Economics of Regional Energy Cooperation: Nepal Case Study
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Economics of Regional Energy Cooperation: Nepal Case Study Dr Priyantha D C Wijayatunga Head, Portfolio Management Unit Nepal Resident Mission Asian Development Bank 6 th Japan-SAARC Energy Symposium 6-7 March 2013 Kathmandu, Nepal
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Economics of Regional Energy Cooperation: Nepal Case Study. Dr Priyantha D C Wijayatunga Head, Portfolio Management Unit Nepal Resident Mission Asian Development Bank 6 th Japan-SAARC Energy Symposium 6-7 March 2013 Kathmandu, Nepal. Outline. Need for Regional Cooperation - PowerPoint PPT Presentation
Transcript of Economics of Regional Energy Cooperation: Nepal Case Study
Economics of Regional Energy Cooperation: Nepal Case Study
Dr Priyantha D C WijayatungaHead, Portfolio Management Unit
Nepal Resident MissionAsian Development Bank
6th Japan-SAARC Energy Symposium6-7 March 2013
Kathmandu, Nepal
Outline Need for Regional Cooperation Regional Energy Trade Study India-Nepal Interconnections Economic benefits Final Remarks
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Regional cooperation? Wide variation in resource endowments
Hydropower, coal, natural gas and other renewable energies
Sharing of low cost energy resources Full potential not exploited
Economic opportunities energy exporting countries Enhanced opportunities for climate change
mitigation Single fuel dominance
Energy resource diversification and energy security Acute power shortages
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Energy SectorTraditional Fuel
UseEnergy Access
Bang
la...
Bhut
anIn
dia
Nepa
lSr
i Lan
ka
0%
20%
40%
60%
80%
100%
Cont
ribut
ion
of T
radi
-tio
nal F
uels
Afgh
anist
an
Bang
lade
sh
Bhut
an
Indi
a
Mal
dive
s
Nepa
l
Paki
stan
Sri L
anka
0%20%40%60%80%
100%120%
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Energy Sector ….Demand Supply Gap
Bang
lade
sh
Bhut
an
Indi
a
Nepa
l
Sri L
anka
0%20%40%60%80%
100%
Hydro Liquid Pet Gas Coal Other
Generation Composition
Ban
glad
esh
Bhu
tan
Indi
a
Mal
dive
s
Nep
al
Pak
ista
n
Sri
Lank
a
0.00%
20.00%
40.00%
60.00%
Dem
and
Sup
ply
Gap
(%)
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Energy Sector …. Per Capita
ResourcesElectricity Supplies
• Region to add about 63000MW of coal power (2012-2017)
• Will generate about 410 TWh per year– About 390 million CO2
emissions
Bang
lade
sh
Bhut
an
Indi
a
Nepa
l
Sri L
anka
0.00
40.00
80.00
120.00
160.00
200.00
Hydropower (GW per 100 persons)Coal (tons per person)Gas (tcf per 100 persons)
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Short distances to connect
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SAARC Regional Energy Trade Study (SRETS) Proposed projects
India-Nepal power interconnections Dhalkebar to Muzaffarpur Gorakhpur to Butwal
Bangladesh-India power interconnection Western border of Bangladesh Assist Bangladesh to import power from India
Bhutan-India interconnections Catering increased hydropower development and
cross-border trade India-Sri Lanka interconnection Establishment of a regional power market
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Proposed interconnections
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India-Nepal interconnections
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India-Nepal Electricity Trade
2003
2004
2005
2006
2007
2008
2009
2010
2011
0
100
200
300
400
500
600
700
Import from India Export to India
Elec
tric
ity
(GW
h)
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Economic Benefits Benefits of regional cooperation
Dhalkebar-Muzaffarpur transmission line
Analysis carried out with an investment planning model Reduced integrated South Asia
transmission network of 40 nodes and 166 transmission lines
“with” and “without” project scenarios.
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Methodology Power transfer analysis based on load flow model of India-Bhutan-
Bangladesh-Sri Lanka (>3200 buses)
NATGRID optimisation with DC approx. to load flow using equiv network (40 nodes, 166 lines)
NATGRID run without interconnector
Benefit = Difference in cost without and with link
NATGRID run with interconnector
Equivalent network
Scenarios
Comparison of scenarios
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Economic Benefits ….. Generation investments
Based on generation plans of the individual countries
Transmission capacity and electricity demand projections Based on the national plans Extrapolated in certain cases
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Economic Benefits ….. Benefit of cross-border transmission
measured Reduced generation costs both
investment and operation Reduced cost of unserved energy
Due to increased overall effective generation capacity at the disposal of each of the countries.
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Economic Benefits ….. Project estimated to cost $186 million
inclusive of in-country transmission network strengthening to support 1000MW of cross-border flows
The study analysed Nepal reaching a generation surplus state by
2016/17 Nepal remains a deficit state even by then
Accrued benefits $ 105-215 million per year Cost of the transmission around $ 20 per year Interconnector highly beneficial in both
scenarios Benefits far higher in the latter
Final remarks Economic rationale for India-Nepal
interconnections is high High energy transfers Significant difference in economic costs
Additional benefits Climate change mitigation Improved reliability
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