Shared Power
A regional gathering stresses on the need to deepen efforts to attain regional cooperation in energy
By SANJAYA DHAKAL in Dhaka
Even as economies of countries in South Asia like India , Bangladesh and Pakistan are growing at an impressive rate, they are likely to face serious problems in near future thanks to looming energy crisis.
India , a country with over one billion population, is growing at over seven percent. Its installed capacity of power currently stands at 115,000 MW. But is suffers from peak power deficit of 15 percent and energy deficit of 9 percent. As the country grows, its industries will develop voracious appetite for energy. In case the energy is not available, that could slowdown its growth even.
 |
| A DESCO customer counter : Serving the energy needs |
India aims to become self-sufficient in electricity by 2012 and build in a 5 percent reserve margin. “All in all, another 100 GW of electricity generation is needed for that. In total, the price tag is put at $205 billion to 2012,” stated Dave Ernsberger, Editorial Director, Asia , of Platts – an energy magazine.
Similar is the situation of Bangladesh , which has 5025 MW of installed capacity – overwhelming majority of them extracted from gas. Bangladesh wants Indian corridor for bringing electricity from the two Himalayan Kingdoms ( Nepal and India ) in exchange of giving right of way for Myanmar-Bangladesh-India gas pipeline, which is being proposed.
On the other hand, countries like Nepal and Bhutan are sitting on the top of huge but under-utilized water resources. Nepal has 43,000 MW of economically feasible hydropower resources that remains untapped. It would need investment to the tune of US$ 100 billion to finance these projects. Bhutan also has tremendous water resources and is already benefiting from Indian investment in its hydropower projects like Chukha and Tala.
Experts believe that the countries of the South Asian region could grow simultaneously if there is mutual cooperation in energy sharing. “We have tremendous potential in this region. South Asia is growing rapidly but the potential is much more,” said Mahmudur Rahman, adviser, Energy and Mineral Resources Division at the Bangladeshi Ministry of Power, Energy and Mineral Resources.
Speaking at a workshop of South Asian energy journalists organized by the United States Energy Association (USEA) in Dhaka , Bangladesh on July 26-28, Rahman, who is also the Executive Director of Board of Investment of Bangladesh, highlighted the need for mutual growth of the region. “Conflict thrives on poverty and hunger. Therefore, we need to grow and grow together.”
Stressing the coming energy crisis, Rahman said that the economic growth in this century would largely depend on access to energy. “We can achieve a lot if we eliminate suspicions from our minds,” he said.
Ruing the lack of progress in regional cooperation in this sector, Iqbal Hassan Mahmood, State Minister for Power, said, “Till today we are still discussing the issue of SAARC grid at junior officers’ level. This issue needs to be taken up at the highest level.” In fact, a regional meeting of power ministers is scheduled in September in Pakistan to discuss the issue.
The countries in South Asian region require energy for poverty reduction and GDP growth. “Power also plays crucial role in bringing down the cost of production in our manufacturing industries like garment and agro-based,” said Mahmood.
The abundant resources of hydropower in Nepal and Bhutan and gas in Bangladesh coupled with resources as well as expanding market of India could provide a mutually supporting atmosphere in the region. “There is no reason why the people of this region should be poor,” said Mahmood.
As such, the growing prices of oil in international market has clearly indicated the foolishness of over-dependence on the imported fossil fuels.
“Including China and India , Asia accounts for more than one third of the global population, but they just have 4 percent of remaining known oil reserves,” Ernsberger added highlighting the danger of over-dependence on oil for energy. Already the price of oil has shot past US$ 60 per barrel. “And it is not likely to come down in near future.”
According to Ernsberger, the countries of Asia Pacific region consume 25 percent of the global oil production – compared with 4 percent of reserves within their territories. “They will never have enough oil to fulfill their demand. Therefore, they will always be price-taker and not price maker,” he added. The world currently consumes 80 million barrels of oil a day – of which 21 million barrels and 5.7 million barrels are consumed by the US and Japan respectively.
The growing dependence on imported oil has also resulted in distorting the basic economics of these countries. Most of the countries provide cushion to their consumers through combination of subsidies and price caps. “But subsidies are only a short-term answer. As I see it, the price of oil is growing so rapidly that no nation can bear the spiraling costs of subsidizing beyond two to three years,” Ernsberger noted.
The bleak oil scenario is another reason why countries of South Asia needs to cooperate to build, share and utilize their own natural resources like hydropower and gas.
SAFEJ Award Announced
With funding from the USAID South Asia Regional Initiative for Energy (SARI/Energy), the United States Energy Association (USEA) has announced to conduct the South Asia Energy Journalism Awards to recognize excellence in energy journalism in South Asia and the improvements made in the field of energy journalism through participation in SARI/Energy activities and/or the Forum of Energy Journalists of Nepal, the Forum Energy Reporters of Bangladesh, or similar organizations in other member countries.
The South Asia Energy Journalism Awards aim to highlight the efforts of South Asian journalists to increase awareness of energy issues and inspire consumers, the community, the government and individuals in the region.
“In 2000, the United States Agency for International Development (USAID) launched the South Asia Regional Initiative for Energy (SARI/Energy) clean energy trade, energy efficiency, rural energy supply, energy regulatory issues, energy statistics, and private sector involvement in the region of South Asia. The mission of SARI/Energy ’s actions in Afghanistan, Bangladesh, Bhutan, India, Nepal, Pakistan, Sri Lanka and Maldives have led to widespread sharing of best practices, models of institutional reform and restructuring, and documented performance improvement,” stated John Hammond, program manager, USEA.
“With funding from the USAID/SARI/Energy Program, USEA established the South Asia Energy Journalism Partnership. The purpose of this partnership is to strengthen the skills of media representatives in reporting on energy related issues and to increase the participants overall knowledge of the energy sector relative to national and regional energy issues. It is through the South Asian Energy Journalists’ partnership that the South Asia Energy Journalism Awards program was born.”
Awards will be issued in three categories for pieces published or broadcast during the contest year, October 1, 2005 – September 30, 2006 . The three categories include newspapers, journals and broadcast media. The awards will be given to national winners and from among them three regional winners will be chosen who will receive a plaque, certificate and a token monetary prize.
World Bank Provides $ 35 Million Grant
The World Bank (WB) has agreed to provide grant assistance worth $ 35 million to Nepal for two different projects. The grant includes the Rural Access Improvement and Decentralization Project worth $ 32 million and the Economic Reforms Technical Assistance Project worth $ 3 million.
According to WB Nepal office, the first grant of $ 32 million will finance essential road infrastructure in rural areas. The project will be implemented in 20 districts.
“The World Bank believes that these two new projects are consistent with the innovative development approach Nepal has pursued in the last few years and hence it believes that providing financial support to them is appropriate,” Ken Ohashi, WB country director for Nepal.
“Whether the bank can continue to provide strong financial support in the coming months will depend heavily on the demonstration of political leadership in reinvigorating the pace of reforms,” he said. “Unfortunately, as the bank sees it, the overall pace of reform implementation has slowed over the past year,” Ohashi concerned, adding, “It may be worthwhile here to revisit a fundamental principle of the bank’s engagement in Nepal . The bank’s longstanding position has been that as long as reforms continue and development activities can be implemented, there will be a basis for the bank to continue providing financial assistance. Another way to understand this principle is that if the government is unable to bring focused efforts on sustaining and deepening reforms, continuing to provide large volumes of funding would unlikely have beneficial impacts. For Nepal to achieve a faster economic growth and poverty reduction, it is absolutely necessary to resolve conflict and to restore political stability. This, however, is likely to take time,” Ohashi said.
