(Mr. Pankaj Batra, Project Director, IRADe & Ex-Chairperson, Central Electricity Authority, India)
The power sector spurs the wheels of progress of a nation. Cross border energy trade helps in improving energy access to a larger number of people of the trading nations, faster and more economically. Studies have shown that Bangladesh has benefitted from the import of power from India, resulting in zero power cuts and achieving one of the fastest growth rates in South Asia, in recent times. Nepal has also benefitted by import of power from India, resulting in drastic reduction in power cuts and stable power supply in Kathmandu. Bhutan has benefitted from exporting its surplus power to India.
While electricity trading is already underway in South Asia, especially within Bangladesh, Bhutan, India and Nepal (BBIN), natural gas/ Liquefied Natural Gas (LNG) also needs to be seen as a potential area for cooperation for energy security in the region, including Sri Lanka (BBINS). Gas/ LNG consumption is expected to rise in South Asia. In Bangladesh, India and Pakistan, the industrial sector is the main contributor to growth in the gas sector.
Natural gas is less polluting than other fossil fuels for power generation, as also for transportation, household and industry sector. It also offers economic advantage as compared to other fuel options. It is also more suitable than coal for balancing the intermittencies of power generation by variable renewable energy sources and also for peaking power plants. Within the BBINS region, currently only India and Bangladesh have commercially exploitable gas reserves and produce domestic gas.
Natural Gas to fuel Indo-Bangladesh Power trade
Gas accounts for nearly 66% of the total commercial energy consumption in Bangladesh, and as such it is truly the only gas-based economy in the BBINS region. Due to the decline in production of gas and projection of demand – supply gaps, Bangladesh’s Gas Sector Master Plan 2017 (GSMP 2017) has proposed pipeline connectivity with India near Khulna to ease out the constraints in gas supply hydraulics in the short to mid-term. For meeting the long-term demand, GSMP 2017 has also recommended a large diameter 500-km long pipeline from Myanmar to India via Bangladesh.
On the other hand, at present, India consumes about 170 mmscmd of gas. The country plans to increase the share of gas in India’s primary basket from the existing 6% to 15% by 2030. There are plans to connect the whole country with one gas pipeline grid, to help bring affordable fuel to people and industry.
It is interesting to note that while India would have some surplus LNG receiving capacity after 2023-24 and a significant part of its trunk pipeline network near Bangladesh borders would be ready to receive gas by 2021-22, Bangladesh, on the other hand, faces a supply and transmission crunch to meet the demand for its consumers in the western and northern areas bordering India. It, therefore, provides an opportunity in the BBINS region for India and Bangladesh to commence trade in the short and mid-term time horizon, from as early as 2022.
On completion of the ‘Indradhanush Gas Grid’, several cities in India, including Agartala, Silchar, will be in close proximity with Bangladesh on the eastern border with India. The issue is under consideration by Bangladesh for interconnecting their gas pipeline netwok at Satkhira border point; however, an agreement is yet to be inked. With its geographical location and upcoming pipeline and RLNG infrastructure, India emerges as a potential hub for furthering intra-regional trade akin to a ‘Hub and Spoke’ supply model.
Boost to cross-border gas trading with H-Energy and Petrobangla agreement
India’s Hiranandani Energy (H-Energy), a natural gas company, recently signed a preliminary agreement with Petrobangla, a government-owned national oil company of Bangladesh, for supply of LNG to Bangladesh. Both the parties are likely to soon finalise a long term supply agreement to commence the supply of re-gasified LNG to Bangladesh through a cross border natural gas pipeline. The proposed 800 megawatt (MW) gas-fired combined cycle power plant at Rupsha in Khulna region of Bangladesh will be the major consumer of the imported re-gasified LNG (R-LNG).
This is Petrobangla’s second MOU with Indian firms to import the expensive R-LNG through cross-country pipeline. Earlier it inked a similar agreement with India’s state-owned Indian Oil Corporation Ltd (IOCL) to import R-LNG.
The Petroleum and Natural Gas Regulatory Board, the regulatory body in India, has authorised H-Energy to build, own and operate the Kanai Chhata-Shrirampur natural gas pipeline that connects its LNG terminal in West Bengal to the Bangladesh border, to enable cross border supply of re-gasified LNG into Bangladesh.
This deal is likely to spur more such collaborations between not just Bangladesh and India, but within the BBINS region as a whole.
The potential benefits of natural gas/ LNG trading in South Asia has been explored in detail in the study “Analytical Study to assess the potential of gas / LNG for Regional Energy Cooperation in BBINS region” conducted under USAID’s South Asia Regional Initiative for Energy Integration (SARI/EI).
The report analyses the issues and factors for dependability on LNG and affordability on a long-term basis; the economic value that Natural gas/ LNG offers over other fuels to the consumers in the region, and the potential and opportunities for regional cooperation.
The report will be soon launched through a webinar and will be made publicly available for the benefit of all stakeholders.
USAID’s SARI/EI program, being implemented by Integrated Research and Action for Development (IRADe) in its current phase, focuses on promoting regional energy integration through increased cross border energy trade for an energy-secure South Asia.
IRADe has reached nearly 36 percentage of professional women this year, which has been the highest since its foundation. I wish to address all my colleagues but directly to women colleagues on this occasion.
Let me assure you that you are here because you deserve to be here. You are here on your own right. No concessions or compromises have been made. Yes, we have not considered gaps on your career and allowed for fulfilling certain obligations. You have unlimited potential to reach further to any post including mine, someday, depending on your training, expertise and your hard work.
Let me stress that we ensure respectful atmosphere for all and any gender.
We do not stop at making women comfortable in our office. We take cognizance of underprivileged women world over in our work and ask –
- Why can’t all women have clean cooking fuel?
- Why do they not exist in large number, at least in the renewable energy sector?
- How can we ensure their comfort in a warming world, whether it is heat stress or disaster resilience or climate mitigation- that should not be done at their expense?
- How can we ensure women farmers’ income or expand their choices of livelihoods?
We try to understand this through our surveys and analysis.
I am happy that several women at IRADe have written that their work at IRADe has been very fulfilling and inspiring. They describe their stay in their own words separately. I wish them success and happiness.
Professor Jyoti Parikh
Executive Director, IRADe
Dr. Jyoti Parik, Dr. Kirit Parikh and Dr. Probal Ghosh represented IRADe at the COP 25 held at Madrid, Spain from 4th to 10th Dec, 2019. COP 25 was the last COP before the Paris agreement came into action and hence was significant. Many climate researchers and activists attended the COP 25 at Madrid and presented their views through their research. IRADe also presented its substantial research at the India pavilion and the Capacity building hub on the Knowledge to Action Day. IRADe’s presentation at the India Pavilion was on “Climate Adaptation Action: Climate Resilience and Smart Cities” on 5th Dec covering the work IRADe did in the area of urban climate resilience efforts for cities towards Disaster Resilience, Heat Stress Action Plans and countering vector-borne diseases like Dengue. The analysis presented covered the geospatial analysis of 15 Indian cities and the engagement with Urban Local Bodies to frame adaptation strategies, knowledge products, capacity building and enriched the dialogue by a considerable amount of stakeholder engagement.
The presentation at the Capacity Building hub on the Knowledge to Action Day was on“Mobilizing stakeholders at subnational levels”. The capacity building hub is organized by the Paris committee on Capacity building of the UNFCCC. There were 11 thematic days on which presentations were invited by various researchers and research groups. IRADe presentation was on 6th Dec on the Knowledge to Action day. IRADe presented its experience of it projects in which it converted knowledge to action through policy changes for adaptation such as setting up heat wave action plans for cities like Rajkot, Dengue, disaster resilience of cities, climate change awareness program etc. and NDC formulation and implementation, diesel price subsidy reforms and rationalization for mitigation.
A number of issues got discussed across stalls which were of Interest. Some of the recurring issues that were being talked of was that the NDCs announced by countries for their Paris pledge were inadequate and would lead the world into a path of 30 C above pre industrial levels and it would require a reduction of 16% to reach the target of 20 C and a reduction of 32% to reach 1.50 C above pre industrial levels. Interestingly very few countries have their NDCs that comply to 20 C target. India is one of them including Costa Rica. A case was being made for countries to ratchet up their NDC commitments. Number of presentations were on enhancing ambitions for NDC commitments.
Additionally, many sessions were organized on NDC partnerships focusing on how to get the NDCs implemented on the ground in many of the developing countries like Latin America and Africa. There was talk and discussion about carbon tax as an instrument for mitigation. The developed countries including China submitted a draft paper on loss and damage to the developed countries.
(Read details at: https://irade.org/IRADe%20Report%20Release%20at%20COP25_PressRelease.pdf)
Under cross-border electricity trading, each country can plan for lesser capacity as well as lesser reserves that may be required when tripping happens. It is always economically beneficial to interconnect and share resources. Nepal would gain from the sale of its hydropower to India, while Bangladesh would gain from buying power from India. India would gain from flexible hydro resources to manage the intermittency of renewable energy sources, points out Pankaj Batra, Project Director, SARI/EI/IRADe. South Asia Regional Initiative for Energy Integration (SARI/EI) is an initiative by USAID to strengthen energy security in South Asia.
What are some of the benefits that will accrue to India as well as the South Asian region from cross-border electricity trading?
Our studies have shown that there is economic value to such trading between India and Nepal and India and Bangladesh. Nepal would gain from the sale of its hydropower to India, while Bangladesh would gain from buying power from India. India would gain from flexible hydro resources to manage the intermittency of renewable energy sources. All nations would gain from interconnections because of the diversity in the type of supply sources and peak demand occurring at different times during the day as well as diversity of peak demands over the year, since the peak demands in different South Asian countries would occur in different seasons.
Normally,acountryplans its generating capacity to meet its peak demand, even if it comes for a short time. With an interconnected grid and cross-border trading of electricity, each country need not have individual generating capacity to meet its own peak, as the peak demands are staggered. With the transfer of electricity, each countrycan plan for lesser capacity, as well as lesser reserves that may be required when tripping happens. It is always economically beneficial to interconnect and share resources. We will additionally be doing a detailed study for South Asia to determine how much the average tariff of each country will get reduced through such trading.
Yes, as per your preliminary calculations, the trade will also help in reducing the cost of electricity that is going to be one of the key drivers of Industry 4.0.
Of the consumer tariff, generation itself accounts for 70 per cent of the cost while the remainder is on account of transmission & distribution. So, if the generation costs come down for a country say by 10 per cent, it will lead to a reduction of around 7 per cent on the overall tariff. Although we have not yet concluded on the total reduction, from the principles it is clear that it will bring down tariffs. We are doing this study for the South Asia Forum for Infrastructure Regulation (SAFIR), and will get to know by how much it will reduce the tariff for a country and consumers.
One of the points that you made was about the trade helping improve synergies like in improving peak and baseload requirements between India and Nepal. Would you like to elaborate on this point?
Due to the diversities in peak demand on account of different timings and seasons, there is the scope of a lot of synergies in terms of grid integration and trading of power in South Asia. With improvement in interconnections over the years between these countries, they have already seen the gains obtained by forming a South Asian grid.
Once the grid is interconnected, it will be one of the largest in the world. This will benefit all the countries, including India, especially in the area of hydropower, as it is becoming increasingly difficult to construct such projects here, primarily due high cost of land and rehabilitation issues. Moreover, this will also help to address intermittency concerns that one encounters with renewable sources of energy, like solar and wind power, because of the huge hydro potential that we will get connected to.
Hydropower, being very flexible, doesn’t lose efficiency at higher or lesser generation and can be ramped up or down fairly quickly. This is not possible with thermal plantsthat have a lot of inertia. This will help in the proliferation of renewable sources of energy in the future. Countries like Bangladesh that don’t have land to set up renewable energy facilities, can enter into contracts to buy renewable power from India. This will also help them in meeting their commitment to cut down on carbon emissions.
But is the basic infrastructure to facilitate such trading in place?
The infrastructure is mostly there in the countries in the region, and there are plans to expand it further. We are connected by a 400 kV double circuit line to Nepal, though it is charged at 220 kV, because not so much power is flowing presently. There is a plan to upgrade it to 400 kV by this year. Once that happens, much more power can flow to Nepal.
The constraint in more power flowing was mainly because of the Common Minimum Grid Code not being there and also because the internal transmission connections within Nepal were not strong enough to facilitate the export of more power. They are doing that now by strengthening the internal systems as well as constructing new internal lines within Nepal. This will help more power to flow to Nepal, thereby allowing more people to gain access to electricity in the country. In Bangladesh too, the present inter-country infrastructure is being fully utilisedthrough 1160 MW power flowing to Bangladesh.
In the future, there are plans to establish interconnections through AC lines with India. For Bangladesh, it is cheaper for them to have an AC connection, than High Voltage Direct Current (HVDC) connection. There are only a couple of feasible points that they have proposed. A final call on this will be taken shortly. With Bhutan, we already have strong AC interconnections.
Sri Lanka is also interested in connecting, and they have more or less finalised on the interconnection front. It may bepartly undersea cable and partly overhead line or totally overhead line. Now they feel that they can have an overhead line, as that is possible owing to the shallow waters of Palk Strait. And that will work out to be much cheaper. Once a decision is taken, it will take about three years to construct the line.
What are some of the regional level challenges that might arise and is there sufficient political will to meet them?
Yes, there is political will and that’s how things have finally started moving. There might be questions raisedon whether we, in India, have enough surplus power to supply to all those countries. But that is a generic issue because even now we have got about 30-40,000 MW of stranded generating capacity. Such issues arise, because distribution companies avoid feeding low tariff consumers or consumers who get free electricity, because that can add on to their losses. However, even if you feed them, their consumption would be less than the consumption of households in cities. So, their demand is not likely to put any significant pressure on the overall capacity.
There won’t be much increase in load even if that last-mile connectivity is provided to states through the SahajBijliHarGharYojana (Saubhagya) scheme of the central government. Similarly, Nepal has benefited immensely due to this import from India. At the same time, several of their hydropower plants, with a consolidated capacity of around 1000 MW are currently under construction.
The country’s whole load is around 1300 MW. Those plants are likely to be commissioned within a year. Now, when that happens, they will also need to export that excess electricity. Bangladesh is tying up to import electricity from Nepal through India, which is now allowed under the trilateral agreementthat the new Government of India policy now allows. It’s a win-win situation for everyone. Like, whenever there is a low inflow season in the case of Nepal and Bhutan, they can import electricity from India. And during the high hydro season, they can export to India, under barter or banking of power arrangements. This was an area, that was hitherto not tapped much, but now it is allowed.
In another two years, even without the interconnection with Sri Lanka, quite a lot of power will start getting traded. It is something akin to what happened in India, when we started interconnecting states with regions and regions with the rest of the country. As a result, you now enjoy uninterrupted power in at least the cities.
Last year India’s Central Electricity Regulatory Commission (CERC) had notified new regulations for CBET. Does that mean we now have an effective and proactive regulatory mechanism in place or does it need to be evolved further?
Those are general regulationsthat allow for the trading of electricity. But on the technical side, the grid code or the rules that need to be followed, to ensure stable operation, need to be complied with. These need to be also adopted by all South Asian nations, in addition to the trading regulation of the CERC. That is what is happeningnow and South Asian electricity regulators are also waiting for these to get rolled out, so that power can flow freely and securely.
— MANISH PANT
(This interview was published in Power TODAY magazine in January 2020. Link: https://infrastructuretoday.co.in/News.aspx?title=It-would-be-a-win-win-for-all-S-Asian-countries&nId=eg8uKg5xGPxFghRoKArHbg==)
Unplanned urbanization has been a challenge, increasing the vulnerability of cities to natural as well as man-made hazards. Natural disasters displaced 36 million people in India between 2008 and 2018. India is ranked 30 in the INFORM Global Risk Index (GRI) and the International Disaster Database estimates that India’s economic loss from hazards (between 1990 and 2014) to be around 4.3 Billion USD. To make Indian cities disaster-resilient right at the inception stage, the efficiency in urban planning can have a major impact on communities’ preparedness and capacities to recover.
The Government of India recognizes the importance of improving the resilience of cities to manage the challenges posed by extreme climate events. The Ministry of Housing & Urban Affairs (MoHUA) commissioned a study on ‘Sustainable and Disaster Resilient Urban Development, India’ to Integrated Research & Action for Development (IRADe). The study’s aim was to create a concrete roadmap for disaster resilience in the 10 cities – Ahmedabad, Bhopal, Bhubaneshwar, Dehradun, Guwahati, Hyderabad, Pune, Shillong, Srinagar and Vishakhapatnam – across 10 states in India.
The study followed a holistic methodology by incorporating factors that give local/ regional diversification as well as the flexibility to be customized for use in other regions/ cities. Vulnerability for the 10 cities was carried out in the aspects of natural hazards, existing critical infrastructure, recovery and response system of city governance, and the socio-economic status of the population. The study has also considered certain aspects of the Sendai Declaration, UNISDR, 2015, such as minimizing socio-economic losses, like critical infrastructure and basic services, and improving access to multi-hazard early warning systems and disaster risk information.
The study’s results indicated that natural hazards such as flood, drought, extreme temperature, storm surge, and cyclone events already impact cities and these will be further exacerbated by climate change variability. An increase in population density and urbanization increases cities’ vulnerability to disaster. In absence of basic facilities, slum population is the most vulnerable group at the times of disaster. Most of the cities studied do not meet MoHUA benchmarks for Urban Infrastructure, and are highly exposed to multiple climate hazards.
To mitigate the impact of disasters, a number of guidelines were recommended as per the study results – (1) Disaster Risk Reduction (DRR) using of traditional knowledge alongside scientific knowledge; (2) Database Management of hazardous events; (3) Natural Resource Management plans; (4) Infrastructure upgradation; (5) stronger Transportation System; (6) Robust water supply, sanitation and power infrastructure with optimum physical resilience; and (7) improved Socio-economic conditions of urban poor.
Strong Governance and Institutional Framework, covering disaster resilience, adaptation, environment and sustainability, are essential for Indian cities to combat the impacts of climate change. Technical capacity building by Urban Local Bodies and public private participation also play a key role in making cities more resilient to climate disasters.
The proposed guidelines and recommendations of this report were referred by MoHUA for integrating disaster/climate resilience in smart city plans for 10 Indian cities.
(This article was published in CSR India magazine in January 2020. Link: https://indiacsr.in/combating-climate-change-in-india-one-urban-city-at-a-time/)
Jyoti Parikh, Executive Director, Integrated Research and Action for Development (IRADe)
The budget can recognize demands arising out of the need for climate action through GST tax rates rather than subsidies
28th January, 2020: Recent meetings at Davos and Madrid focused on climate change and raised concerns about inadequate climate action. Basically, we are talking about reducing the use of fossil fuels viz; coal, oil and gas for climate mitigation. However, considering that the world has done so little so far, there are climate impacts that need to be countered such as disasters, extreme heat and cold, etc. through climate adaptation. This brings us to the question on what can the budget do towards this cause?
India already has climate friendly policies in the power sector which promote renewable energy and energy efficiency. However, much more can be done to increase the pace. For example, what measures can be taken in the transport sector, which is the major user of petroleum products in India? Here we have triple pressing concerns: large-scale imports of fossil fuels draining our foreign exchange resources; air pollution; and climate change. All the three above concerns can be addressed by promotion of Electric Vehicles (EV) – a remedy to address noise pollution as well.
Unfortunately, the Government program for Faster Adoption and Manufacturing of E-vehicles (FAME), launched to promote EVs,basically depends upon providing subsidies for a few vehicles. It will be difficult and even undesirable to upscale FAME, which relies on subsidies to manufacturers for sold vehicles. In the name of demand mobilization, it does the opposite. It providessubsidies to manufacturers –e.g. INR 1.5 Lakh per car for only 35000 cars. What manufacturers really need is high demand for EVs to upscale production. On the other hand, this amount of INR 1.5 lakh is a lot for the car purchasers. However, even that would be unworkable for millions of consumers. So how should this be addressed?
In any new technology, there is the ‘chicken- and -egg’ problem, viz the demand does not increase because the price is too high and price cannot drop unless there is high demand. To break this logjam, it is easier to play around with GST rather than subsidy. Also, it may be easier to reduce GST, at least initially. Firstly, manufacturers may not pass the full subsidy received by them to consumers. Also, the allocated funds are limited to a small number of vehicles that may be provided subsidy. Moreover, it requires bureaucratic interventions to monitor and transfer funds to the manufacturers. Instead, the Budget can give tax relief directly to consumers, producers as well as to the providers of charging infrastructure. Recently, the GST for e-vehicles was reducedfrom 12 % to 5 %. This can be extended to zero % as well. Lower GST can reduce the price for a consumer to the same extent without any bureaucratic intervention. It will not require setting aside funds in the budget, where other compelling demands compete. So if EVs take off, more than 35000 can be absorbed. Of course, it will reduce GST revenue. This will stress the budget only if sales exceed 35000. The manufacturers should also be provided tax benefits initially instead of subsidy, so they reduce costs and are incentivized to produce better vehicles in abundance. More varieties of EV vehicles are needed for consumers to make choices and purchase them in large numbers, stressing the budget if the sales exceed 35000.
On the consumers’ end, incentivizing behaviour change can go a long way. This requires analysing the existing options and creating a larger price difference between the conventional non-EV options and the newoption of EVs. For example, only when the price difference between diesel and petrol started falling that the share of diesel cars purchased fell. This mechanism of creating price difference through taxation can be used effectively only when the other option can enter the market in a big way.
Other measures the Budget can look at, is to incentivize scrapping of old vehicles to save fossil fuel consumption, air pollution and CO2 emissions. It is also another way to promote demand. Emphasis should be given to promoting electric two wheelersas the annual production of 2 wheelers is about 21 million, as compared to 4 million cars. Charging is also simpler for 2 wheelers. Similarly, EV buses are also very important for all three benefits quoted above. We need to provide an affordable and comfortable transport system which people prefer over driving a car, finding parking for it and maintaining it.
Charging infrastructure will remain a risky business for a while because not enough is known about charging behaviour yet. When, where and how many consumers will come with what type of vehicles will be clearer only as the demand picks up. The incentives they need are non-monetary, such as providing a place and other facilities. Thus an appropriate program will benefit the environment, the nation, the consumers and producers. It would require incentivising EV but also taxing conventional vehicles after some period of time when sufficient EV options are available. A word of caution is required here – taxing fossil fuel based vehicles more than EVs work better only if good choices of EVs are available. Currently, we have not reached that stage yet. Aggressive thrust on EV helps climate mitigation which reduces the use of fossil fuels.
We also need to worry about climate adaptation to deal with extreme weather events and disasters. Spring and summer are just around the corner. It is no longer possible even for the poor and lower middle class to live without fans and coolers or cool roof over their head in congested urban slums. The Cooling Action Plan launched by the NitiAayog needs to be taken up to design appropriate tax incentives and subsidies so that people go for energy-saving or super-efficient cooling devices. We recall what we did to when the cost of LED bulbs was brought down by mass procurement. Similar programme for cooling devices is needed so that the increase in electricity demand is manageable.
Thus, the budget can recognize demands arising out of the need for climate action through GST tax rates rather than subsidies for energy efficient appliances so as to give long term signals for green growth.
(This opinion piece was published on ETEnergyWorld.com on January 28, 2020. https://energy.economictimes.indiatimes.com/energy-speak/budget-suggestions-for-climate-action/4012)