The Telegraph
Since 1st March, 1999
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- South Asia can benefit from a common market for energy

In May 1950, the French suggested a union between France and Germany for production and consumption of coal and iron. The Treaty of Paris in 1951 created the European Coal and Steel Community. Six countries were members — France, Germany, Italy and the Benelux countries (Belgium, Netherlands and Luxembourg, who were in a customs union since 1946). It began functioning from May 1953 as a common market for coal and steel, with common objectives and common institutions. This was at a time of great suspicion about Germany, especially in France, Belgium and the Netherlands, devastated by German aggression.

What started as a coal and steel community of six European countries is now a common market, the European Union of today. Nation- states have willingly surrendered power to the Union on many matters. There is a common currency, common standards for most goods and services, hassle-free travel between nations that are members, common legislation on many matters, and at most times, a consensual view on issues of significance to the world.

South Asia is burdened with the creation of two (which became three) nations by partition, with a sixty-year record of unremitting hostility between its two largest countries, India and Pakistan. The South Asian Association for Regional Cooperation was conceived for the development of south Asia and for fostering inter-regional cooperation. It has not achieved substantive progress on political or economic issues. With the opening up of the south Asian economies to global forces, trade was on the SAARC agenda.

However, SAFTA (South Asian Free Trade Agreement) is a talking shop. It lives on hope, not any concrete achievement. The hostility between India and Pakistan bedevil it. The legacy of three hard-fought wars with Pakistan (won each time by India) and the rapid economic development in India have aroused envy, not cooperation. Economic ties with Bangladesh have also not progressed, although they have with Sri Lanka and Nepal through bilateral agreements that are working well.

It is in this context that the proposal of energy cooperation between countries in south Asia becomes important. It could, if achieved, lead ultimately to a south Asian regional economic community. All of south Asia is now or will soon be short of energy. An energy community might start by attempts at harmonizing equipment, systems, methods, institutional structures and exchanging information on different ways of tackling problems, before moving on to a common grid of electricity, oil and gas and, ultimately, to an energy exchange with energy markets over the whole region. Before a common electricity and gas grid for the region comes about, we have to understand the different systems and their problems in each country and the means of coordination.

Thus, there is need for collecting and sharing of information on the laws, rules and procedures that have developed in each country. If there are independent regulators for any sector (electricity, oil and gas, coal, nuclear, non-conventional and renewable energy), we must explore impediments in the way of their effectiveness, and put their orders on key issues together to find commonalities and differences between different countries. Training of electricity regulators has been under way in the region for six years. It could extend itself to other energy sectors and to the operators in each sector. The returns on investment available in different sectors are the key to attracting investment, and must be estimated for each country. This would cover electricity generation, transmission, distribution and supply; oil and gas exploration, production, refining and distribution, and so on.

With common poverty levels, cultural and social norms in the region, there arise common problems like theft of electricity, tampering of meters, under-filled gas cylinders, adulteration of diesel, and so on. Experience-sharing to understand how the problems are tackled in each country helps to improve the systems in each.

The whole region is groaning under rapidly increasing environmental pollution because of vehicle proliferation and burning coal for power generation. The use of renewables (biomass, biogas, solar, wind) and research into developing them further have made headway in some countries. Sharing this experience could mitigate pollution and help in the evolution of an energy community.

If, in the future, the region is to have a single grid, a common template must be evolved after understanding the present differences on technical and commercial aspects of operations. Similar actions are necessary for forming a gas grid. Liquefied natural gas terminals in one country could serve contiguous areas in others. Pipeline-development might consider this.

With large numbers of people struggling to better themselves, it is the duty of governments to supply health and education to all. Energy availability to all must also be a right that must be ensured at affordable prices. Supplying energy at low cost to the poor and vulnerable sect- ions is a responsibility that governments must bear. Electric light- ing helps children’s studies and improves the quality of life for families. It contributes significantly by improving people’s capabilities. Supplying power through distri- buted generation or even gridpower through self-governing institutions is a way to enable local communities to take responsibility for their energy use and payments. This purpose requires building capacity at the local level and it can also be a common task for the region.

An urgent task for the region is the development and use of hydropower. The potential is substantial in Nepal and Bhutan, while hungry markets are immediately available in India. These could contribute substantial revenues to supplier countries. The hydrology and engineering skills, as well as experience in dealing with socio-economic impact on people, exist in the region for exploiting this potential.

Countries in the region must also commence identifying differences in standards in energy-using equipment as well as meters, online measuring equipment, and so on. This will help develop common standards for energy efficiency as well as measurements, necessary if there is to be a common energy market.

South Asian countries can benefit from common markets for energy and for other products. They can do this without giving up political sovereignties, but by coordinating technical parameters that benefit all.

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