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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