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Indian Union Power Minister Sushilkumar Shinde believes that visible progress is emerging in energy cooperation within SAARC and suggested the approach of developing country-to-country grid interconnections as building blocks for making feasible flow of electricity across the region. Pointing out the dependency of the region on import of oil and gas to meet the energy needs, he also believes that accelerated efforts for development of gas pipelines within the region and also from outside the region are required for the region that should be done simultaneously with the electricity grid.
According to Shinde, it would enhance energy security and also facilitate energy trade in the region. While exclusively talking to Energy & Power Editor Mollah Amzad Hossain during the Energy Ministers’ meeting recently in New Delhi, the Indian politician who came from the state of Maharashtra and belongs to the Congress Party, discussed a wide spectrum of issues and explained his country’s vision in the energy field. He is the first Dalit to have become the Chief Minister of Maharashtra.
Here is the excerpt of the exclusive talks for the readers of the Energy & Power:
EP: What you evaluate in general about the energy cooperation among the SAARC member countries?
Shinde: We began regional cooperation in South Asia Region in the year 1985 with the forming of SAARC. Though energy has been one of the important areas for regional cooperation for quite some time, it has gained much higher importance recently. A Working Group on Energy was constituted in 2004. The first meeting of the SAARC Energy Ministers was held in 2005 in Islamabad. The SAARC Energy Centre has also started functioning last year. The growing realization of the importance of energy for social and economic development has resulted in launching of these new initiatives for cooperation in energy sector in SAARC.
The SAARC region constitutes about 22% population of this planet. The region faces tremendous challenges of development. Adequate availability along with equitable consumption of energy is a direct indicator of the stage of development of any country. By this yardstick we have a long way to go.
According to available statistics, only about 40% of the population in South Asia region has access to electricity. Per capita consumption of electricity in this region is even less than one-fifth of the world average.
These challenges can be addressed more successfully and quickly if we cooperate among ourselves for efficient and optimal exploitation of our natural resources and share successful experiences in adaptation of new and cost effective technologies, formulation of policies and designing efficient market structures.
Energy cooperation so far has been largely at the government level. Seeing the vast potential of the regional cooperation and connectivity in energy, the Prime Minister of India proposed a South Asia Energy Dialogue involving experts, academics, environmentalists, officials and NGOs. The Thirteenth SAARC Summit, which was held in Dhaka in November’05, underlined the need to constitute such an Energy Dialogue process for recommending measures to increase cooperation. We are very hopeful that a broad based dialogue would not only create greater consensus on the actions we take but also enhance the efficacy of our efforts.
EP: What is required now for the SAARC member states to build a strong cooperation in the regional level? Will you please explain considering your country’s experience and activities?
Shinde: We believe in a broad based consultation with all the stakeholders before formulating important plans and policies. I would like to mention here the Indian initiative on constituting a broad based Expert Committee for recommending an Integrated Energy Policy for India. The Committee consisted not only of senior energy officials of the country but also representatives from research institutions, academic institutions and eminent experts. We are already in the process of implementing the energy policy for India as recommended by this Committee.
The vision behind our energy policy is to meet the energy needs of all sectors at competitive prices and also to meet lifeline energy needs of all households even if it entails directed subsidies to poor households. We are aiming to meet our energy demand through sate, clean and convenient forms of energy at the least cost in a technically efficient, economically viable and environmentally sustainable manner. I believe that the concerns being addressed in the energy sector are more or less the same in other SAARC countries also. I would now like to share our views on some of the important energy related issues.
We in India are giving the highest priority to development of all feasible hydro potential as it is clean and renewable energy. We have been able to develop so far only about one fifth of our hydro potential. Talking of South Asian region as a whole also, so far less than one fifth of the feasible hydro potential has been developed. This provides us with a huge opportunity for meeting our energy needs in a cost effective manner on long-term basis. There are many countries in the world who have developed a large part of their hydro potential and are reaping the fruits of the same in terms of cheap, reliable and clean energy for their people. We in the South Asia region are now in the process of doing the same.
There was a section of world opinion a few years ago, which was against the development of large hydro projects. India argued against this position strongly on the basis of the sound premise that all hydro projects, irrespective of size, are sources of renewable energy. Large storage projects have benefits of drinking water, irrigation and flood control. The Bhakra Beas project is an excellent example of such project development. Fortunately, the international opinion has changed significantly and international financial institutions are once again looking favorably at hydropower projects.
While developing hydropower projects we stand committed to adequately and compassionately address the concerns regarding environmental impact and rehabilitation of project-affected persons. Developing hydro potential on priority is also going to address, to a significant extent, the concerns arising from climate change. If we do not tap our hydro potential, the only alternative would be to use more fossil fuels for meeting our energy needs.
Another major challenge being faced by countries in South Asia is to universalize access to electricity. This would be critical for achieving Millennium Development Goals. In the year, the UPA Government in India launched an ambitious program called “Rajiv Gandhi Grameen Vidyutikaran Yojana” for universalizing access to electricity to all the households in a period of about five years. There are about 78 million rural households in India who do not have access to electricity. The Central Government is giving 90% capital subsidy to the states under this scheme for creating the necessary rural electricity distribution infrastructure and also 100% subsidy for providing connection to the households living below the poverty line.
Providing the infrastructure would be just one significant step. The long-term challenge will lie in managing the business of rural electricity supply efficiently and in a viable manner. This is a significant area for regional cooperation. Bangladesh has done pioneering work in the management of rural electricity supply through local communities. Some experiments have also been done in India and in other SAARC countries. We need to come together and learn from each other. This will go along way in achieving the goal of universalizing access to electricity.
EP: What is your country’s thought on renewable energy and how you are proceeding for cooperation in this field regionally?
Shinde: The South Asian region is endowed with huge sources of renewable energy. Besides hydropower potential, which I have already touched upon, the region is endowed with wind, solar and biomass energy resources. A number of success stories of tapping these resources efficiently are before us. Nepal has many success stories of micro hydel. We, in India, have been able to achieve rapid growth in developing wind based grid connected generation capacity. We have also been successful in developing small size biomass based generation plants.
There is an urgent need for developing cost effective technologies and business models for tapping renewable sources of energy in order to enhance energy security and also to achieve the objective of sustainable energy development. Exploiting renewable energy sources would also facilitate supply of commercial energy to such remotely located habitations where providing grid based electricity may not be technically feasible or cost effective.
EP: How you see the trend and future of energy trade within the SAARC member countries?
Shinde: Facilitating and promoting trade in energy in South Asia region has been identified as one of the key areas for cooperation within SAARC. We have several examples in the world where countries of a region have successfully pooled their energy sources on the basis of complementarities. In our region also the energy output from various energy sources varies in different seasons and there are surpluses and deficits, which could complement each other. In view of this ground reality and the potential for regional cooperation, an Energy Ring has been conceptualized in SAARC. This would basically consist of trans national energy lines for trade in electricity, gas and oil. These developments could be simultaneous so that there is a comprehensive Energy Ring as conceptualized. The Terms of Reference for study on energy trade in the region have also been formulated by the SAARC Working Group on energy.
This is an evolving area. We could also look at successful experiences of developing inter country grid connections and also developing trans national oil and gas pipelines in various parts of the world. India already has grid interconnection with Nepal and Bhutan. To take this further, technical studies are underway regarding feasibility of grid interconnections with Sri Lanka and Bangladesh.
EP: What do you think about energy efficiency in the region and how SAARC countries can cooperate each other in this area?
Shinde: In fact, serious efforts are being made world over for improving energy efficiency. Obviously, for the South Asian region, which is facing shortages of energy and is also trying to make its industry globally competitive, energy efficiency assumes special importance. I understand that Sri Lanka has made good progress in labeling of appliances for generating awareness among consumers about energy efficiency standards. We in India have also begun labeling for household appliances. It will be worthwhile to study prevailing standards for labeling in various parts of the world with the objective of integrating our manufacturing industries with global markets. In the context of growing urbanization in SAARC countries, developing energy efficient buildings would also be critical for containing the surge in demand for electricity. Modernizing our rail transport systems for higher fuel efficiency also needs attention.
EP: How the SAARC member states can cooperate each other in terms of energy sector reforms, which have been initiated in different countries?
Shinde: The countries in the SAARC region are in the process of reforming their energy markets. They are at different stages in this regard. Independent regulatory bodies are being set up in different energy sectors. The main force driving this reform process is the need for mobilizing larger investments in energy sector projects. The success of various initiatives in public private partnership would depend largely on capacity of our energy markets for providing a level playing field to all the players and also a transparent and independent regulation. We can learn a lot from the experiences of each other while designing our reform programs.
While the main focus of reforms in energy sector is on mobilizing new investments, there is a growing realization that reforms also need to give due attention to interests of the consumers and also on ensuring viability of energy utilities. We in India are trying to reduce losses in our power utilities to make them financially viable. A special thrust is also on addressing the consumer related aspects. This is considered necessary to mobilize wider public support for reform process. I will urge upon all the participants in this Dialogue to pay special attention to those aspects of reforms in the energy sector which can further facilitate protection of consumer interests while ensuring financial viability of the utilities.
India would be happy to share the knowledge and experience it has gained in different areas of energy sector. Exploitation of renewable sources of energy, promoting energy efficiency measures, sharing best practices of operation and management of power generation plants, transmission lines, renovation and modernization of power generating units and oil refineries could be considered in this context.
EP: Access to and availability of electricity is now a major problem in Bangladesh. How the top SAARC leaders now dwell on this issue and take benefit for the people?
Shinde: The vision of the SAARC Charter of promoting the welfare of the people of South Asia and to improve their quality of life would be fulfilled only if we are able to give access to commercial energy to our people. South Asia has a big challenge to meet in this context. About 60% population of the region still does not have access to electricity. We should be willing to learn from success stories in regional cooperation in different parts of the world. We need to study their models and adopt whatever is relevant for South Asia.
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