Cross Border Electricity Trade (CBET) has been taking place between South Asian countries under the bilateral Memorandum of Understandings (MoUs) /Power Trade Agreements (PTAs) over the last decade. Bangladesh and Nepal are waiting for India’s consent to start power export from Nepal to Bangladesh. India’s consent is necessary in this regard, as the transmission line has to be passed through India, which stands between the two countries. Both Nepal and Bangladesh will sit on May 15-16 to advance the power export plan further. The fifth meeting of the joint secretary-level Joint Working Group and the secretary-level Joint Steering Committee meetings will be held then.
Regional Power Market
Bangladesh will likely allow India to set up a 116-200 kilometre power transmission corridor connecting India’s northeastern states, also known as the seven sisters. In return, India may allow Bangladesh to import power from Nepal and Bhutan using its transmission line, which has been under negotiation for years.
Technical data from the Power Grid Company of Bangladesh (PGCB) indicates that the capacity of the Bharamara-Baharampur transmission line is expected to increase from 2,400 MW to 3,200 MW soon. But Bangladesh imports 900-940 MW of electricity from India’s Baharampur to Bheramara. Considering the unutilized 2,040 MW grid line between Bangladesh and India, the Bangladesh Power Development Board (BPDB) proposed finalizing the existing grid to supply imported electricity from the GUKUL project in Nepal in 2022. In response, Indian NVVN stated that an agreement for additional power supply to Bangladesh using the Indian grid line could only be signed after finalizing the new transmission corridor between the two countries. According to India’s Central Electricity Regulatory Commission, the Indian authority can make cross-border trade where India is involved. There is a specific provision of a tripartite agreement that allows the Indian authority to sign the framework of bilateral agreements between the government of India and the governments of the respective neighbouring countries. In other words, Bangladesh and Nepal must sign bilateral agreements for cross-border electricity trade with India.
Bangladesh permitted the 21st Joint Steering Committee’s meeting with India on power sector cooperation. At the meeting, it was agreed that a tripartite power purchase agreement (PPA) would be concluded soon between Nepal, India, and Bangladesh to facilitate the transfer of 500MW of cross-border electricity from Nepal’s 900MW Upper Karnali hydropower project. The Joint Steering Committee also discussed implementing a hydropower project in Bhutan through a tripartite investment between Bangladesh, Bhutan, and India. Nepal has an estimated hydropower potential of around 80,000MW, but the country can only produce around 2,000MW. Since 2019, Nepal has been exporting power to India at six Indian rupees per unit. Bangladesh imports 1,160MW of power from India through the Baharampur-Bheramara and Tripura-Cumilla cross-border grid lines. Bangladesh aims to increase the share of imported electricity in its energy mix up to 40% by 2041 when the total generation capacity will reach 60,000MW.
An exchange-led Power market
The northeastern region is India’s main hub for increasing its renewable energy capacity. India needs to tap the unexplored natural resources of its Northeast. This region has a potential of 33,100 MW of hydropower. Still, it is untapped because of the low electricity demand, while the absence of a power grid hinders the supply of excess electricity to its western parts. Electricity transmission from northeastern India to western parts of India requires a corridor through Bangladesh due to geo-political boundaries.
India and Bangladesh want to substantially increase their share of renewable energy in the upcoming years. The Indian government has set an ambitious plan to generate 500GW from non-fossil energy-based sources by 2030, meeting 50 per cent of energy requirements from renewables. Likewise, Bangladesh wants to increase the share of renewable energy in the country’s power mix to around 40 per cent by 2050 from less than three per cent now.
Bangladesh has the potential to offer multiple electricity corridors for transmission. Arunachal Pradesh alone has a 50,000 MW of hydroelectricity potential. According to Indian North Eastern Electric Power Cooperation, the Indian North Eastern Region has the potential of about 58,971 MW of power, almost 40 per cent of India’s total hydropower potential. India plans to explore all hydropower potentials in Arunachal Pradesh and other northeastern states. India has a total potential of 145,320 MW hydropower, but only 45,399.22 MW of the quantum was being tapped. But India needs to spend a huge amount of money to transmit hydropower from India’s northeastern to northwestern region. But the geographical barrier has constrained India from untapping its potential. Eighteen projects above the capacity of 25 MW were now under construction across Northeast in 2019.
This is why India wants to build power transmission lines for using the power corridor of Bangladesh to reduce the cost. In 2021, Bangladesh showed interest in the power corridor and expected to get 20 to 25 per cent of the hydropower to be transmitted through the high-voltage gridline passing through its territory. The transmission line with the capacity of 6,000MW in Bangladesh land may be 100km in length if it is built in Boropukuria and 200km if it is installed in Jamalpur, while a substation would be built in each route. Two possible routes of the transmission line are – from Asam’s Bonga through Baropukuria (Dinajpur) or Jamalpur to Bihar’s Punia and from Asam’s Silchar via Meghna Ghat-Bheramara to West Bengal. There can be such high-capacity interconnectors in Tripura-Comilla, Bongaigaon (Assam)-Jamalpur/Dinajpur-Purnea (Bihar), Silchar (Assam), and Fenchuganj.
This deal will be fruitful only if India finally allows a power corridor to Bangladesh to import electricity from Nepal. Three grid-connected countries – Nepal, Bangladesh, and Bhutan can participate in the most competitive Day-Ahead Power Market on the power exchanges to either meet their power supply requirements or to replace costlier power in their portfolio. This South Asian Power Market can further expand and develop as more countries in the region are becoming connected. Along with getting the corridor, Bangladesh needs to ensure that it gets a fair share of electricity from India in return for establishing those transmission lines. Because, India can achieve its untapped opportunities of hydropower from the northeastern region by establishing power transmission lines over Bangladesh, both Bangladesh and India should come forward to enhance their energy security based on reciprocity and enhance South Asian regional cooperation.
The writer is a PhD fellow at the University of Bucharest.