SARI/EI continuously advocated the need for Regional Energy Agreement/Treaties among SAARC countries to boost policies at the regional level. Through its various forums, bilateral dialogues, task force/PSC meetings and other arenas SARI/EI has kept this momentum going. These efforts saw a major milestone when the countries signed the SAARC Framework Agreement for Energy Cooperation (Electricity) during the 18th SAARC summit held in Kathmandu on 27th November, 2014 which has been critical in removing the political and policy barriers towards enhancing CBET in the region.
Nepal has large hydropower potential (approximately 83,000 MW) that can be only commercially exploited if Nepal gets access to the Indian power market. Recognizing this critical opportunity the Nepal government has initiated various initiatives to develop hydropower projects and trading with India. To institutionalize the whole process SARI/EI advocated the need for comprehensive Power Trade Agreement between India-Nepal. To this effect the “Electric Power Trade, Cross-Border Transmission Interconnection, and Grid Connectivity” agreement commonly referred as Power Trade Agreement (PTA) between India and Nepal was signed. This agreement has removed the policy barriers for accessing the Indian power market by Nepal power developers.
SARI/EI phase IV is witnessing increased Cross Border Electricity Trade from 1450 MW in 2012 to around 2500 MW till date
One of the key objectives of SARI/EI program is to promote investment and development of clean energy such as hydropower in the South Asia region. Since hydropower sector is capital intensive, SARI/EI advocated the need for public and private investment/partnership for the development of cross border hydropower projects. To this end the governments of Bhutan and India are developing hydropower project through Public-Private partnership. Similarly the Govt. of Nepal is promoting the development of hydropower projects through PPP models. Aiding these efforts, SARI/EI convened an important investor workshop of power developers, lenders, ministries, MDBs, and regulators of SA Countries to promote investment in the sector. Further, SARI/EI report, “Cross Border Electricity Trade in South Asia: Challenges and Investment opportunities” provides a comprehensive insight into investment challenges to CBET in the region. To provide a solid reference guidelines for investments in CBET, SARI/EI under its Task Force-1 is developing a framework for regional investment guidelines to promote investment in the South Asian region.
SARI/EI program advocates the need for coordination of policy, legal and regulatory framework among SA countries and has come out with a Regional Regulatory Guidelines (RRGs) under the Task Force-1. The study provides national regulators/empowered entities of South Asian countries with a common course of regulatory action that can be referred to for decision making on CBET in their respective countries. RRGs ensure consistency in CBET transactions and removes constraints (transactions often plagued or delayed because of unclear and complicated regulatory regimes). The RRGs addresses issues across licensing, transparent procedures and rules for non-discriminatory Open Access, transmission pricing mechanism, collective process of transmission planning, settling the imbalance by energy accounting and scheduling, harmonizing of codes of voltage and frequency standards and taxes and duties, dispute settlement mechanism etc.
The differences in electricity regulations, policies and legal frameworks in the South Asian countries are perceived to be an impediment for CBET. Further, the existing regulatory, policy and legal frameworks in these countries primarily address domestic power sector issues and are not necessarily developed to address issues related to CBET. Also, changes or amendment are required to some extent for adoption and implementation of Regional Regulatory Guidelines and to remove barriers to CBET in electricity laws, regulations and policies of these countries.To this end SAI/EI brought the report “Suggested Changes/Amendments in Electricity Laws, Regulations and Policies of South Asian countries for promoting CBET in the South Asian region”. This report provides country wise short, medium, and long term road maps for implementation. The report was released by Mr. Nasrul Hamid, MP, Hon’ble State Minister, MPEMR, Govt. of Bangladesh during the Workshop on “Power Market Development in India: key Lesson Learnt” on 21st April, 2016, Mukti at Dhaka, Bangladesh
To institutionalize the process of harmonization/coordination of electricity regulations and implementation of Regional Regulatory Guidelines in the South Asia region, the SARI/EI program recommended the need for institutional mechanism for coordination of electricity regulations for promoting CBET. The need for such institutional mechanism was also recognized by the SAARC IGFA signed on 27th November 2014 between the SAARC member countries. SARI/EI took a proactive role and initiated dialogue with SAARC and also with South Asia Forum of Infrastructure Regulation (SAFIR). To take forward the SAFER agenda, SARI/EI organized a high level brainstorming session with key stakeholders such as Central Electricity Regulatory Commission (CERC); South Asia Association for Regional Cooperation (SAARC), Energy Centre, Islamabad, Pakistan; Bangladesh Energy Regulatory Commission (BERC), Bangladesh, Ministry of Economic Affairs, Bhutan, Power Trading Cooperation; India (PTC), Power System Operation Corporation Ltd, India (POSOCO) etc. There was clear stakeholder consensus for such a forum for coordination of electricity regulations for CBET. Following the stakeholder recommendations, a White Paper on the creation of regional regulatory institutional mechanism for coordination of electricity regulation is now under progress.
SARI/EI program advocates harmonization of Grid Codes and development of coordinated Operating Procedures through the study on harmonization of grid codes. SA countries are in the process of taking steps to develop/modify their grid codes for enabling CBET transactions. Bangladesh’s has already have made provisions in its Grid Codes for CBET.
SARI/EI program is advocating for coordinated/regional transmission planning between countries for CBET. As well, the efforts emphasise the need for the inclusion of CBET in the National Transmission Plans of the nations. To this end SARI/EI study on Harmonization of Grid Codes advocates the role of Framework Planning Guidelines. The Joint Transmission Planning between India- Nepal and India-Bangladesh was taken up by respective governments.
Creation of Regional Power Market for cross border power trade in the South Asia region is a critical area under SARI/EI efforts. Some of the key outcomes targeted are: the Standard Power Purchase Agreement and the Standard Transmission Service agreements. A critical outcome targeted is the mock exercise to explore the feasibility of creating a regional Power Exchange in South Asia Region.
To complement and supplement the role of SAARC and the SAARC Energy Centre in advancing the agenda of CBET in South Asia, SARI/EI and SAARC and the SAARC Energy Centre are working towards collaborating with each other on various technical fronts and sharing technical expertise. Some key examples are: