SAARC Grid: Is it myth or reality?

The seasonal fluctuation of demand and supply of electricity and variations of sources create suitable situation for the cross border trade of electric power in the SAARC region, especially in India, Nepal, Bhutan and Bangladesh. India generates its major portion of electricity from coal, Bangladesh is rich in natural gas and Bhutan and Nepal, the two Himalayan nations have a great potential in hydropower due to their altitudinal variations. There is deficit of electricity in all nations except in Bhutan where the maximum demand is below 400 MW and the total production is above 1000 MW. Moreover, Bhutan is planning to produce electricity as much as 10,000 MW by 2020 and the surplus energy will be exported to India. Although, Nepal is facing a load shedding for more than half a day during the dry season due to the low volume of water in river, electricity that is equal to 43,000 MW is financially feasible for generation. It is far more than the domestic demand. Therefore, the surplus energy can be exported to India or Bangladesh using transmission line of India for earning foreign exchange which can minimize ever increasing trade deficit.

It is well known fact that for the realization regional trading in these countries, there should be a common grid which has an open access to transmission line for all players participating countries. Prior to construction of it, there need to be harmonization of laws and regulation so that there will be no legal hindrance. Furthermore, voltage and frequency of these countries should be synchronized for smooth operation. The need of a regulatory body cannot be denied as it looks after issues of contract enforcement, payment, energy transfer etc. and create confident among generators, developers and investors. All these actions lead to more secure south Asia in terms of energy, which is basis for economic and technological development.

Despite of all these possibilities, the concept of SAARC grid is moving in a very slow pace and very less has been achieved in a period of decade. There is power trading of Bhutan, Nepal and Bangladesh with India on only bilateral basis. However, several problems related to regulatory gaps and absence of complementary policies stop private sector from entering into the power market. With the participation of private bodies, the electricity market becomes more vibrant as it creates competition in price and quality of service. After then only, the energy market of south Asia becomes efficient.

In nutshell, the success of SAARC grid mainly depends upon political willingness of India as it is situated in the middle and her border is connected with Bangladesh, Nepal, Bhutan and Pakistan. If India formulates policies that is suitable for regional power trade, then the countries of Indian subcontinent also changes their respective power policies accordingly as it is mutually beneficial for all. Otherwise, the concept of SAARC grid remains only in paper as myth.