December 25, 2018
While the revised Indian guidelines will open up doors for cross-border trade of energy, Nepal must utilise it to maximum to drive the economy
The Indian government’s latest decision to amend the “Guidelines on Cross-Border Trade of Electricity” is a major development in importing/ exporting energy among BIMSTEC (Bay of Bengal Initiative for Multi-Sectoral Technical and Economic Cooperation) member countries. The Guidelines, introduced in December 5, 2016, by the Central Electricity Regulatory Commission of India under the Ministry of Power, was amended on December 18 to pave ways for Nepali power producers to export/ import energy not only to India but also to other BIMSTEC member countries: Bangladesh, Bhutan and Myanmar. With its amendment, India has now shown flexibility in trading of energy as a common commodity like other goods traded among the member nations. Earlier, Indian government had treated import/ export of energy as “strategic goods”, maintaining its position only to import energy from the power plants having 51 per cent of stake of Indian public or private companies or from the power plants fully owned by the government(s). Foreign ministers of BIMSTEC members had signed an MoU on the Establishment of BIMSTEC Grid Interconnection.
The BIMSTEC summit played an important role with regard to proposal of developing transnational grid connection, a proposal forwarded by Nepal to benefit the BIMSTEC members from the vast water resources of the country. After India made public the amendment to the Guidelines Dinesh Kumar Ghimire, joint secretary at the Ministry of energy, Water Resources and Irrigation, said it was “a major success for Nepal, Bangladesh, Bhutan and Myanmar”. All these countries had been lobbying for revising the Guidelines issued by India. It also had a provision under which only those hydel projects having generation capacity of 50 megawatts would be granted grid connectivity to export energy to India. Independent power producers in Nepal have also welcomed the revised guidelines.
India’s Guidelines was the major stumbling block for the development of Nepal’s clean and renewable resources – Nepal has commercial potential of generating 42,000MW of energy – that can help lift millions of people in the region out of poverty. This provision, which is in conformity with the fourth BIMSTEC summit, will attract more foreign direct investment (FDI) in Nepal’s water resources. However, Nepal also should do more homework to attract FDI in this sector. We cannot expect FDI unless we overcome the problems related to clearance of forest, land acquisition and bureaucratic hassles and red tape. We also need to open avenues for maximum utilisation of energy in the productive sectors. Creation of Energy Bank is a must to export/ import energy among the BIMSTEC members during the dry and wet seasons. This bank will enable Nepal to export its surplus energy generated during the wet season. Energy is an engine to drive economy forward. We can export power only when we have enough of it. Our policies and legal frameworks must be directed towards creating enabling condition for harnessing the resources we have. It is a step forward in energy cooperation in the sub-region.
Source: The Himalayan Times