India Bangladesh Electricity Agreement
The lack of a large national electricity market in Nepal and the uncertainty in the Indian market have led foreign builders to abandon hydroelectric projects in Nepal. In early 2016, Norwegian energy producer Statkraft Plan abandoned the project to develop the 650 MW Tamakoshi III hydroelectric project in The Eastern District of Dolakha in Nepal. In 2018, CWE Investment, a subsidiary of China Three Gorges, announced an agreement to build a 750 MW West Seti hydroelectric project in western Nepal, citing a lack of clarity as to who would buy the electricity. In addition, India signed an agreement with Bangladesh in April to build a 129.5 km pipeline between Siliguri and Parbatipur for diesel transport between India and Bangladesh. The pipeline project, with a capacity of 1 million tonnes per year, will extend from the terminal marketing siliguri of Numaligarah Refinery Ltd in India to the pay-as-you-go depot of the Bangladesh Petroleum Corporation. The firm`s approval means that the NEA will be able to negotiate electricity with both countries by setting the price on the basis of competition. But relations between Kathmandu and New Delhi are rocky. In 2015, Nepal accused India of imposing a border blockade and stifling supplies of fuel and other important items from within the country. Although a power agreement was signed in 2014 to ease cross-border flows, the process was blocked by the lack of a political framework on both sides. But India would have hope for renewable energy. The government wants to install 175 GW of renewable energy by 2022 to meet its obligations under the Paris climate change agreement, said Prasai, a former representative of the Asian Foundation in India. “Hydroelectric power plants can produce electricity permanently, while solar and wind are intermittent.
[And] it takes several hours for a coal-fired power plant to start generating electricity,” he said. “Nepal`s hydroelectric power can therefore serve as an intermediate solution in India`s energy mix.” KATHMANDU — Nepal`s electricity export plans are fragile because relations with India, its client, have been successful under the communist government of Kathmandu. Bangladeshi Prime Minister Tawfiq-e-Elahi Chowdhury`s energy advisor and India`s High Commissioner to Bangladesh Riva Ganguly were present at the signing of the agreement with other senior government officials. The NEA has long been preparing to sell short-term electricity on the Indian energy stock market. On the energy stock market in India, like equities, electricity can be bought and sold in real time. With the authorization, the NEA will be able to make real-time electricity in India and Bangladesh It is mandatory for the NEA to obtain government authorization for cross-border electricity exchanges, reports The Himalayan Times. Nepal`s current peak electricity needs are 1,300 MW. During the dry winter months, when reduced water flows limit hydroelectric production, it imports 500 MW from India. When the projects are completed next year, they will almost double Nepal`s hydroelectric capacity from 1,100 MW to 2,000 MW. This would give it an energy surplus of 500 MW during the monsoon season. Regional cooperation in the field of electricity can include sharing cross-border infrastructure, creating regional electricity producers and strengthening competition in regional markets.
This would require, among other things, investments in new border links and the development of harmonized codes, policies and rules for the overall growth of the energy sector. Given the considerable potential of electricity generation in South Asia, this strategy is expected to play an important role in any future regional cooperation strategy in the energy sector.