DHAKA, Dec 12, 2017 (BSS) – The existing bilateral arrangements for power trading among the South Asia Subregional Economic Cooperation (SASEC) countries, including Bangladesh, need to be gradually expanded in their volume, says the Asian Development Bank (ADB).
“Some initiatives in this regard can already be seen, like the agreement to export power from a specific generator in Nepal to Bangladesh through transmission grid in India, and preliminary discussions for Bangladesh to invest in a hydropower plant in Bhutan,” said the ADB in an article, ‘Taking Power Treading to the next level in South Asia’ recently posted on its website.
ADB hoped that the SASEC countries will further expand the initiatives in the near future. “More bilateral and multilateral power trading deals can pave the way to developing a single interconnected power market in the SASEC region that will benefit all countries,” it reads.
In such a market, the article says, the power systems of all the SASEC countries would be integrated through an adequate cross-border transmission capacity, so that the countries can share their generation with each other.
Under this arrangement, smaller countries like Nepal and Sri Lanka would rely on the market to provide reserve generation capacity, lowering their own investment costs, while fossil fuel-based generation in Bangladesh and India would be replaced with cleaner hydropower from Bhutan and Nepal.
A single interconnected power market is a clear win for SASEC countries, ADB said, adding that it will continue to support efforts to achieve this goal.
ADB identified that the absence of adequate cross-border transmission capacity and lack of clarity on regulatory oversight on cross-border trade are the major barriers to power trade.
Noting that SASEC member countries need to continue interacting at all levels aiming to address the barriers to power trade, ADB said continuous efforts to enlighten the decision-makers and other stakeholders is a key in this regard.
“SASEC countries, including Bangladesh, recognise that strengthening energy cooperation can help them cope with emerging energy sector challenges such as rapidly increasing energy access needs and emphasis on climate change mitigation,” ADB said.
Under the 2016-2025 operational plan, the SASEC countries are looking to expand energy trade infrastructure, and boost power trading with the overall goal of creating a sub-regional power market.