South Asia’s energy quest could reshape region/Washington Post

http://www.washingtonpost.com/world/south-asias-energy-quest-could-reshape-region/2011/05/24/AGca0tLH_story.html?wprss=rss_world

South Asia�s energy quest could reshape region
According to Renewable Energy Ministry, India plans to quadruple its
power generation capacity by 2022.

By Rama Lakshmi, Published: June 8
New Delhi � India and its Himalayan neighbor Nepal are set to build a
massive power transmission line across their border, a step toward
addressing rising energy needs in a region that analysts say has been
held back economically by political distrust.

The two countries will meet later this month to finalize a deal in
which India will export electricity to Nepal over 87 miles of new
power lines. In return, Nepal will construct power plants and
eventually send its surplus electricity to India, which is negotiating
similar arrangements with Bangladesh, Sri Lanka and Bhutan.

The countries of South Asia, which have historically watched one
another with suspicion, also plan to set up a regional power grid as a
severe energy shortage drags on the economies of more than 1.4 billion
people. Anaylsts say the project could build trust in a region that
will require new levels of cooperation to continue growing economically.

�South Asia is a major hub of fast-growing economies with 25 percent
of the world�s population. There is an ongoing shift in focus from
agriculture to manufacturing,� K.C. Venugopal, India�s deputy power
minister, said at a conference in New Delhi. �No South Asian country
can meet its energy needs entirely from within its own domestic
resources. We need to integrate the entire region by a robust power
grid.�

As a model, power officials are studying a regional grid connecting
Norway, Denmark, Sweden and Finland and another that connects South
Africa, Botswana and Zimbabwe.

India will need to add about 250,000 megawatts of power by 2017, a
fivefold increase, to sustain its economic growth. A South Asian grid
will give the region 100,000 megawatts of power to trade and help
India tap the hydropower and natural gas reserves of its neighbors,
officials say.

�What is happening in South Asia mirrors the larger trends occurring
across the continent. We have seen similar energy agreements between
China and Russia, Thailand and Malaysia,� said Kent E. Calder,
director of the Edwin O. Reischauer Center for East Asian Studies at
Johns Hopkins University. �As economic interdependence increases and
the cost of transmitting power long distance becomes less, energy has
become the cutting edge of a broader regional integration in the past
decade.�

Nepal and Bangladesh, wary of India�s tendency to play the bullying
big brother, have feared that it might exercise control over them
through such alliances.

Cooperation on the subcontinent has also failed to take off because of
the deep hostility between Pakistan and India, which have fought three
wars since 1947. After the terrorism attacks in Mumbai in 2008,
relations further soured and the two countries did not revive initial
talks for linking their electricity grids, although discussions are
expected to resume this year.

For regional energy cooperation to fully take off, Pakistan�s future
role as a supply route for gas is pivotal. A planned pipeline, called
the New Silk Route and running through Turkmenistan, Afghanistan,
Pakistan and India, promises to supply 3.17 billion cubic feet of
natural gas daily to energy-starved South Asia.

The $7.6 billion pipeline, financed by the Asian Development Bank, is
expected to be completed by 2016, and fuel prices, transit fees and
gas sales and purchases are being negotiated. But discussions have
faltered many times in the past decade, and many issues remain
unsettled. Officials in the region also worry about how to insure
against supply disruptions in the event of political hostilities
between India and Pakistan.

But the trust deficit in South Asia can be overtaken by the push to
end the power deficit, officials say.

�The geopolitical challenges in the region are tremendous, but they
will have to be overcome because of the sheer demand for electricity.
The popular pressure on the governments to deliver power is too
great,� said Jayant Prasad, special secretary in India�s foreign
ministry.

Plans are also underway to set up a $450 million undersea power
transmission link between India and Sri Lanka, and Indian companies
hope to help build hydropower plants in those countries. Only 9
percent of the total hydropower potential of South Asia, rich with
Himalayan rivers, has been tapped, according to a background note
prepared jointly by the U.S. Agency for International Development and
the Confederation of Indian Industry.

�We begin now by buying power from India. But by 2019, we will harness
about 3,000 megawatts of hydropower and will start exporting some of
that to India,� said Ram Chandra Pandey, general manager of Nepal
Electricity Authority. �That is what India is ultimately eyeing. But
we need political will to realize the dream.�
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