With the growing need of energy in the South Asian region, there is a constant attempt of building a synergy in the region to create an energy grid between energy exporting and energy importing countries in the region.Given the vast renewable hydropower potential of Bhutan and Nepal, development of hydropower and cross-border interconnections have the potential of these countries to improve energy supplies, promote navigation, alleviate floods and encourage connectivity, and add significantly to socio-economic development.[i]
Electricity demand in the region is expected to grow at an average rate of 6 percent per year.[ii] The hydropower potential of Nepal, Bhutan and India is 150 gigawatts (GW), out of which only 17 percent is currently utilised.[iii] This paper will try to identify the growing synergy between Bangladesh and Nepal on energy cooperation.
Bangladesh, one of the fastest growing economies of the world, has been looking forward to expand its energy resources. As per World Bank data, countries in the region, have been striving hard to achieve near-universal access to electricity; Bhutan has achieved 99 percent, India 97.8 percent, Bangladesh 92 percent and Nepal 89 percent.[iv]
Nepal has a theoretical potential of generating 83,000 MW of hydropower, out of which 42,000 megawatt (MW) is economically feasible, which it can export.[v]Geographically, the distance between Nepal and Bangladesh is 22 km. The distance by road from Banglabandha in Bangladesh to Kakarbhita in Nepal is 39 km.[vi] While Nepal and India work towards building a transnational grid in the region,[vii] Nepal and Bangladesh have working together in utilising the grid, building greater regional integration.
On August 2018, Nepal and Bangladesh signed an energy cooperation agreement to oversee investment, development and trade in hydroelectricity between the two countries. Under this arrangement, it was agreed that Bangladesh will import up to 9,000 MW of hydropower from Nepal by 2040.[viii] The agreement also facilitated the creation of a Joint Working Group (JWG) to facilitate cooperation and a Joint Steering Committee (JSC) to review the progress of the JWG. The two committees have been tasked to meet regularly and expedite the implementation of the agreement. The JSC till date has met thrice, and the JWG has conducted several rounds of deliberations.
Nepal has proposed to export 200 MW of electricity to Bangladesh utilising the existing power-transmission through India.[ix]During the third Bangladesh Nepal JSC virtual meeting on September 14, 2021, discussions involved the progress of importing 500MW of electricity Nepal's under-construction 900MW GMR Upper Karnali Hydropower Ltd.[x]
As per a statement issued by the Bangladesh Ministry of Power, Energy and Mineral Resources on September 14, 2021, Nepal government, while conducting a survey, has identified five potential projects in Bangladesh, where both the countries can work towards further power generation and power transmission within the region.[xi]Both Bangladesh and Nepal have been exploring where Bangladeshi companies can invest in the hydropower sector in Nepal, which would further bolster cooperation and development of their respective powers sectors.
The 15th Five-year Development Plan (2019/20-2023/24) of Nepal has set targets to make electricity an exportable commodity. Nepal hopes to raise its power generation to more than 5000 MW from its current level of 1250 MW of electricity in five years, which would make Nepal an energy surplus country. Bangladesh wants to invest, produce and import surplus energy from Nepal.[xii]
Energy cooperation between the two countries will gather momentum with the signing of a tripartite agreement that will include India. It should be noted here that the tripartite agreement among Bangladesh Power Development Board (BPDB), Nepal's GMR, and India's NTPC Vidyut Vyapar Nigam Ltd (NVVNL) is in its final stage of discussion.[xiii]
While Bangladesh’s is exploring all avenues to meet their increasing energy demand to support its industrial growth, it also wants to diversify the power-mix so that over-reliance on natural gas is minimised. Recent steps of expanding its coal-based power plants have not been welcomed by environmentalists’ groups. Moreover, environmental and resettlement issues have surfaced, prompting the government to shift its focus on renewable energies including importing energy from her neighbours.[xiv] Furthermore, non-renewable natural gas is contributing 75 percent of Bangladesh’s total fuel consumption, another major reason for which Bangladesh is looking forward to import energy from other countries so that the depleting gas reserve can be slowed.[xv]
With rising energy cooperation between countries in the region, it will strengthen the idea of establishing a common energy corridor that results in huge economic benefits for all the neighbouring countries building a future with shared prosperity.It will facilitate in bringing private investment, public sector participation, cross-border transmission line construction, research, development and technology transfer and sector-specific training and development programmes.
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*Dr Dhrubajyoti Bhattacharjee is a Research Fellow at the Indian Council of World Affairs, New Delhi.
Disclaimer: The views are of the author.
Endnotes
[i]Cecilia Tortajada and David J Molden (2021), “Hydropower as a catalyst for regional cooperation in South Asia”, International Journal of Water Resources Development, Volume 37, Issue 3, pp. 362-366
[ii]“Southeast Asia Energy Outlook 2019”, Analysis, IEA, October 2019,https://www.iea.org/reports/southeast-asia-energy-outlook-2019 as accessed on September 16, 2021
[iii]“Kharbanda, V. V. ‘Energy Integration in South Asia Region.’ In HAPUA-UNESCAP Workshop. USAIDSARI/EI Jakarta, Indonesia, 2017
[iv]Access to electricity (% of population), World Development Indicators, World Bank, https://data.worldbank.org/indicator/EG.ELC.ACCS.ZS?locations=IN-BT-TH-LK-BD as accessed on September 16, 2021
[v]“Nepal India Cooperation on Hydropower (NICOH)”, Independent Power Producers’ Association Nepal
Confederation of Indian Industry, January 2006, p. 1, https://cii.in/WebCMS/Upload/CII%20-%20Nepal%20India%20Cooperation%20on%20Hydropower.pdf as accessed on September 16, 2021
[vi]“Nepal-Bangladesh ties: It’s time to assess the potential for mutual benefits”, Online Khabar, August 19, 2021, https://english.onlinekhabar.com/nepal-bangladesh-ties-its-time-to-assess-the-potential-for-mutual-benefits.html as accessed on September 16, 2021
[vii] Nepal Electricity Authority (NEA) on September 15, 2021, signed an MoU with the state-run Power Grid Corporation of India (POWERGRID) for the construction of a second, transnational 400kV transmission line from Butwal to Gorakhpur. For transfer of bulk power, the first interconnection between India and Nepal of a 400kV D/C transmission line is already functional through Dhalkebar (Nepal) - Muzaffarpur (India). India and Nepal has been working on the further construction of 400kV D/C Dhalkebar (Nepal) – Sitamarhi (India) line, 132kV D/C Nanpara, Bihar (India) –Kohalpur (Nepal), stringing of second circuit of 132kV line Kataiya (India) – Kushaha (Nepal) and 132 kV Raxaul (India) – Parwanipur (Nepal) transmission lines. “India, Nepal sign power exchange deal”, Nepali Times, September 11, 2021, https://www.nepalitimes.com/latest/india-nepal-sign-power-exchange-deal/ as accessed on September 16, 2021; Interconnection with neighbouring countries, Ministry of Power, Government of India, https://powermin.gov.in/en/content/interconnection-neighbouring-countries as accessed on September 16, 2021
[viii]“Bangladesh-Nepal energy cooperation opens up new possibilities”, The Himalayan Times, September 08, 2020, https://thehimalayantimes.com/business/bangladesh-nepal-energy-cooperation-the-horizon-of-new-possibilities/%20Read%20more%20at:%20https://www.southasiamonitor.org/intra-regional/bangladesh-nepal-energy-cooperation-opens-new-possibilities as accessed by September 16, 2021
[ix] “Nepal proposes 200MW power export to Bangladesh”, Financial Express, September 15, 2021, https://thefinancialexpress.com.bd/trade/nepal-proposes-200mw-power-export-to-bangladesh-1631673496 as accessed on September 16, 2021; “Hydropower projects in Nepal: Bangladesh’s investment decision after survey”, Dhaka Tribune, September 14, 2021, https://www.dhakatribune.com/bangladesh/2021/09/14/hydropower-projects-in-nepal-bangladesh-s-investment-decision-after-survey as accessed on September 16, 2021
[x] “Nepal proposes 200MW power export to Bangladesh”, Financial Express, September 15, 2021, https://thefinancialexpress.com.bd/trade/nepal-proposes-200mw-power-export-to-bangladesh-1631673496 as accessed on September 16, 2021; “Hydropower projects in Nepal: Bangladesh’s investment decision after survey”, Dhaka Tribune, September 14, 2021, https://www.dhakatribune.com/bangladesh/2021/09/14/hydropower-projects-in-nepal-bangladesh-s-investment-decision-after-survey as accessed on September 16, 2021
[xi]“Hydropower projects in Nepal: Bangladesh’s investment decision after survey”, Dhaka Tribune, September 14, 2021, https://www.dhakatribune.com/bangladesh/2021/09/14/hydropower-projects-in-nepal-bangladesh-s-investment-decision-after-surveyas accessed on September 16, 2021
[xii]“Bangladesh-Nepal energy cooperation; the horizon of new possibilities”, The Himalayan Times, September 07, 2020, https://thehimalayantimes.com/business/bangladesh-nepal-energy-cooperation-the-horizon-of-new-possibilities as accessed on September 16, 2021
[xiii] “Nepal proposes 200MW power export to Bangladesh”, Financial Express, September 15, 2021, https://thefinancialexpress.com.bd/trade/nepal-proposes-200mw-power-export-to-bangladesh-1631673496 as accessed on September 16, 2021; “Hydropower projects in Nepal: Bangladesh’s investment decision after survey”, Dhaka Tribune, September 14, 2021, https://www.dhakatribune.com/bangladesh/2021/09/14/hydropower-projects-in-nepal-bangladesh-s-investment-decision-after-survey as accessed on September 16, 2021
[xiv]“Bangladesh-Nepal energy cooperation; the horizon of new possibilities”, The Himalayan Times, September 07, 2020, https://thehimalayantimes.com/business/bangladesh-nepal-energy-cooperation-the-horizon-of-new-possibilities as accessed on September 16, 2021
[xv]“Bangladesh-Nepal energy cooperation; the horizon of new possibilities”, The Himalayan Times, September 07, 2020, https://thehimalayantimes.com/business/bangladesh-nepal-energy-cooperation-the-horizon-of-new-possibilities as accessed on September 16, 2021