ENERGY SECURITY IN

SOUTH ASIA OPPORTUNITIES & CHALLENGES

E n g r . K h o n d k a r A b d u s S a l e q u e

( P e n g & F I E B )

ENERGY SECURITY IN SOUTH ASIA

Introduction

Energy Demands, Potential and

Scenario

Challenges for Energy Sector in

South Asia

Opportunities, Prospects &

Challenges

Way out (suggestions and

recommendations)

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Introduction

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MAP OF SOUTH ASIA… 4

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…MAP OF SOUTH ASIA 4

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SOUTH ASIA: SOME FACTS

Population: About 25%

of the world’s population

[about 1.56 billion].

Total land: 4% [about

5.142 million Sq Km,] of

all land surface on the

earth.

GDP : 2.1% of the world

GDP.

GNI (except Maldives):

Only US$ 524, Highest

GNI Qatar US$ 98,948

in 2011.

GDP Growth Rate:

Afghanistan- 8%

India- 6 % to 9%

Bangladesh- 6% to 6.5%

Bhutan- 6%

Maldives, Nepal,

Pakistan & Sri Lanka -

3.5% to 5%.

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ENERGY SECURITY & ECONOMIC

DEVELOPMENT

It is estimated that

every 1% growth in

GDP creates 1.5%

growth in energy

demand.

Energy Security

helps in sustainable

quality energy

supply accessible to

the people at

affordable cost,

is directly related to

economic

development, a

precondition for

confronting

unemployment

issues and poverty

alleviation,

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Energy Demand,

Potential & Scenario

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ASIA’S ENERGY DEMAND (MTOE) AND GROWTH RATE (%) FORECAST 2019-2020

Country Electricity (Bkwh)

Oil product (Mtoe)

Gas (Mtoe) Coal (Mtoe)

Afghanistan 3.88 (13.1%) 3.48 (19.1%) 0.92 (14.5%) 0.0 (0.0%)

Bangladesh 72.79 (8.2%) 11.60 (7.3%) 44.03 (11.0%) 0.9 (3.7%)

Bhutan 6.88 (15.0%) 0.62 (16.0%) 0.0 (0.0%) 0.11 (16.0%)

India 1756 (7.1%) 246.9 (4.8%) 101.8 (8.0%) 447.6 (6.2%)

Maldives 1.57 (5.9%) 1.66 (12.0%) 0.0 (0.0%) 0.0 (0.0%)

Nepal 8.08 (8.0%) 1.61 (4.9%) 0.0 (0.0%) 0.78 (10.0%)

Pakistan 251.06 (7.5%) 30.94 (4.5%) 72.75 (6.2%) 13.9 (9.4%)

Sri Lanka 23.87 (7.2%) 7.82 (6.2%) 0.0 (0.0%) 7.0 (-)

Note: Figures in parenthesis refer to percentage growth rate for the forecast period 2003/04-2019/20. : NEXANT, August 2005.

INSTALLED CAPACITY MW

Countries Afghanistan Bangladesh Bhutan India Nepal Maldives Pakistan Sri Lanka

Fuel Type

Thermal 115 6000+ 17 123,759 54 200 13,978 2291

Coal NA 200 NA 105,437 NA NA NA 900

Gas NA 5,580 NA 18,095 NA NA 6,094 NA

Oil 115 2,315 17 1200 54 200 7,855 1381

Hydro 374 220 1,488 38,848 667 NA 6,481 1368

Nuclear NA NA NA 4780 NA NA 462 NA

Renewable NA 75 0.5 22,233 NA NA 38

Total 489 8,390 1505.5 189,620 714 200 21,021 3687

Dependable Generation

7,500 1,505 170,000 400-700

180 14,000 2,500-3,500

POWER: GENERATION, CONSUMPTION

Country Population Electricity Generation (Gwh)/Annual

Electricity Consumption (Gwh)/Annual

Afghanistan 29,835,392 754 231

Bangladesh 15,25,18,015 35,1188 (F2012) 29,850 (F2012)

Bhutan 708,427 2,000 184

India 1,210,198,422 1,920,792 905,974

Nepal 26,620,999 2,511 2,525

Maldives 394,999 169 *542

Pakistan 177,100,000 90,400 68,550

Sri Lanka 20,238,000 9,507 7,885

Primary Energy Demand of SAARC Region M

TOE

52% of Primary Energy would be utilized to meet the Demand of Electricity

COMMERCIAL ENERGY CONSUMPTION PATTERNS

14

OIL Consumption dominates the most countries

- 100% in Maldives, 30% in Bhutan, India & Pakistan, others 60% - 80%

GAS dominates in Pakistan & Bangladesh.

COAL dominates in India

ENERGY RESOURCE IN SAARC

Countries Afghanistan Bangladesh Bhutan India Pakistan Maldives Nepal Sri Lanka

Coal (Million Tonnes)

440 3300 2 90085 17550 NA NA NA

Gas TCF 15 20.5 NA 39 33 NA NA NA

Oil Million Barrels NA 55 NA 5700 324 NA NA 150

Hydro MW 25,000 330 30,000 150,000 50,000 NA 42,000 2,000

Biomass Million Tonnes

NA NI 26.6 139 NI 0.06 27.04 12

Bangladesh Use 55 Million Tonnes of Biomass Annually.

PRIMARY RESOURCE POTENTIAL

Coal (MT)

India-56.50

Pakistan-3.45

Afghanistan-4.4

Bangladesh- 8.8

Oil (Billion barrels)

India - 5.5

Afghanistan-75

Pakistani-353

Natural Gas (TCF)

India-37.26

Bangladesh-8.52

Pakistan 32.28

Hydropower (MW)

India -40,000

Nepal and Bhutan

has substantial

potential of

Hydropower

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SCENARIO…

Optimal development of the region's internal energy resources is hampered.

Access to the significant energy resources in the neighboring countries is denied.

This increases the cost of energy supply.

It reduces energy security of the individual countries and of the region as a whole.

High technical & commercial losses.

Poor commercial performance of service providers.

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…SCENARIO

National energy systems are weak or have

non-existent interconnections.

Poor Governance and Corruption impede

growth and professional development .

Absence of rational pricing of energy and

effective regulatory oversight creates

inefficiency and wastage.

Little cross-border trade in electricity

[except India-Bhutan trade].

No cross-border trade in natural gas.

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Challenges for the

Energy Sector in

South Asia

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CHALLENGES FOR SOUTH ASIA …

Countries in South Asia are facing a triple

challenges of energy security, climate change

and energy access

E.g., energy access in India is only about 67%,

which means about 400 million people are without

access.

Access situation is even worse in other

countries in South Asia.

Mobilization of resources for energy

infrastructure is a huge challenge.

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…CHALLENGES FOR SOUTH ASIA…

Latent demand & supply energy gap is a

major energy security issue for the region

despite its fastest growing GDP growth

rate of about 6%.

International Energy Agency (IEA) has

projected highest growth rate of energy

consumption by 2020 in South Asia.

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…CHALLENGES FOR SOUTH ASIA…

Despite impressive macro-economic growth,

the energy sector in South Asia:

has failed to keep pace with economic

growth,

faces chronic supply shortage and poor

quality of service,

cannot ensure access to commercial energy

sources to half of the 1.56 million people.

Energy constraints, on the average, restricts

GDP Growth by 2% - 3%.

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…CHALLENGES FOR SOUTH ASIA

Appropriate Energy sector reforms are

essential for ensuring sustained growth of

the sector and optimal development

through –

improving the efficiency and quality of service,

commercial viability of energy industry,

institutional and governance

arrangements,

accountability of service providers and

investment climate

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Opportunities,

Prospects &

Challenges

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OPPORTUNITIES: IN THE REGION AND

THE NEIGHBOURING AREAS…

The following factors create significant opportunities for cooperation and trade in the energy sector in South Asia

Variety of resource endowments,

Development needs,

Demand patterns among the countries in the region and its neighborhood,

Necessity to create world's largest integrated energy market due to presence of energy resource surplus countries –

Nepal, Bhutan in SA region,

Central Asian countries, Iran, Myanmar in the neighborhood.

Benefit from energy export-led growth and implementation of large-scale regional projects

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Iran has the highest reserve of natural gas,

Turkmenistan, Uzbekistan and Myanmar

have also substantial reserve of natural gas,

Iran has quite substantial oil reserve .

Kazakhstan and Myanmar has also

substantial oil deposit,

Kazakhstan, Tajikistan and Uzbekistan have

substantial coal reserve,

Tajikistan, Kyrgyzstan and Myanmar have

huge potential of hydropower.

…OPPORTUNITIES: IN THE REGION

AND THE NEIGHBOURING AREAS. 4

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PROSPECTS FOR TRADE IN EASTERN

PART OF SAARC

Imp

orte

r

Ind

ia

Bh

uta

n

Nep

al

B’d

esh

S. L

an

ka

My

an

ma

r

Ind

ia

X

Hydro

power

Hydro

power Gas & Power

Peak Power

support

Gas &

Power

Bh

uta

n

Dry Time

support

X

Resourc

e and

seasona

l

shortag

e

Small amount

of Thermal

Power and Gas

Via India

No Scope

Unlikely,

Small

Market

Nep

al

Thermal

Power ,Dry

Season

support

Similar

Resource

and

seasonal

shortage

X

Small amount

of Thermal

Power and Gas

Via India

No Scope

Unlikely

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PROSPECTS FOR TRADE IN EASTERN

PART OF SAARC

Imp

orte

rs

Ind

ia

Bh

uta

n

Ne

pa

l

B’d

esh

Sri L

an

ka

My

an

ma

r

Ban

gla

desh

Sharing

Reserves,

Electricity

Swap.

Hydropo

wer Via

India

Hydropo

wer Via

India

X

No Scope

Unlikely

Sri L

an

ka

Dry

Season

and

Thermal

Power

support

Unlikely

Unlikely

Unlikely

X

Unlikely

Myan

mar

No Scope

Uncompe

titive

Uncompe

titive

Uncompetiti

ve

No Scope

X

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PROSPECTS FOR TRADE SAARC

Importer CARs Turkme

nistan Iran

Afghanis

tan Pakistan India

Central

Asian

Regions

(CARs)

X

Some

Gas

Export &

mutual

electricit

y support

Unlikely No Scope

Limited

Emergenc

y Support

No Scope

Turkmeni

stan

Mutual

Electricity

Support

X No Scope No Scope No Scope No Scope

Iran

Limited

Power

Exports

Possible

Power

Export

Ongoing

No Scope

Afghanist

an

Power

Export

Ongoing

and

Should

Grow

Power

Export

Ongoing

and

Should

Grow

Power

Export

Ongoing

and Should

Grow

X

Small

cross

border

Power

Export

Possible

No Scope

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PROSPECTS FOR TRADE SAARC

Importin

g CARs

Turkmenist

an Iran

Afghanis

tan

Pakista

n India

Pakistan

Potential

Power

Exports

Significant

Potential for

Gas Export

Significan

t

Potential

for gas

export ,

cross

border

electricity

trade

could

grow

No scope ,

Transit of

electricity

and Gas

X

Mutual

Short

Term

support

in power

India

Gas,

power

export

Significant

Potential for

Gas Export

Significan

t

Potential

for Gas

Export

No Scope

,Transit

of Gas

Mutual

short

term

trading

support

in power

, transit

of gas

X

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SOME REGIONAL PROJECTS:

PROSPECTS

Import of hydropower from Central Asia

to Afghanistan and Pakistan;

Regional Trade of hydropower from Nepal

and Bhutan through electricity

interconnections between India - Sri

Lanka and India - Bangladesh;

Gas imports from Central Asia [TAPI],

Iran {IPI}, and Myanmar [Myanmar to

India Pipeline Across Bangladesh]

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IPI PIPELINE… 4

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…IPI PIPELINES…

Conceptualized in 1950s by a Pakistani civil engineer and conceived by Indian and Iranians in 1989, preliminary agreement was signed in

1995 between Iran and Pakistan

1999 between India and Iran

2775 KM [1724 Miles] 56” OD Trans-border Gas Transmission Pipeline .

Design Capacity : 4 BCM

Discharge : 1 Tcf per annum

National Iranian Oil Company, Sui Northern Gas Pipeline Companies, Sui Southern Gas Company, GAZPROM

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TAPI PIPELINES… 4

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…TAPI PIPELINES…

A Gas Pipeline Framework Agreement,

signed by representatives of the four

participating nations on April 25, 2008 in

Islamabad, envisaged construction to start in

2010, supplying gas by 2015.

1,000-mile route from Central to South Asia -

Turkmenistan (Dauletabad) – Afghanistan

(Heart, Helmand – Kandahar) – Pakistan

(Quetta and Multan) – India (Fazilka).

ADB on the basis of its study reported that the

estimated capital cost was $7.6 billion and it

would consider financing the project

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…TAPI PIPELINES

Four country framework agreement installed.

India and Pakistan signed GPSA with

Turkmenistan

Transit tariff agreement among transit countries

were under negotiation

But in efforts to attract investors for build, own

and operate the about 8 Billion dollar pipeline

the project sponsor ADB got very poor response.

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ROADBLOCKS IN TRANSBORDER

ENERGY TRADE Geopolitics

Bilateral political irritants – Border disputes,

Water sharing issues, etc.

Lack of political will and commitment

Insurgency and security concerns

Absence of effective independent regulatory

institutions for creating level play ground for

private and public sector companies.

Lack of effective public –private partnership.

Corruption and political interference

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Suggestions &

Recommendations

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SUGGESTIONS & RECOMMENDATIONS

South Asian countries

Need to institutionalize an integrated

energy planning approach (IEPA);

Need to undertake serious efforts and

appropriate measures to improve energy

efficiency at all levels;

Need to take appropriate measures to

reduce demand for liquid fuel for saving

money and protecting environment from

carbon emission;

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SUGGESTIONS & RECOMMENDATIONS

Need to harness hydro-power

potentials in Pakistan, India, Nepal

and Bhutan on priority over other

commercial energy sources;

Need to avail the benefits of importing

energy from neighboring countries,

especially from Central Asia, Tran and

Myanmar through establishing gas

and power grid connected to Central

Asia and South Asia

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SUGGESTIONS & RECOMMENDATIONS

Need to implement reforms in the sector

through

segregation of the regulatory functions

from the government and vesting them in

an independent regulatory commission,

Unbundling the various activities of

vertically into distinct and separate units

based on functions,

Tariff reforms

Private sector participation

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SUGGESTIONS & RECOMMENDATIONS

Sharing Knowledge and Expertise

Easing Visa formalities for Energy

Professionals and experts of South

Asian Country nationals

Creation and accessibility of

regional energy data base

Exploring funding for clean

technologies

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SUGGESTIONS & RECOMMENDATIONS…

Action Plan

Setting up a South Asian

Regional Energy Foundation

with Government and

representatives

Setting up a South Asian

Investment Promotion Fund

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….SUGGESTIONS & RECOMMENDATIONS

Setting up a mechanism to study

in details and report on

desirability and feasibility of:

Regional energy grid

Regional gas grid

Regional petroleum strategic

reserve

South Asian Citizen’s Forum of

Energy

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