Energy sharing in the South Asian context

To many it would be highly idealistic, ambitious and impracticable at least now, but it is a fact that Pakistan and Nepal have the potential to meet the electricity needs of the whole South Asian region for over one hundred years with their giant coal and hydro reserves.
To the belief of many again, it is practicable, provided India, Pakistan, Nepal, Bangladesh and international multilateral bodies converge to a one-point agenda if "freeing South Asia from power shortages for good". From all, it expects visionary leadership, courage, commitment and of course, cheap money from international creditors and grants from donors.
Sustainable development, in today's world, is simply unimaginable without a continuous supply of electricity either for household, manufacturing, industrial or service sectors of the economy. In the South Asian context, its significance is rather more striking where almost 42% population is surviving below the poverty line.
Food security is precarious, especially after the recent international financial meltdown. Poverty, hunger, disease, terrorism and ignorance levels have been unchecked and not a single country of SAARC or South Asia is immune to it. While all this is hovering around, South Asian economies are caught in the cauldron of power shortages and massive load shedding. The archaic system of distribution and transmission is severely rendering line and pilferage losses, adding miseries to millions daily.
In 2004, the World Bank estimated that in India alone, people steal electricity worth of $4bn. In 2005, Transparency International estimated that Indians paid $480 million as bribes "to put in new connections or correct bills". Things in Pakistan are also roaringly unwell. In a recent report that appeared on 17th November 2009 by Transparency International, Pakistan record in corruption has become worse as it came 42 out of 47 of the most corrupt countries of the world in.
As things now stand, all countries of South Asia are in the grip of a sharp demand and supply gap in the power sector. India, with a 155,000 MW generation capacity, is in need of further 65000MW to catch up with the high pace of development. It is being quoted that by 2020, India will be requiring 300,000MW. Pakistan, with a production capacity of 19600MW, is suffering from an average shortfall of 3600MW. Bangladesh produces 4148MW and needs 1352MW more.
According to The Financial Express, the Prime Minister of Bangladesh said in January 2009, in Jatya Sangsad, "Bangladesh will be self-sufficient in power by 2021 and 100 % of people of the country will get electricity according to the government's vision". Let's see which way the promise of Bangladesh's government leaps.
South Asian political history is plagued with myriad broken promises and pledges. In Pakistan, every Government has declared dismantling the "begging bowl". In reality, Pakistan is slipping among the highly indebted nations of the world. Indian Prime Minister Nehru, twice on the floor of the United Nations, promised a plebiscite to its people dwelling in Jammu and Kashmir but that never happened.
Presently, only 45% of Bangladesh's population has access to electricity and per capita power consumption is 172 Kwh, compared to 325 Kwh in Sri Lanka, 480 Kwh in Pakistan, 665 Khw in India, 17179 Khw in Canada, 1338 Khw in USA, 11126 Khw in Australia, 8076Kwh in japan, 7689 Kwh in France, 7030 Kwh in Germany, 6206 Kwh in UK, 5642 Kwh in Russia and 5644 Khw in Italy. Nepal, a tiny economy, produces 617.48MW, but needs 400MW in order to end 14 hours load shedding in a day.
Only Pakistan and Nepal have the potential capability, not only to cater domestic needs of electricity, but to also supply all neighbouring countries like Bangladesh, India and Bhutan. Coal - the black gold, is found in all four provinces of Pakistan. Ironically, Pakistan that has fourth-largest coal reserves in the world is importing 3.4 million tons of coal per annum for the cement industry and other uses.
According to the Geological Survey of Pakistan (2005), Pakistan has huge coal resources, about 185 billion tonnes, out of which 3.3 billion tonnes are in the proven/measured category and about 11 billions are indicated reserves, the bulk of it are found in the Sindh province. Thar coal reserves are one of the world's largest lignite deposits discovered by the Geological Survey of Pakistan in 1992, spread over more than 9,000 sq. kms and adequate to meet the country's fuel and power requirements.
Thar coal, alone, can produce 100,000MW for 300 years if utilised optimally. Unfortunately, despite its abundance, coal as a source of power generation is yet to be tapped exponentially in Pakistan. According to Haider Rizwan (2008), the share of coal in energy supplies for Pakistan is 7.6% during 2004-05. Coal consumption during 2004-2005 was: Brick Kilns (49.5%), Cement Industries (32.1%), Power (2.3%) and Coke use (16.1%).
Natural gas (50.3%) followed by oil (29.4%), hydro (11%), coal (7.6%), nuclear (1.2%) and LPG (0.4%) are major sources of energy production in Pakistan. The world scenario is, however, visibly different. Forty-eight percent of the world energy is generated through coal, whereas China and India produce 70% and 54% from it respectively. This time, the Sindh Government seems pretty serious and has established the Thar Coal and Energy Board (TCEB) headed by the Chief Minister Sindh.
The TCEB has recently given a "go ahead" to some small projects that will produce electricity of upto 2450MW power. By 2020, these will be capable of producing 10,000MW. The power generated through this project will cost Rs 2.5, far less than the cost now of Rs 8-9 per unit. The Sindh government has emerged to shoulder the ever-widening need of electricity that may jump to 54000MW by 2015. According to the Sindh Government, both the provincial and federal governments will invest Rs 80 billion on infrastructure development to facilitate easy access to this area.
Nepal is not different from Pakistan with a scarcity of economic resources. If Pakistan has the largest coal reserves, Nepal has the largest hydro-power potential in South Asia. Presently, Nepal is producing 617.48MW, including 55 MW that comes from thermal energy. In order to minimise huge demand and supply gap, Nepal is importing 110 MW from India. Nepal possesses 83000 MW hydroelectric power potential, although only 50% is economically feasible, according to The Daily Star dated November 14, 2009.
The BBC presented a report in July 2009, projecting Nepal's ambition for producing a mega-project of 42000 MW, provided India agrees to extend the gridline over its territory. By 2013, Nepal envisions exporting electricity to India, just to reverse its status of an electricity importer from the Bihar province of India. Cash-strapped Nepal is facing acute load shedding these days, which goes for 14 hours in some parts.
Recent floods have seriously scuttled its supply of electricity from India, dampening its energy needs and sobering the pace of economic development. India's energy crisis has a positive correlation to its lofty ambitions as a world economic giant. Like its size, its demand- supply gap in the energy sector is the biggest in South Asia.
Somini Sengupta (2009) has underscored this fact in a recent article published in the New York Times, by inviting the attention of the Indian authorities "there is no doubt that India's electricity crisis is becoming all the more acute for the roaring pace of the country's economic growth and the new material aspirations it has generated".
Like Pakistan's ministry of water and power, the Indian planning commission is failing to achieve the target it had set in the 11th five-year plan, predicting no end to the massive power breakdowns. The Indian government committed to nation to provide "electric connections to all by 2009" which seems unfulfilled. The target of achieving 78700 MW is too distant to attain. Surya P Sethi, principal advisor to the Indian Planning Commission said to media men recently "the power generation target of 78,700 MW is not achievable by 2012.
If everything goes well, then generation capacity of around 40,000MW would be added". Pakistan's ministry of water and power is also failing on the same score. On the other side, McKinsey Global Institute has predicted recently that by 2025, India will surpass Germany as fifth largest power consumption market in the world. India is just adding electricity in the national grid at the pace of 6%, far less than China, Malaysia and Turkmenistan. Singapore excels in the region with 10,000MW capacity to offset 4753MW peak hours load.
As a visiting delegate in Singapore, we were briefed by the management of Seneko Power Generation in June 2009. According to The Daily News, in India's case, the generation mix is predominantly thermal, which is 65 percent followed by hydro-electricity 26 percent, nuclear 3 percent and the balance 6 percent is from solar, wind, biomass etc.
In the recent past, India has explored all other alternative sources of power generation but the contribution from wind and nuclear is just 4% and 3% respectively. Although coal is dominating the energy sector, yet more than one third of India's coal plants do not meet the national emission standards. Chronic power shortages and heavy voltage fluctuations have just enhanced the cost of business in India.
A World Bank survey, conducted in 2004, found that 60% corporations in India have their own generators as stopgap arrangements. India clinched an accord with the US in October 2008 to enable sale of civilian nuclear technology to India and also got an exemption from the Nuclear Supplier Group, which controls international atomic commerce, to purchase nuclear plants and fuel.
In order to enhance its capability, the Indian PM signed an agreement with the President of Namibia on August 31, 2009 to buy uranium to expand its planned expansion in nuclear energy. According to AFP, Namibia is ranked among the top producers of uranium after Canada, Kazakhstan, and Australia, with an output of 4,366 tonnes of uranium oxides. India and Bhutan signed a protocol, in 2006, by which Bhutan will export 10,000MW electricity to India by 2020.
According to the "Overview of Energy Policies of Bhutan" (2009), its generation capacity is of 1484 MW and thus 75% is exported to India as Bhutan has huge hydropower potentials and can produce 32300MW. This export item helps Bhutan's favourable balance of trade with India. Hydropower exports to India have boosted Bhutan's overall growth, even though GDP fell in 2008 as a result of a recessionary spiral in India, its predominant export market.
New hydropower projects will be the driving force behind Bhutan's ability to create employment and sustainable development in the days to come. Both Pakistan and Nepal have ratified Kyoto Protocol and are enthusiastic parties to the UNFCCC. They are expected to comply with international commitments and local laws on the safety of the environment, whenever they poise to construct projects to meet the needs of neighbours, especially India.
For coal-based projects CCS (Carbon, capture and storage) technology is highly reliable which does raise the eyebrows of the environmentalists. By using the same technology, Japan produces 28% electricity from coal and is the world's largest steam coal producer. Norway produces 46%of electricity from coal, mostly imported. Pakistan and Nepal are also "blend countries", that qualify for the World Bank Group (IDA grants, where not a single penny is payable) since 2003.
The Indian policy on energy needs to be more explicit. Despite its initial willingness to join the Iran-Pakistan-India gas pipeline, India is dithering on the pretext of security concerns in Pakistan. At the same time, it demands access to Afghanistan, en route to Pakistan. The perception in Pakistan is that in case that tripartite gas link is established, Pakistan will get $700-900 m annually as royalty, which India does not like going in Pakistan's kitty.
There are hundreds of other examples of electric ties and power-sharing among the countries of Africa, Latin America, Central Asia and South East Asia. Brazil purchases electricity from Paraguay, China from Kyrgyzstan, Pakistan from Iran, Malaysia from Singapore, Mongolia from China and Russia and Thailand from Laos.
South Asian leadership must rise to the occasion to initiate links on electricity sharing to eliminate poverty in the region. South Asia is already "off the track" on MDGs, as per the World Bank 2008 report. "You can lead a horse to water, but you cannot make it drink". The writer is a development expert based in Islamabad with specialisation in international development and management.
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