Prospects of energy trading in South Asia
KHILENDRA
BASNYAT
The demand for electricity is accepted to rise at the of 6.7 percent per annum in South Asia. This is chiefly due to high population growth, increasing income and rural electrification.
Due to scant utilization, the people of this region are facing the brunt scarcity of energy for household and industrial activities. If the present trend persists, there will be more energy crisis in this region in the years to come. In order to reduce growing energy crisis, this region could take lesson from ASEAN in energy co operation. This is not to say that this reason has no history of energy cooperation at all. Actually, this region has some instances of mutual cooperation in this sector. But it is not up to the desired level. In fact, the rising energy demand scenario in this regain gives added incentives for coordination in energy crisis.
Most South Asian countries have the advantage of being on a single land mass which is convenient for planning and developing integrated power infraintructure such as power grid and pipelines. Such a network of electricity grid and gas pipeline will enhance energy security, reduce fuel costs and help in the more efficient harnessing of energy sources. For small countries like Nepal and Bhutan, regional cooperation is indispensable because the only market that is available for their power is India which has great demand of electricity.
South Asian countries mainly rely on biomass fuels. However with the growing levels of per capita energy consumption; other energy sources will have to be exploited. This requires joint efforts from all these countries. For example, hydroelectricity potential can be fully utilized only if an integrated market is developed. Not only this, gas pipelines are economically viable prospects for this region.
In South Asia, there is potential for trading energy which should be exploited in such a way that the energy gap within this region is bridged. Apart from this, industrialization and economic development in this region cannot be expected without the cost-effective sources.
Poverty is a major problem in all South Asian countries. Despite some endeavors in these countries, millions of people are not able to satisfy their basic needs. They are deprived of adequate nutrition, decent housing and adults die everyday from treatable diseases because they lack acess to or cannot afford the necessary medicines and care.
In South Asia, the pattern of energy consumption in the manufacturing sector has changed during the past decade. This is due to a rise in the relative price of energy, the emergence of new technologies, the imposition of environmental constraints and other factors.
The Arab oil embargo of 1973-74 and the quadrupling of oil prices by OPEC were some factors contributing to South Asian economic difficulties. These events have served to underscore the importance of the energy sector in shaping general economic conditions. Accordingly, quantitative studies of the macro economic impacts of potential energy development are essential for formulating effective energy policies.
Actually, South Asia has some prospects to move toward self-sufficiency in energy through trading. There are many ways in which self-sufficiency can be achieved. For example, new and moderate technology in coal mining can produce oil and gas from coal. Likewise, sugarcane offers enormous potential as a renewable and exportable resource.
As most countries of this reason have similar structure of their economies, a coordinated approach would be in the larger interest of the people. By pooling energy resources