Professor Jyoti K Parikh is the Executive Director of Integrated Research and Action for Development (IRADe), New Delhi. She was a Member of the Prime Minister’s Council on Climate Change – India, is a co-recipient of the Nobel Peace Prize awarded to IPCC authors in 2007, and has made valuable contributions towards environment and climate change issues in developing countries.

 

Integrated Research and Action for Development (IRADe) is leading a study on declining renewable energy costs and regional power trade in Bangladesh, Bhutan, India, and Nepal (BBIN region, South Asia).

What has IRADe’s work on regional power trade in South Asia involved?

IRADe has been working in this area since 2012. Our first phase was designed to remove apprehensions, and we then set up three task forces: harmonisation of policies and practices; transmission and investment; and transition to the power market. Supported by USAID, we worked closely with more than 100 people over eight years, building confidence through analysis, discussions, capacity building and many other activities through nearly 100 events and 35 reports.

By 2017, when solar prices began to fall, the question of whether India would still buy hydropower arose. Our EEG/UKaid project on the impact of declining prices of solar energy on South Asia power trade will bring clarity on how the role of hydropower may shift to support such a transition. 

We are grateful for EEG’s support, and thank USAID for enabling us to build important long-term relationships. These relationships have proved crucial for carrying out our EEG project, and will help us to communicate the results.

 

We understand the regional power exchange has started functioning. What is the significance of this for regional power trade for the region/what are the potential benefits?

We are extremely delighted that power exchange between India, Bangladesh, Bhutan, and Nepal has just been activated. In a first-of-its-kind initiative, India’s largest power trading platform, the Indian Energy Exchange (IEX), commenced Cross Border Electricity Trade (CBET) on 19 April 2021. Nepal is the first country to start cross-border electricity trade in India’s day-ahead electricity market.

This is a great achievement towards lasting cooperation, marking a shift from bilateral agreements of power trading to market transition, and in creating a robust regional power grid. It has been reported in many news publications, including Energyworld.com, Business Standard, EastMojo and ANI.

So far, regional power trade in South Asia has been limited to bilateral government-to-government negotiations, which is a slow process. On the eastern side, India exports about 500 MW to Nepal, 1200 MW to Bangladesh and 3 MW to Myanmar, and imports around 1200 MW from Bhutan. On the western side, there is currently no power trade agreement between India and Pakistan.

It is IRADe’s expectation that in the future, the power trade between BBIN countries will increase to 40 BU (billion units) by FY22 and 70 BU to FY27.

The benefits of regional power trade range from technical to political. The technical benefits include utilisation of regional hydro potential, better utilisation of regional capacity resources, reduced regional emissions, and grid security because the connected grids can benefit each other during a crisis. The latter was highlighted during the COVID-19 pandemic.

Equally important are the political and economic/societal benefits. For instance, the success of hydropower trade between India and Bhutan has helped to foster strong regional cooperation in many other matters as well. Other such examples are India-Bangladesh and India-Nepal power trade helping to eliminate power shortages in Bangladesh and Nepal. On an economic/societal front, reducing power cuts in Bangladesh has helped industries to flourish. There is increase in access to energy. We need to see the significant changes that regional hydro trade can bring in GDP growth and higher per capita income in countries such as Bhutan and Nepal.

 

What role do you think hydropower can play in regional power trade and do you have any early indications from the research on the likely impact of falling solar and storage costs on trade in hydropower in the region?

The Himalayan region has huge hydro potential, especially in Nepal and Bhutan, which have hydro potential of 80 GW and 26 GW respectively. From this, less than 3 GW is utilised due to low domestic demand in mountainous Nepal and Bhutan.

Capitalising on hydropower resources can help to derive power and economic benefits, in terms of export revenues. Further, from standalone models of Bhutan and Nepal, it is observed that trade will help these countries to utilise their hydro potential. For example, in a no-trade case, the installed capacity of Nepal will reach only 15 GW compared to a high-trade case, where it reaches 44 GW by 2045. Similarly, for Bhutan, under a no-trade case, the installed capacity reaches 5 GW and in a high-trade case it reaches 16 GW. The high hydro trade flow will typically take place in wet seasons (monsoons).

Regional hydropower can provide base load as well as a flexible power generation resource, depending on the type of hydropower plant configuration. For instance, Run of River power plants with some pondage can provide balancing support in day-to-day power operations, and large hydropower plants with seasonal storage can provide power for seasonal shortages.

We will be able to comment on the likely impact of falling solar and storage costs on trade in hydropower in the region in the coming months, as we have integrated our power system model for BBIN countries, and work on scenarios for the regional system is currently in progress.

 

You recently presented your Bangladesh electricity model to Bangladesh stakeholders – what feedback have you received and what models will be presented next?

The feedback we received from Bangladesh stakeholders is that the country is keen on developing its solar potential, but currently faces challenges – namely the high cost of solar and land availability. In addition to this, Mr Mohammad Hossain (Director General of Power Cell) shared the possibility of importing solar/renewable electricity from India, with Bangladesh facing land availability issues for domestic solar projects. He also stated that this work will act as a building block for promoting regional cooperation. In addition, he stated that this study will enable policy makers and stakeholders to further understand the possibility of trade under changing cost dynamics.

We plan to present our draft India model results and integrated model results to stakeholders in India soon.

 

The research team aims to assess the impacts of declining solar, wind and storage technology costs on power trade in the South Asia region – what have you learnt so far/do you have any early insights you can share?

So far, we have learnt that participating in regional power trade is a political as well as a technical decision, which needs wider stakeholder consensus to get started or to increase its quantum, as every country thinks about its own requirements first and then trades the excess.

From the standalone models of Bhutan and Nepal, it is observed that with declining renewable energy (RE) costs, these countries will be able to utilise their own domestic solar and wind potential (although this is much lower than their hydro potential). At present, both Bhutan and Nepal have minimal RE installation, i.e., less than 1 MW wind capacity in Bhutan and around 1.5 MW of solar installation in Nepal. Furthermore, utilisation of hydro potential for export will depend on the power export price/negotiations. Similarly, potential RE utilisation is also observed in the Bangladesh standalone model.

For India, the declining cost of RE and storage will help to achieve higher RE capacity installation; as high as 722 GW by 2045 (with RE generation of around 1,426 BUs). To support such high RE capacity, the model also utilises battery energy of around 46 BUs.

Naturally, this will reduce CO2 emissions from coal and reduce climate change through greener transition.

 

What level of interest has been shown by BBIN governments and electricity authorities so far in your research and the models you have presented? How much interest do you think there is across the BBIN countries in increasing power trade?

BBIN government officials are very much interested in increasing power trade between the trading partners. The level of interest can be reflected through the stakeholder participation in our events conducted so far.

For instance, the Bhutan stakeholder meeting, held in November 2019 at the Department of Hydropower & Power Systems, saw participation from more than 23 representatives from Bhutan’s power system planners, operators and regulators. The organisations that attended included Druk Green Power Corporation, Bhutan (DGPC); Bhutan Electricity Authority (BEA), Bhutan; Bhutan Power Corporation (BPC); Department of Hydropower & Power Systems (DHPS); and the Department of Renewable Energy under Ministry of Economic Affairs (Bhutan).

Similarly, during the inception/stakeholder meetings in Nepal in February 2020, held in Kathmandu, IRADe met seven representatives of government organisations in Nepal, including Nepal Electricity Authority (NEA), National Planning Commission (Nepal), Alternative Energy Promotion Centre (AEPC), and Office of the Investment Board, Investment Board Nepal (IBN).

The Bangladesh inception/stakeholder web meeting saw participation from more than five government organisations of Bangladesh. It is unfortunate that due to COVID-19 many events had to be converted into webinars.

 

How have COVID-19 travel restrictions/social distancing rules affected your project? You have moved meetings and seminars online, for example – has that been successful? Do you have any advice to share with other research teams?

Due to the pandemic status of COVID-19, IRADe research staff have been working from home since March 20 2020. From January 2021, we requested staff to start office working on a rotational basis, so that adequate social distancing was maintained as per government guidelines. However, with the increasing COVID-19 cases in Delhi since early April 2021, we have returned to work from home practice.

We moved our Bangladesh inception/stakeholder meeting from a face-to-face meeting to a webinar. In one sense, it was successful in terms of participation, with 40-plus stakeholders attending, not only from Bangladesh; we even saw participation from organisations in Bhutan and Nepal. The participants included power system planners, operators, regulators, grid operators and the academic community.

From the meeting, we were able to capture some insights and perspectives from Bangladesh’s power planners on the future of the country’s power sector. However, we have found that face-to-face meetings cannot be completely replaced by web meetings. Formal web events that end in a stipulated time have limited impact and input from just a few members. In informal face-to-face meetings, where there are office visits, lunches and tea breaks, we get comments, anecdotes, tips and other valuable pointers. 

 

You recently authored an Energy Insight on the lessons learnt on the resilience of electricity systems during the Covid-19 pandemic. With regards to this paper:

There were COVID-19-related lockdowns in BBIN countries – what impact did they have on their electricity systems?

First of all, the lockdowns happened at different times and were of varying severity, India being the most severe. Due to the effects of India’s lockdown, which started in the last week of March 2020, the daily energy demand and peak MW demand declined in the range of around 25%. Demand gradually increased as restrictions were slowly lifted and peak summer load started to build up. During the lockdown, most of the reduction in generation was achieved by reducing load on the coal-based thermal generating stations. There was almost no reduction in RE sources, and their ‘must-run’ status was maintained. By the end of May 2020, demand on the grid was at pre-lockdown levels.

During Bhutan’s lockdown, a small reduction in the overall demand in the range of 10-15% occurred. Bhutan’s own internal demand is only around 300 MW, mostly derived from residential and commercial consumers. Since Bhutan is synchronously connected with the Indian grid, reduction in demand could be managed by enhancing exports to India.

In Nepal, a substantial reduction in peak load, as well as in daily energy consumption, was observed during the lockdown period. There was a drop of around 15-20% of value in the case of peak demand and around 25-30% of value in the case of daily energy demand. The Nepal grid managed these changes by varying generation at its hydro plants, as well as by moderating the quantum of imports from India.

In Bangladesh, the decline in demand was very moderate. This can be attributed to the fact that in Bangladesh, a lot of industrial load is associated with export-oriented industries, and the work continued because it fell into the ‘essential’ category (with necessary precautions and safeguards). At the same time, a certain amount of electricity load was also shifted to the ‘work from home’ category. Bangladesh’s import pattern did not change on two counts; first, the decline in demand in the country was moderate, and second, the imported power from India was cheaper when compared to the cost of generation at its own plants operating on gas and furnace oil/diesel.

 

How resilient did the power systems across the region prove to be, and what major challenges were faced? How were they addressed?

Due to the lockdowns imposed in the different BBIN countries, there was a large reduction in the electricity demand throughout the sub-region. The utilities manning the electricity grids were required to take all necessary measures to manage their grids by ensuring load/generation balance in real-time. Further, as the ill effects of the outbreak continued for a long time, there were other challenges, including maintaining a balance between the different types of generation sources, keeping the workforce healthy and safe, and keeping the control centres free of any contamination and operational on a round-the-clock basis.

Reduced generation presented a real challenge for the system operators, as did maintaining the system voltages, which are critically high under such low load conditions. These challenges were met by the operators carrying out load restrictions on several generating units, mostly coal-based thermal units, as well as by controlling the voltages and other parameters by taking necessary proactive and corrective steps.

Thus, India, being the largest power system, was able to bring resilience by importing more power – despite its fallen demand – and support the systems of Nepal and Bhutan. On the other hand, due to drop in demand, Bangladesh was not able to import power, which was also adjusted.

Moreover, the continuity of load dispatch centre operations, particularly round-the-clock operation of the control centres, was successfully maintained by strictly following social distancing protocols and through sanitisation and closely guarded and supervised upkeep of the work area. Other support, including communication services, emergency supply services, and daily area upkeeps etc, also ensured smooth operation of the control centres. People working in functions that were not real-time and which are off-grid in nature worked from home in order to minimise interaction among personnel.

All cross-border links among the BBIN countries continued to operate without any interruption or restriction. This rendered a very useful service, particularly to Bangladesh, Bhutan, and Nepal. Due to the availability of these links, all countries were able to achieve a load/generation balance with ease. In the absence of these links, either these countries would have had to reduce/spill the generation at their plants or they may have had to impose load restrictions in the absence of adequate generation in real time.

In order to enhance mutual cooperation and support among the BBIN countries, energy secretaries of Bangladesh, Bhutan, India, and Nepal held a virtual meeting in April 2020 to evaluate the state of energy amidst the COVID-19 pandemic. Issues related to energy generation, demand and distribution were discussed and special attention was given to the demand and supply gap in the regional grid due to the crash in demand in all countries.

The safety and security of the BBIN grid remained intact, which shows the type of resilience it possesses.

 

What recommendations would you put forward to ensure electricity systems are more resilient in the future?

The region faced the following main challenges: managing the load generation balance continuously in real time; protecting the must-run status of renewable generation by dispatching it in full; absorbing the additional availability in the grid through flows through cross-border links; and ensuring the continuity of the operation of the load dispatch centres and other control centres. As the major player in the BBIN region, India’s grid played an important role in maintaining the load generation balance. All of the challenges were successfully overcome.

Learning from this, a framework for a resilient electricity grid system operation is proposed based around four key pillars of action: 1) protect the workforce, 2) protect the control centres, 3) review system margins and reserves, and 4) ensure cooperation and support among control centres.

 

Do you think the pandemic will encourage governments to ‘build back better’, creating more resilient and sustainable energy systems?

Covid-19 presented new types of challenges and also provided an important lesson; by creating a strong regional grid, the resilience of the overall grid is increased, and it brings economy and sustainability.

By connecting the smaller system with a big system, the smaller system becomes more stable, and the need to back down generation because of a drop in load gets reduced. Similarly, in the case of an increase in load, it can always get support from the bigger system.