEAN Countries ≫ This discussion confined to South Asia region as covered by SAARC. ≫ Includes: Bangladesh, Bhutan, India, Maldives, Nepal, Pakistan, Sri Lanka.

3 Rationale for South Asian Regional Energy Security ≫ Countries are widely divergent in  Size  Population  Resource base  Energy needs ≫ Still they share similarities and complementarities in Energy Status  Similarities provide basis for cooperation  Complementarities provide opportunities for sharing resources.  Additional drivers for regional energy initiatives – oIncreasing need to ensure safety of energy infrastructure oConcern for preserving environmental quality

4 Similarities :  High levels of poverty  Low per-capita commercial energy consumption  High, increasing dependence on oil and gas  Power availability and accessibility very low & inadequate  Power utilities poorly managed, financially precarious  Overall energy efficiency low  Inadequate attention to energy conservation and environmental concerns  Exploitation of renewable energy technologies - below market and economic potential South Asia Region – Energy Status

5 Complementarities :  Mismatch between the energy resource availability and demand.  Skewered distribution of fuel and hydropower resources.  Compare to their needs, Bhutan and Nepal have enormous hydro resources. India has more coal resources. Bangladesh has more gas resources.  Market for fuels for power huge in India.  Energy consumption mix varies widely.  Power sector capital equipment manufacturing capacity widely varying. South Asia Region – Energy Status Contd.

6 South Asian Regional Energy Status - Present & Future S. No FuelYear Renewable Energy etc 51.8 (3%) (7%) (5%) 41.3 (1%) 2 Hydro 3 Nuclear 4 Natural Gas (9%) (11%) (13%) (18%) 5 Oil (33%) (34%) (34%) (34%) 6Coal949.3 (55%) (48%) (48%) (47%) 7Total (in Mtoe) Outlook for Supply / Demand in Asia (by Fuel) Source: Computed from the Bar Graphs in the site given below. Website: of Agency for Natural Resources and Energy (ANRE), Japan.

7 What is energy security ? ≫ Meeting energy supply disruptions due to non- availability, transport constraints, or price. ≫ Ensuring sustained supply of energy in adequate quantities of appropriate quality at affordable prices. ≫ Minimising environmental adverse impacts in the production, transport and use of energy in all forms. ≫ Regional energy security is a subset of overall regional security and developmental arrangements.

8 Regional Energy Security Architecture : Regional Energy Policies and Regional Energy Security plans are not substitutes for sound National Energy Policies, National energy plans & National security arrangements. The National and Regional Energy Policy and Plans should be complementary and the two should be harmonised.

9 Regional Energy Security Plans Harmonising with National Plans Key attributes.  Optimal exploitation of energy resources.  Reduced dependence on oil imports.  Reduce imports from outside the regions & optimise energy trade within the region.  Transparency & sharing of information re: resources, export- import process, quantities Key objectives of National Energy Policy National plans for energy development and security Regional Policy Broad guide lines for energy plans & energy security National energy policy for energy development and security Regional level actions National level Actions

10 Regional Energy Security Harmonising with National and Regional Institutions  Information sharing, exchange  Cross-border investment public / private for resource development transport trade.  Energy equipment trade  Transfer/trade of skills & capacity building efforts Unified arrangements for enhancing regional energy cooperation & security Regional energy institutions National energy institutions Regional Strategic Petroleum Reserve (SPR) arrangements, institutions. Agency for National Strategic Petroleum Reserve

11 South Asian Regional Energy Risks Contingency Risk = Risk due to disruptions of supply of energy products due to war / other problems, in producing countries or receiving countries or on transport routes. Structural Risk = Due to resource demand mismatch, over-dependency due to sourcing of supply, other reasons.

12 Security Arrangements to meet Contingency Risks Short-term Supply disruptions :  Increasing imports from other regions by - diversifying sources of supply - through contingency contracts  Sharing of risk bearing with other countries.  Having Strategic Petroleum Reserve (SPR) at the national level and regional level

13 Security Arrangements to meet Structural Risks ≫ Diversification of fuel supply arrangements  Diversify sources of supply  Reduce dependence on single supply region ≫ Diversify fuel-mix of consumption  Reduce oil dependency  Reduce imported gas usage  Substitute oil with gas supplied under long-term contracts in transport sector power sector domestic use sector  Increase the use of coal with clean coal technologies  Increase the use of hydel resources

14 ≫ Introduce indigenous substitutes for imported gas  Coal bed methane  Gas hydrates Contd. ≫ Increase use of renewables -  Hydropower – large, small, mini, micro  Wind power  Biomass based power  Biofuels in place of oil products ≫ Energy efficiency improvements in  Production  Transformation  Transmission  Usage Security Arrangements to meet Structural Risks

15 Regional Cooperation Opportunities to increase energy security ≫ Hydroelectric resources -  Bhutan & Nepal have enormous/surplus resources  India has potential to absorb ≫ Electricity -  By joint development major power sales-transfer  By commercial norms interchange in border areas ≫ India’s coal based super thermal stations to meet the base load power demand in the region. ≫ Joint development plans for hydro power  Bhutan successful  Nepal – ongoing efforts

16 Contd. Regional Cooperation Opportunities to increase energy security ≫ Gas resources ≫ Gas pipelines  Gas from Mynmar through Bangladesh  Gas from Oman, Iran through Pakistan  Bangladesh has surplus resources  India’s gas needs are very large ≫ Renewable Energy development  Focussed, harmonised R&D efforts in technology / application development of RE Technologies

17 Institutional Arrangements for Regional Energy Security ≫ Bilateral Indo-Bhutan, Indo-Nepal Hydro Development Corporation ≫ Regional Power Grid (EHV) Corporation ≫ Regional Transmission Reliability Council ≫ Bilateral, multi-lateral gas pipeline corporations ≫ Regional energy training centres for engineers in development/operation of power systems ≫ Professional/Citizen groups to evolve, advocate important regionally relevant energy issues

18 THANK YOU