The South Asia region is endowed with limited fossil fuels but ample hydro resources. In addition to the conventional energy resources, there are huge renewable energy resources such as solar and wind. There is, however, a disparity in the distribution of these resources across the region. Electricity generation largely depends on available domestic resources. Some countries of the region have significant dependence on coal while others are dependent on hydro resources to generate electricity. Limited oil and gas resources have led to growing import dependency. Nepal and Bhutan are dependent on Himalayan-fed hydro resources. Bangladesh, the Maldives, and Sri Lanka are largely dependent on fossil fuels. Afghanistan is struggling to rebuild its hydro-electric capacity, but investments for new capacity are yet to catch up with its requirements. To further its capacities, it is importing electricity from trans-border linkages. India and Pakistan depend on a mix of hydro and fossil fuel-based capacity, though they are increasingly becoming more dependent on fossil fuels. Bhutan and Nepal are almost completely dependent upon hydro electricity to meet their requirements. It is observed that excessive dependence on one energy resource (due to energy endowments in different countries) raises concerns related to energy security.

Energy Resource Endowments in South Asian Countries

Renewable Energy Resource Endowment in South Asia

Complementary Demand Requirements: Opportunities for Trade Due to Diversity in Demand and Supply

The countries of the South Asia regional have non-coincident demand peaks across the year. Non-coincident Peaks in SAR Countries:

Source: How Much Could South Asia Benefit from Regional Electricity Cooperation and Trade? World Bank Group policy research working paper 7341, June 2015.

Key Prospects for Cross Border Electricity Trade in the SA Region