Linking South Asia with South-East Asia and synergizing regional/ - PowerPoint PPT Presentation

Session-VIII “ Linking South Asia with South-East Asia and synergizing regional/ sub-regional initiatives for Energy Cooperation ” August 31, 2018 New Delhi 1

Regional groupings: South Asia and Southeast Asia BBIN SAARC BIMSTEC Established in June 1997 Bangladesh Established in 1992 Maldives Bhutan GMS Afghanistan Sri Lanka Thailand Cambodia Nepal China* Vietnam Pakistan Myanmar Laos India Established in * Yunnan Province and Guangxi Established in 2001 December 1985 Philippines Brunei Malaysia Zhuang Autonomous Region ASEAN Established in August 1967 Singapore Indonesia There are five well established institutional mechanisms dealing with regional/ sub-regional cooperation amongst the South Asian and Southeast Asian countries in energy sector 2

Regional groupings: A comparative analysis Land area Share of Population Share of GDP (USD Share of Group (Square km) Global (Million) Global Billion) Global SAARC 51,10,113 3.94% 1,766.38 23.73% 2,892.48 3.81% BIMSTEC 48,75,783 3.76% 1,659.86 22.30% 3,060.13 4.03% BBIN 36,20,463 2.79% 1,516.90 20.38% 2,508.55 3.31% ASEAN 44,88,840 3.46% 638.62 8.58% 2,553.52 3.37% The regional groupings in South Asia (SAARC) and Southeast Asia (ASEAN) are comparable in terms of geographic area and GDP Regional Grouping Inflows (USD Billion) Outflows (USD T otal trade (USD Billion) Billion) SAARC 489.50 332.19 821.69 BIMSTEC 537.56 643.25 1,180.81 BBIN 300.59 414.28 714.88 ASEAN 1,085.70 1,151.83 2,237.53 ASEAN region is ahead of SAARC in international merchandise trade volumes and also in attracting foreign direct investment (FDI) to the region Source: World Development Indicators, 2017 3

Progress in terms of energy cooperation has been made across each of the regional grouping over the past few years… BIMSTEC regional group links the countries in South Asia and South East Asia The idea of regional co-operation Workshop on harmonization of mooted by Bangladesh, India, Sri Lanka Grid Standard was organized in and Thailand at a meeting in Bangkok Feb in New Delhi and in June 1997 2 Four more meetings of the Task Bhutan and Nepal joined the forum in The MOU on Grid Interconnection Force on BIMSTEC Trans-Power Feb 2004. Later in year, the first was finalized Exchange and Development Project summit was organized where the were held and hosted by member group was renamed as BIMSTEC countries 1997 1997 2004 2005 2006 2006 2006-14 2015 2017 The text of the MOU on the broad 1 Myanmar was admitted to the grouping framework for the implementation of during a special ministerial meeting in grid interconnections for promoting Bangkok and the grouping was named to rational and optimal power transmission BIMS - EC in the region was finalized First Meeting of Task Force for Agreement on the broad framework for grid interconnection is one of the key areas of BIMSTEC Trans-power Exchange and development in BIMSTEC region as far as Development Project in March energy cooperation is concerned First Ministerial Conference on Energy Cooperation was organized and BIMSTEC Energy Centre was constituted 4

The eastern region in South Asia has witnessed significant developments in cross border electricity trade Cross-border transmission interconnections in South Asia India - Nepal Key Insights • Various interconnections at 33 KV to 220 KV and also 400 KV Dhalkebar – ▪ India has existing bilateral Muzafarpur (1000 MW) • Power trade agreement signed in 2014 arrangements and cross-border India - Bhutan interconnections with Nepal (500 • Framework agreement for 5000 MW signed in MW), Bhutan (~1,400 MW), 2014 Bangladesh (600 MW) and Myanmar Bhut (3 MW) an Multiple new interconnections are ▪ Bangladesh under consideration across the region, Ind that is likely to step-up cross border ia India - Myanmar Myanma trade r • Supplying 3 MW India - Bangladesh ▪ Cross border transaction in electricity power through 11 500 MW HVDC back to • KV Moreh between BBIN countries is essentially back interconnection to be (Manipur) – Tamu augmented by 500 MW (Myanmar) Thaila through medium and long term 100 MW radial • interconnection nd interconnection between bilateral contracts Comila – Tripura ▪ More recently, trilateral electricity trade arrangements are being evaluated India - Sri Lanka • No existing Sri Lanka interconnection between India and Sri Lanka 5

South east Asia has also planned significant investments in the cross- border transmission infrastructure MW Transmission interconnection across ASEAN region for cross border Interconnection Existing Proposed Total electricity trade P.Malaysia – Singapore 1050 1 450 600 (New) 780 2 300 Thailand – P.Malyasia 480 Northern 3 3200 Sarawak - P. Malaysia 3200 Eastern 4 P.Malaysia - Sumatra 600 600 Vietnam Myanmar 5 Batam - Singapore 600 600 Lao PDR Philippines 9 11 Sarawak - West 6 230 230 Kalimantan Thailand 10 7 13 Philippines - Sabah 500 14 500 Cambodia 12 Sarawak - Sabah – 8 300 100 200 Brunei 7 9 2465 7928 Thailand – LaoPDR 2 Brunei 5463 8 1 Malaysia Lao PDR - Vietnam 2658 4 15 3 0 2658 5 1 1 Singapore Thailand – Myanmar 11709- 6 11709- 16 1 14869 14869 1 Vietnam - Cambodia Indonesia 2 (New) 170 170 1 Lao PDR - Cambodia 3 300 300 1 Thailand - Cambodia Southern 4 100 2200 2300 (New) 1 East Sabah - East 5 Kalimantan 1 600 600 Singapore – Sumatra 6 Source: Presentation on development of cross border trade between Thailand and neighbouring countries, 2014 (1) Existing interconnections also include on-going interconnections 6

Linking South Asia and South East Asia can provide potential synergies Example of how countries in the region can utilize resources to unlock their resource potential 1 Installed capacity fuel-wise breakup, 2016 ⚫ The over-dependence on a single energy resource raises concerns for long term Diversify Resource energy security. Potential ⚫ A cross-border electricity trading model can 0.5% 0.5% 2.0% address the energy procurement portfolio 13.0% mix and mitigate single energy source risk. 1.9% 2 14.4% ⚫ Countries in South Asia and Southeast Asia are dependent on imports of crude oil and 60.9% 8.2% 64.8% Reduce even petroleum products. 0.3% Dependency on ⚫ Import dependence raises energy security 93.6% 100.0% Imports concerns and also has foreign exchange reserves implications, including exposure of currency to pricing 62.1% 28.9% 3 31.1% ⚫ Leverage the complementarities in demand 3.1% curves across the nations 5.9% 6.6% 2.1% ⚫ Increased interconnectivity of power systems Increased Power Nepal Myanmar India Bhutan Bangladesh increases their reliability compared to System Reliability smaller isolated systems Coal Oil Gas Hydro Nuclear Renewable ⚫ Interconnected systems can also address situations arising out of natural calamities 7

The same has been observed across international regional electricity groupings e.g. SAPP , GCC etc. South African (SAPP) Greater Mekong (GMS) Gulf Cooperation (GCC) 1 Resource diversification and the Objectives for region’s push to meet future Resource diversification, demand Share reserve capacity, thereby electricity trade energy demand through low cost supply gap reducing generation investments hydropower from Northern Africa 2 Inter-government MOU, inter-utility Regional power MOU, agreement between General Agreement and Power Inter-governmental agreements trade agreements operating members, operating Exchange Trading agreement guidelines 3 Trading Long-term PPAs supplemented Long term bilateral PPAs Long term bilateral PPAs arrangements with short-term markets 4 Regional infrastructure investments Transmission and are financed and undertaken by the Mostly through bilateral routes infrastructure Investment by member states utilities involved or by special supported by multilateral funds investment purpose vehicle (SPV) 8

Myanmar can play an important role in connecting the two regions because of its strategic location Eastern grid of SAARC Myanmar provides the link between South Asia and Southeast Asia Region ASEAN Region 19825 MU SOURCE: Lit Research, team analysis 9

…..and also because of its growing electricity requirements and interconnections with Southeast Asia …Major thrust is being given on capacity and also on interconnections with To meet its growing energy requirements addition (GW) neighboring state 2030 15 Capacity Proposed (MW) Interconnection 2029 14 2030 22 2028 13 Mai Khot – Mae Chan – 369 Total Primary Energy Consumption (MTOE) 1 Chiang Rai 2027 12 Installed Capacity Addition (GW) 2026 11 1190 2 Hutgyi – Phitsanulok 3 2025 19 2025 10 2024 10 7000 3 Ta Sang – Mae Moh 3 2023 9 2020 17 2022 9 3150 Mong Ton – Sai Noi 2 4 2021 8 2020 8 2015 14 2019 7 2018 7 SOURCE: Myanmar Energy Master Plan, team analysis 10