Progress towards a renewable energy-driven economy continues to face a predictable stumbling block globally—over-reliance on the use of fossil fuels. Despite the great advances made in the renewable energy sector, both the developed and developing economies are reluctant to switch to renewable sources due to concerns it may detract them from their growth targets.

In South Asia, big economies like India, Bangladesh and Pakistan rely mostly on fossil fuels, including coal, diesel and gas-powered thermal plants which generate most of their electricity. The World Bank’s Sustainable Energy for All database shows that India has only a 36 percent share of renewable sources in its energy consumption, while the same for Bangladesh is 34 percent. Pakistan has less than 30 percent renewable sources in energy. On the other hand, smaller economies like Nepal and Bhutan have a bigger share of renewable sources in their energy consumption. This is not necessarily due to high generation of renewable energy, but rather due to increased reliance on traditional biofuels, like wood, dung, crop residue and charcoal, for cooking and heating purposes in the rural areas.

Diminishing coal reserves

With rapid urbanisation, there is a steady rise in the domestic consumption of electricity for cooking, heating, and more recently, transportation across South Asia. Besides this, growing industrialisation in the region means annual demand for electricity will only increase in the future. It can only be ironic then that most of the electricity produced in the region is from fossil-fuelled plants.

In India, most of this comes from thermal plants that produce approximately 64 percent of the total electricity consumed. India’s rich coal mines are depleting while 269 thermal plants across the country continue to pollute the air and soak up India’s scarce river basins. The fact that thermal plants in water-scarce Maharashtra state have been shut down for months due to lack of water points to an urgent need for India to strike a balance between its energy security, water security and international commitments on reducing emissions. A 2019 study conducted by the International Centre for Integrated Mountain Development (ICIMOD) has linked high emission of greenhouse gases in South Asia with accelerated melting of Himalayan glaciers and changing monsoon circulations and distribution of rainfall in the region.

Luckily, there are silver linings pointing towards gradual improvements globally, following the Paris Accord on reducing the impacts of climate change. Both the developed and developing countries are slowly but surely making efforts to increase the ratio of clean energy sources in their overall production and consumption. Solar and wind technologies, in particular, have seen great improvements over the past decades. The price of generating electricity from solar and wind technologies is gradually decreasing, and they have now become as cost-efficient as hydropower. However, while solar and wind can prove useful complementary sources, they cannot become a reliable alternative as demand for electricity is not subject to the availability of sunlight or steady wind flow. This means clean and reliable hydroelectricity produced by countries like Nepal and Bhutan can offer a viable alternative for the South Asian region.

According to a report published by the Central Electricity Authority of India, the states of Bihar and Uttar Pradesh have a combined power deficit of 588 megawatts, which peaks during the evenings, especially in the summer. Increasing domestic and foreign investments in these states indicate that they will require more electricity in the coming years. Hence, timely investment in cross-border energy infrastructure will go a long way in ensuring that these Indian states do not miss out on their growth potential. The Power Trade Agreement signed between India and Nepal sometime back will enable India to import the required electricity from Nepal and meet its increased demand.

Bangladesh’s need to switch to renewable energy sources is even more urgent. Thermal plants powered by coal, diesel and natural gas account for 93 percent of the total electricity generated in the country. In 2018, Dhaka admitted that its natural gas reserves which help to produce more than 60 percent of the country’s electricity may be gone within the next decade. For this reason, Bangladesh aims to increase the power consumption from renewable sources to 10 percent by next year, and continue to expand it in the following years. Unlike India, Bangladesh has less potential to expand its renewable energy sources through solar and wind technology, due to lack of sufficient open spaces. Therefore, importing hydroelectricity from Nepal using Indian transmission systems offers a more viable alternative. Bangladesh’s interest in Nepal’s hydropower sector is, therefore, timely and will benefit both countries. The two countries have already signed an agreement to this effect with informal conversations with India expected to make progress in the coming days.

Environment of trust

Long-term energy cooperation between Nepal, India and Bangladesh could prove to be an attractive prospect for all three countries. For landlocked Nepal, it offers a lucrative market and opportunity to balance its trade deficit while for both India and Bangladesh, it offers a secure line of supply amid uncertainties in their domestic energy markets. But mere technical feasibility and complementary needs will not be sufficient. There has to be a political environment of trust among the participating countries that can encourage the private sector to invest in such a project. Recent diplomatic tensions between India and Nepal over disputed border territories certainly do not help this cause. Both India and Nepal need to bilaterally resolve any irritants that could jeopardise their mutual economic and strategic interests.

Robust energy trade between Nepal, India and Bangladesh will not only reduce the carbon footprint in South Asia, but it will also help to create many clean jobs that can contribute to reverse out-migration of thousands of people from these countries. India and Bangladesh have an opportunity to come clean on their energy dilemma, and the good news is they need not look further than Nepal for an answer.