Bangladesh and Nepal to Strengthen Energy Ties Through BIN Initiative

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In September 2022, during the visit of Prime Minister Sheikh Hasina to India, Bangladesh made a request to import power from Nepal and Bhutan through India. The Nepal Electricity Authority (NEA) has requested authorization from the Indian regulatory bodies to export 40-50 MW of electricity to Bangladesh by utilizing India’s current transmission infrastructure.

Hence, in the context of Bangladesh-Nepal energy cooperation, the term “BIN approach” refers to a trilateral strategy involving Bangladesh, India, and Nepal. By putting in place transnational energy initiatives, infrastructure, and transmission networks, it focuses on making the most of the region’s energy potential. For the benefit of Bangladesh and Nepal, the strategy aims to boost power commerce, create hydropower projects in Nepal, upgrade transmission infrastructure, integrate power grids, support renewable energy initiatives, assure policy and regulatory cooperation, and promote regional energy integration. The paper aims to refer it in the context of Bangladesh Nepal Energy Cooperation.

Moreover, during August 2022, the governments of Bangladesh and Nepal reached a mutual agreement to formally request India’s permission for the exportation of 40-50 MW of electricity from Nepal to Bangladesh. This proposal would be implemented in the initial phase, utilizing the high-voltage Baharampur-Bheramara cross-border power transmission link. According to the consensus reached by the Joint Steering Committee (JSC) at the secretary level, which was established for the purpose of facilitating energy cooperation between Nepal and Bangladesh, the Nepal Electricity Authority (NEA) and the Bangladesh Power Development Board have made a request to India for a trilateral agreement on the sale and purchase of energy, utilizing the power line.

As a nation without direct access to the sea, Nepal’s strategy to export its electricity to countries beyond India necessitates a strong collaborative relationship with India. As per the Central Electricity Regulatory Commission (CERC) of India, cross-border trade is permissible in cases where India is a participant. The tripartite agreement contains a distinct provision that enables the Indian authority to execute the framework of bilateral agreements between the government of India and the governments of the respective neighboring countries. To clarify, it is necessary for Bangladesh and Nepal to establish formal agreements with India to facilitate the exchange of electricity across their respective borders.

India is currently contemplating proposals put forth by Nepal and Bangladesh, which suggest the possibility of enabling Kathmandu to vend electricity to Bangladesh through Indian territory and infrastructure. Consequently, the matter of a “power corridor” has initiated renewed discussions in the context of the bilateral relations between Bangladesh and India.

Meanwhile, on May 16, the administrative building of the Payra 1,320 MW power plant in Patuakhali district hosted the 5th meeting of the Bangladesh-Nepal Joint Steering Committee on Enhancing Cooperation in the Power Sector. During the meeting, the delegations of Bangladesh and Nepal were led by their respective Power Division Secretary, Md. Habibur Rahman and Power, Water Resources, and Irrigation Secretary, Dinesh Kumar Ghimire.

During the meeting, various matters were deliberated upon, such as the establishment of hydropower plants in Nepal through collaborative investments by Bangladesh and Nepal, the importation of electricity from Nepal via pre-existing interconnection grid lines that traverse India, and the construction of novel transmission lines. During the meeting, it was communicated that certain segments of the recently proposed transmission line would be erected within the jurisdiction of Indian territory. Consequently, the issue would be resolved through the trilateral accord between Bangladesh, India, and Nepal. In addition, the meeting encompassed an evaluation of investments in hydropower facilities within Nepal, as well as the potential for constructing a dedicated inter-country transmission line to facilitate direct power connections between Bangladesh and Nepal. During the meeting, the topic of discussion included the investment made by Bangladesh’s private sector in power generation within Nepal.

The imperative for Bangladesh is to shift from traditional energy sources towards more sustainable alternatives in order to guarantee its energy security and ensure long-term sustainability. In the wake of the Ukraine crisis, the issue of energy security has emerged as a significant preoccupation for nations categorized as developing or least developed. The potential for cross-border energy cooperation and the revitalization of the power corridor concept may offer a viable solution for Bangladesh to address its energy crisis. Therefore the trilateral approach is significant and the next sections will shed light on the application of BIN approach and it implications.

Predicated on the Principle of Reciprocity: A Mutually Beneficial Scenario
India and Bangladesh have expressed their desire to significantly augment their proportion of renewable energy in the forthcoming years. The Indian government has established a lofty objective of producing 500 GW of energy from non-fossil fuel sources by the year 2030, thereby fulfilling half of the nation’s energy needs through renewable sources. Similarly, Bangladesh aims to enhance the proportion of renewable energy sources in the nation’s energy portfolio to approximately 40 percent by 2050, which is currently less than three percent. Nepal, a country with abundant water resources, has the potential to assist both nations in realizing their aspirations.

The region situated in the Northeastern part of India serves as the primary center for augmenting the country’s renewable energy potential. It is imperative for India to explore the untapped natural resources in the northeastern region. Bangladesh possesses the capacity to provide numerous avenues for electricity transmission. Arunachal Pradesh possesses a hydroelectricity potential of 50,000 MW. As per the Indian North Eastern Electric Power Cooperation, the northeastern region of India exhibits a capacity to generate approximately 58,971 MW of power, which accounts for nearly 40% of the total hydropower potential of the country.

The Indian government is currently devising plans to investigate the full range of hydropower possibilities in Arunachal Pradesh and other states located in the northeastern region of the country. Currently, India possesses a cumulative hydropower capacity of 145,320 MW, however, only a fraction of this potential, specifically 45,399.22 MW, is being utilized. India would require a substantial financial investment to facilitate the transmission of hydropower from its northeastern to northwestern regions. India’s potential has been limited by geographical barriers. In the year 2019, there were eighteen ongoing projects in the northeastern region that exceeded a capacity of 25 MW. Therefore, having a surplus would enable it to promote cooperation between Bangladesh and Nepal in order to support the neighbors for their own good. Since these two nations are already a significant market for Indian business, greater electrification stability can facilitate greater development, which in turn makes the region more economically stable.

Besides, India could potentially leverage the power corridor of Bangladesh as a means of cost reduction. In the year 2021, Bangladesh expressed its keenness in the power corridor and anticipated receiving a proportion of 20-25 percent of the hydropower that is slated to be conveyed through the high-voltage gridline traversing its jurisdiction. If the transmission line were to be constructed in Boropukuria, it could potentially span a distance of 100km, whereas if it were to be installed in Jamalpur, it may extend up to 200km.

In either case, a substation would need to be established along each route to support the transmission line’s operations. The transmission line is expected to have a capacity of 6,000 MW in Bangladesh. There are two potential pathways for the transmission line, one originating from Asam’s Bonga and passing through Baropukuria (Dinajpur) or Jamalpu to Bihar’s Punia, and the other originating from Asam’s Silchar and traversing Meghna Ghat-Bheramara to West Bengal. Potential locations for high-capacity interconnectors include Tripura-Comilla, Bongaigaon-Jamalpur/Dinajpur-Purnea, Silchar, and Fenchuganj.

The potential allowance of the power corridor from India to Bangladesh for the importation of electricity from Nepal has the potential to initiate a novel period of energy collaboration between the two nations. Moreover, by means of Bangladesh, the nation can potentially exploit its unexplored hydropower prospects in the northeastern area. It is imperative for both Bangladesh and India to collaborate in order to strengthen their respective energy security through reciprocal measures, thereby fostering greater regional cooperation within South Asia.

Impact on the Domain of Cooperation in Energy Security

The BIN strategy entails leveraging the energy capacity of the region by establishing transnational energy initiatives, infrastructure, and transmission systems. The aforementioned statements acknowledge the advantages of collaborative resource sharing and cooperation within the energy industry to tackle the increasing energy requirements of both nations and foster sustainable growth. Furthermore, the Bangladesh-Nepal Energy Cooperation, utilizing the BIN approach, encompasses several crucial elements and endeavors.

Firstly, Bangladesh and Nepal are exploring means to enable the transfer of electricity between their nations in order to fulfill their individual energy demands. This initiative is aimed at enhancing their power trade. The process entails the creation of transnational transmission infrastructure and the formulation of power purchase agreements to facilitate the cross-border trade of electricity between the two nations. It will eventually pave the way to attain stable economies in the region and all the three parties can extract good out of it.

Secondly, Nepal possesses a significant potential for hydropower development, whereas Bangladesh is experiencing an increasing need for sustainable and environmentally friendly sources of energy. The employment of the BIN approach presents an opportunity for Bangladesh and Nepal to engage in cooperative efforts toward the advancement of hydropower initiatives in Nepal, thereby facilitating the provision of electricity to Bangladesh. The collaboration has the potential to enhance the energy portfolio of Bangladesh and facilitate the advancement of sustainable energy production.

Thirdly, the BIN approach prioritizes the enhancement of transmission infrastructure to enable the smooth and effective transmission of electricity between the countries of Bangladesh and Nepal. This entails the development of transnational transmission lines, substations, and related infrastructure to facilitate the uninterrupted transfer of electricity. India in return will have a more robust infrastructure which will give it the leverage to have an upper hand in the diplomatic domain.

Fourthly, improving grid connectivity is a vital aspect in achieving effective energy collaboration. The BIN strategy advocates for the amalgamation of the power grids of Bangladesh and Nepal with the aim of guaranteeing dependable and consistent transmission of electricity. The integration of this system facilitates the effective allocation of resources, streamlined load management, and enhanced stability of the power system.

Fifthly, the nations of Bangladesh and Nepal possess considerable potential for the generation of renewable energy. The employment of the BIN strategy fosters collaboration in the advancement of sustainable energy initiatives, including but not limited to photovoltaic, wind turbine, and bioenergy schemes. The expeditious deployment of renewable energy and the attainment of sustainable development goals in both countries can be facilitated through the exchange of knowledge, technology, and optimal methodologies.

Finally, the facilitation of energy cooperation between Bangladesh and Nepal necessitates the imperative of policy and regulatory cooperation in their respective frameworks. The synchronization of standards, regulations, and guidelines has the potential to establish a conducive atmosphere for the facilitation of international trade, investment, and project execution. It will boost the region’s capacity to be a power hub in a world which is affected by the Ukraine war specially in the domain of energy security.

The Bangladesh-Nepal Energy Cooperation, which employs the BIN approach, aims to establish a durable understanding between the two nations, capitalizing on their respective competencies and assets in the energy domain where India can be a trustworthy friend to ensure the development of the region. The objective of this initiative is to bolster energy security, encourage sustainable development, and stimulate economic growth in Bangladesh and Nepal through the promotion of regional energy integration. And in return India can emerge as a regional power to facilitate the energy domain of the region in terms of connectivity.

Source: Eurasia Review