South Asia Investor s Workshop on Cross-Border Electricity Trade South Asia Regional Initiative for Energy Integration(SARI/EI) 24 th -25 th September, 2014 New Delhi, India Dr. Jyoti Parikh Executive Director Integrated Research and Action for Development (IRADe)
IRADe, a think tank set up in 2002 About IRADe Conducts multi disciplinary research and policy analysis Multi stakeholders problems and approaches involving government, nongovernmental organizations, corporations, academia and financial institutions. Engages in national and international dialogue for consensus building Key Thematic Areas Urban Infrastructure & Services Climate Change & Environment Energy & Power Systems Poverty Alleviation & Gender Agriculture & Food Security
Integrated Research and Action for Development (IRADe) Regional Think Tank that works with Action Tanks! KEY ACTIVITIES Multi-disciplinary and Multi-stakeholders engagement. Research and analysis for decision support Research in action, monitoring and evaluation of projects Trainings and Capacity Building Policy analysis and Dissemination
SARI/EI promotes regional integration of Energy Systems. SARI/EI participating countries- Afghanistan, Bangladesh, Bhutan, India, Maldives, Nepal, Pakistan and Sri Lanka. IRADe is the implementing partner for the fourth phase (2012-2017) of SARI/EI program through a cooperative agreement with U.S. Agency for International Development (USAID). Focus is on a demand driven bottom up development paradigm specific for cross-border power project development.
SARI/EI Framework Project Steering Committee (PSC) Highly Consultative & Participatory Approach TASK FORCE -1 Coordination of Policy, Legal and Regulatory Framework TASK FORCE-2 Advancement of Transmission Systems Interconnection TASK FORCE-3 South Asia Regional Electricity Markets
SARI/EI Framework PSC Project Steering Committee Apex body that provides overall strategic direction and support for SARI/EI program PSC member includes: Senior level officials from respective South Asia country governments Representatives of regional institutions (e.g. SAARC Energy Centre) Representatives of multilateral donors (e.g. ADB and World Bank) Independent Energy Experts/Diplomats TASK FORCE -1 TASK FORCE-2 TASK FORCE-3 Task Forces Includes regional stakeholder representatives (such as national governments, electricity utilities, regulatory commissions, power market institutions, etc) Task force meetings: Follow highly structured, consultative, participative and demand-driven approach Pave way for identifying needs for technical analysis, research and studies
Hydro Electric Potential in South Asia (in GW) Afghanistan 25 Bhutan 30 Sri Lanka 2 Bangladesh 0.3 Pakistan 59 India 150 Nepal 83 Total Hydro Electric Potential of around 350 GW
Opportunities for CBET in South Asia due to Diversity in Demand & Supply Demand Side Supply Side Peak time differences Difference in time zones (15 to 30 minutes) Difference in daily load curve Difference in weekends and annual festivals Seasonal differences Sufficient to excess hydro capacity during monsoon Need of thermal support during lean period (dry season) Hydro thermal mix Optimal hydro thermal mix- better load balancing during peak and off- peak load
Benefits of Cross-Border Electricity Trade Technical and Operational Benefits Energy security due to large trade possibilities Diversified generation mix Reduction in Load Shedding Reduction in spinning reserves Efficient management of peak energy deficit Improved system reliability Economic and Financial Benefits Power availability at competitive price High export income Avoided generation capacity and T&D infrastructure Less exposure to volatile international energy prices Reduction in Current Account Deficit Environmental Benefits Reduction in CO 2 emissions Less Impact on Local and Global environment Renewable Energy Development Improvement in Social Indicators
Current Status of Power Sector Cooperation in South Asia S. No. Countries Interconnection Description Capacity (MW) Status 1 Bhutan -India 2 Nepal -India 3 4 Sri Lanka- India Bangladesh- India 5 India-Pakistan Grid reinforcement to evacuate power from Punatsangchhu I & II Dhalkebar-Muzaffarpur 400 kv line 400kV, 127 km HVDC line with submarine cable 400kV HVDC back-to-back asynchronous link 220 kv in the short-term (could be upgraded to 400 kv later) Reinforcement of 2,100 MW 1,000 MW 500 MW in the short-term Under Implementation Under Implementation Planning 500 MW Completed 250-500 MW Yet to be formally discussed
SARI/EI TRACK 2 STUDIES Economic Benefits of CBET to Bhutan and Nepal
Methodology Assessment of electricity balance i.e. surplus or deficit situation for Bhutan and Nepal is undertaken for projecting economic benefit from Cross Border Electricity Trade between India and Bhutan, and India and Nepal Electricity Demand Forecast up to 2050 Surplus/ Deficit Forecast IRADe Activity Analysis Model Electricity Generation Forecast up to 2050 In the current work we only consider one way input from Nepal & Bhutan to India through higher importable surplus generation, thus this is still a partial analysis.
Methodology- Electricity Demand Forecast Data Collection Analysis Forecast Past Electricity Demand and forecast Population trend and forecast GDP trend and forecast For Bhutan: Using time series regression analysis For Nepal: Using NEA s demand forecast growth rate Methodology- Electricity Supply Forecast Data Collection and Analysis Phase Forecast Capacity Addition Plans Plans and policy for capacity additions Targets achieved against planned capacity additions Generation Potential Past generation trend and PLF Generation Projection Year wise electricity generation based on : Assumed PLF Upcoming generation capacities Data Source: Ministry and Govt. bodies reports for Bhutan and Nepal United Nations Population Prospects United Nations Statistics Database Presentations of various Ministry representatives of
Bhutan Electricity Demand-Supply Analysis up to 2050 Existing installed hydro capacity: 1,488 MW Key Assumptions: Supply Side o Exports surplus electricity after meeting domestic requirement o Target of installed hydro capacity of 26,534 MW to be achieved by 2035 (capacity target as per government s NTGMP 2012) o PLF for Hydro power generation assumed to be 53% Demand Side o Population: as per UN World Population Prospects Population in 2010: 7.2 Lakhs Population in 2050: 9.8 Lakhs o Observed GDP growth of 8.2% (period 2003-12)
In Billion Unit Electricity Demand-Supply Forecast up to 2050- Bhutan 140 120 123 123 123 123 110 100 104 85 94 80 76 79 58 60 44 53 40 29 23 20 20 13 8 19 6 9 2 6 4 0 2015 2020 2025 2030 2035 2040 2045 2050 Electricity Surplus (in BU) Electricity Demand (in BU) Electricity Generation (in BU)
2015 2017 2019 2021 2023 2025 2027 2029 2031 2033 2035 2037 2039 2041 2043 2045 2047 2049 In Billion BTN Electricity Export earnings per capita in BTN Annual Gains from Electricity Export- Bhutan Assumption: Export of electricity to India at BTN 3 per kwh. 1 INR = 1 BTN 400 350 300 254,143 356,234 330 326,874 311 290,977 243,037 281 360,000 310,000 260,000 250 182,911 228 238 210,000 200 150 100 50 17 69,994 58 158 160,000 110,000 60,000 10,000 0-40,000 Annual Electricity Export Earnings in Billion BTN Electricity Export Earnings per Capita in BTN (on secondary axis)
In percentage Electricity Export Revenue share in GDP (at 2005 constant price)- Bhutan 1 INR = 1 BTN Assumptions: Growth rate for GDP: 8.2% (observed during period: 2003-12) Average electricity export price for year 2005: BTN 2 per kwh 70% 60% 59% 57% 56% 50% 40% 30% 20% 10% 32% 36% 22% 12% 0% 2020 2025 2030 2035 2040 2045 2050 Share of Electricity Exports in Total GDP
In Billion BTN Impact of Delay in CBET- 5 Year Delay Scenario for Bhutan Cumulative Electricity Export Earnings 1 INR = 1 BTN 8000 7000 6000 7574 5774 Loss of 1,800 Billion BTN 5000 4000 3000 2000 1000 1793 740 0 2030 2050 Cumulative Electricity Export Earnings- Base Case Cumulative Electricity Export Earnings- Delay Case
Nepal Electricity Demand-Supply Analysis up to 2050 Existing installed capacity: 770 MW Key Assumptions: Supply Side o Exports surplus electricity after meeting domestic requirement o Target of 37,628 MW hydro capacity addition to be achieved by 2034 (capacity target as per 20 year Hydro Development Plan, 2009) o PLF for Hydro power generation assumed to be 54.4 % Demand Side o Demand grows at a CAGR of 8.1% (as per NEA Annual Report)
In Billion Unit 250 200 Electricity Demand Supply Forecast up to 2050- Nepal Deficit of 1.3 BU 206 195 184 215 150 100 50 0-1 140 153 149 138 115 90 119 100 75 35 68 46 5 24 31 7 10 14 21 2015 2020 2025 2030 2035 2040 2045 2050-50 Electricity Surplus (in BU) Electricity Generation (in BU) Electricity Demand (in BU)
2016 2018 2020 2022 2024 2026 2028 2030 2032 2034 2036 2038 2040 2042 2044 2046 2048 2050 In Billion NPR Electricity Export earnings per capita in NPR 1000 900 800 700 600 500 400 300 200 100 0 3,904 117 Annual Gains from Electricity Export- Nepal Assumption: Export of electricity to India at NPR 4.8 per kwh (INR 3 per kwh). 11,487 362 17,338 570 21,628 20,402 736 715 18,489 663 1 INR = 1.60 NPR 20,000 15,146 15,000 553 10,000 5,000 0 Annual Electricity Export Earnings in Billion NPR Electricity Export Earnings per Capita in NPR (on secondary axis)
In percentage Electricity Export Revenue share in GDP (at 2005 constant price)- Nepal 1 INR = 1.60 NPR Assumptions: Growth rate for GDP: 8.2% (observed during period: 2003-12) Average electricity export price for year 2005: NPR 5.21 per kwh 45% 40% 35% 30% 25% 20% 15% 10% 5% 0% 36% 38% 29% 30% 23% 15% 11% 2020 2025 2030 2035 2040 2045 2050 Share of Electricty Export Revenue in Total GDP
In Billion NPR Impact of Delay in CBET- 5 Year Delay Scenario for Nepal 1 INR = 1.60 NPR Cumulative Electricity Export Earnings 20000 18000 16000 14000 17518 12976 Loss of 4,542 Billion NPR 12000 10000 8000 6000 4000 2000 4005 1440 0 2030 2050 Cumulative Electricity Export Earnings- Base Case Cumulative Electricity Export Earnings- Delay Case
Benefits to India from CBET- Based on IRADe Activity Analysis Model Scenario assumption: Scenarios Description India s Electricity Demand by 2050 (in BU) DAU50 Assumes Dynamics as Usual Behaviour (DAU) and projects till 2050 13,119 CBET CC-Carbon Constraint CC-CBET Electricity imports from Nepal & Bhutan are assumed in addition to DAU50 assumptions A Carbon Constraint (CC) of 85 GT on cumulative emissions from electricity sector is imposed on the DAU50 scenario Electricity imports from Nepal & Bhutan are assumed in addition to Carbon Constraint scenario CBET Contribution by 2030 and 2050: 13,110 10,300 10,345 Year Share of Electricity Imports in India s Electricity Demand (in %) CBET scenario CC-CBET scenario Cumulative Reduction in CO 2 Emissions (in MT) CBET scenario w.r.t. DAU50 CC-CBET scenario w.r.t. to CC scenario 2030 5.9% 6.1% 1,723 830 2050 1.5% 1.9% 7,136 4
Conclusion CBET benefits all participating countries Small window to tap advantages from CBET Delay in CBET will impact Export income from electricity Direct and indirect GDP gains Reduction in CO 2 emissions Cross Border Electricity Trade There s No Time To Lose
Methodology- Electricity Demand Forecast Data Collection Analysis Forecast Past Electricity Demand Population trend and forecast GDP trend and forecast Electricity demand forecast by Govt. bodies and utilities For Bhutan: Using time series regression analysis For Nepal: Using NEA s demand forecast growth rate Data Source: Ministry and Govt. bodies reports for Bhutan and Nepal United Nations Population Prospects United Nations Statistics Database Presentations of various Ministry representatives of Bhutan and Nepal
Methodology- Electricity Supply Forecast Data Collection and Analysis Phase Forecast Capacity Addition Plans Govt. plans and policy for capacity additions Identification of targets achieved against planned capacity additions Generation Potential Past generation trend and PLF PLF for upcoming generation capacity Generation Projection Year wise capacity addition Year wise electricity generation based on : Assumed PLF Upcoming generation capacities Identification of plan wise Capacity Addition Identification of Plant Load factor Identification of expected year of commissioning for upcoming capacities Forecasting expected generation (in MU) Data Source: Ministry and Govt. bodies reports for Bhutan and Nepal Presentations of various Ministry representatives of Bhutan and Nepal
In Billion Unit Exportable Electricity Surplus from Bhutan and Nepal 300 250 263 252 232 200 195 194 150 100 50 0 153 149 128 138 119 110 115 104 94 75 76 79 44 53 19 24 2020 2025 2030 2035 2040 2045 2050 Bhutan Electricity Surplus in BU Nepal Electricity Surplus in BU Total Electricity Surplus in BU
Electricity Indicator- Bhutan Electricity Demand (in MU) Decadal Electricity Demand Growth Rate Population (in thousand) Decadal Population Growth Rate GDP (at Constant Price) in Million BTN 1990 2000 2010 2012 (Base Year) Forecast 2020 2030 2040 2050 142 481 1655 1854 3688 8684 19682 43800-12.9% 15.8% - 8.9% 8.9% 8.5% 8.3% 536 564 717 740 822 898 950 980-0.7% 2.4% - 1.4% 0.9% 0.6% 0.3% 14600 24679 56810 64518 120893 265026 581000 1273692 Decadal GDP Growth Rate GDP* per Capita (in BTN) Electricity Demand per Capita (in kwh) Electricity Demand/GDP* - 5.9% 8.8% - 7.8% 8.2% 8.2% 8.2% 27239 43756 79233 87183 147072 295129 611579 1299685 265 852 2308 2505 4487 9670 20718 44694 0.0097 0.0194 0.0291 0.0287 0.0305 0.0327 0.0338 0.0343 * GDP at Constant price Source: Electricity Demand from Statistical Year Book, Bhutan; Population from United Nations Population Prospects, 2012; GDP at constant price for year 2005 from United Nations Statistics Database.
Electricity Indicator- Nepal Electricity Demand (in MU) Decadal Electricity Demand Growth Rate Population (in thousand) Decadal Population Growth Rate GDP (at Constant Price) in Million NPR Decadal GDP* Growth Rate GDP* per Capita (in NPR) Electricity Demand per Capita (in kwh) Electricity Demand/GDP* 1990 2000 2010 2012 (Base Year) 2020 2030 2040 2050 Forecast - - 4367 5195 10177 21097 45850 100102 - - - - 8.6% 7.6% 8.1% 8.1% 18111 23184 26846 27473 30001 32853 35053 36479-2.5% 1.4% - 1.1% 0.9% 0.6% 0.4% 304802 496687 734978 797013 1115551 1698318 2585526 3936213-4.9% 3.8% - 4.4% 4.3% 4.3% 4.3% 16829 21423 27377 29010 37183 51694 73760 107903 - - 163 189 339 642 1308 2744 - - 0.0059 0.0065 0.0091 0.0124 0.0177 0.0254 * GDP at Constant price Source: Electricity Demand from NEA Annual Report, Nepal; Population from United Nations Population Prospects, 2012; GDP at constant price for year 2005 from United Nations Statistics Database.
Electricity Indicator- India 1990 2000 2010 2012 (Base Year) Electricity Demand (in MU) 247762 480430 830594 995500 Decadal Electricity Demand Growth Rate - 6.7% 5.6% - Population (in thousand) 868891 1042262 1205625 Decadal Population Growth Rate 2.2% 1.8% 1.5% - GDP (at Constant Price) in Million INR 15482590 26375002 55205009 60599850 Decadal GDP* Growth Rate 5.8% 6% 7.9% GDP* per Capita (in INR) 17819 25306 45790 49038 Electricity Consumption per Capita (in kwh) 329.2 Year 2002-599.2 Year 2009-819 883.6 Electricity Demand/GDP* 0.0160 0.0182 0.0150 0.0164 * GDP at Constant price Source: Electricity Demand from CEA, India; Population from United Nations Population Prospects, 2012; GDP at constant price for year 2005 from United Nations Statistics Database.