Regional integration can not only enhance energy security but also facilitate the transition towards clean energy through regional energy trade. Within South Asian countries, seasonal variations in energy demand and supply are evident. Countries like Nepal and Bhutan experience a surplus of hydropower during monsoons. Conversely, in Bangladesh, electricity demand is low during winter, leading to an excess supply of electricity. Therefore, fostering regional integration not only can strengthen energy security but could facilitate the transition to cleaner energy.

There are several bilateral energy trade models within the South Asian region, but there is a lack of regional institutional framework. The framework for regional energy cooperation and grid integration should be a bottom-up framework as we proceed from the micro- or sub-regional level towards a regional approach. The collaboration within the Bangladesh, Bhutan, India, Nepal (BBIN) could be the starter pack and after that South Asian Association for Regional Cooperation (SAARC) can step in for the regional cooperation.

Bilateral trade must be built to further enhance trilateral and regional trade relations. Recent cooperation among India, Bangladesh, and Nepal is a pioneering initiative. Upon being successful, such a cooperation framework can be replicated by other countries in the region.

These are some of the insights that emerged at the parallel session A3 of the Fourteenth South Asia Economic Summit (SAES XIV) titled ‘Towards an Integrated Energy Grid’ held on 4 November, 2023.

The Chair of the session, Dr M Tamim, Professor, Dept of Petroleum and Mineral Resources Engineering Bangladesh University of Engineering and Technology (BUET), remarked, ‘The attainment of Bangladesh’s 40 per cent renewable energy goals by 2041 necessitates the inevitability of engaging in renewable energy trade with India and Nepal through regional cooperation. Given India’s central position in South Asia, it is imperative for the country to assume a pivotal role in fostering this collaboration’.

‘With regional cooperation, excess electricity produced from hydropower in one country can be exported to another within the region. The hydropower generated in Nepal and Bhutan can serve as a renewable energy storage system, forming a key modality for fostering cooperation in the region’ suggested Dr Shankar Shrestha, Executive Director, Nepal Development Research Institute (NDRI).

Mr Richard Kaniewski, Deputy Country Director, Friedrich-Ebert-Stiftung India, remarked ‘In matters of mentality or people’s sentiments, this region exhibits significant similarities and connections. However, concerning trade or political initiatives, regional connectivity lags behind’.

‘The need of the hour is not the integration of the grid, but rather a seamless cooperation’ said Mr Alias Wardak, Independent Regional Power Integration Expert, Afghanistan.

Mr Hartmut Behrend, Project Manager, Project for support of the Climate and Development Partnership, Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) GmbH, Bangladesh, highlighted, ‘The economic cost of climate change is already high and in the case of South Asia, it is much higher’.

Professor Badrul Imam, Honorary Professor, Department of Geology, University of Dhaka, underscored that Bangladesh holds gas reserves in border areas shared with India and Myanmar. Collaborative exploration programmes among these governments are likely to be significantly more effective with regional cooperation.

‘Without a political framework that facilitates infrastructural connectivity for energy trade, no techno-economic framework can help achieve regional grid integration’ opined Mr Mbuso Gwafila, Senior Energy Specialist, The World Bank.

The speakers at the session also highlighted that the kick-start of regional cooperation for grid integration depends on two key factors. One is geopolitical will, and another is the technological transformation. India may take the lead, but excluding other countries such as Afghanistan and Pakistan will not lead to regional development. In this sense, any meaningful cooperation in the South Asian regional must include all the SAARC countries.

To attract the private sector to the discussion of regional cooperation, a proper business model is required. The government must design business-friendly policies and structures to incentivise the private sector to participate by investing in the establishment of regional grid transmission system.

The South Asian countries together need a common vision and narrative on ensuring energy security and transitioning from fossil fuels to renewable energy. The countries should mutually decide a renewable energy target and a plan to achieve the goal without threatening energy security.

The economic cost of climate change is much higher than anticipated. As part of mitigating measure, necessary investment is required for energy transition. Each country should first identify not only the required infrastructure and technology but also identify skilled workforce, knowledge, and soft skills to attract investment for smooth transition.

High-level policymakers, political leaders, academics, development practitioners, civil society activists from Bangladesh and the South Asian region attended the session and shared their valuable insights.