ISLAMABAD: Coal would remain a predominant energy resource to generate electricity in South Asia in future.

It would account for more than half of the total installed capacity in the region by 2040 because of its cost competitiveness as compared to other technologies to generate electricity.

The South Asian region’s power generation trajectory in the baseline modeling analysis is dominated by coal, with more than 60 per cent of the total electricity generation during 2015-2040 based on coal while 25 per cent of total electricity generation would be from renewable sources, including hydro, said a World Bank study prepared by a team of environment and energy group.

The South Asian region is lagging behind many regions in the world in regional electricity cooperation and trading despite huge benefits, says the study.

A study on “How much South Asia could benefit from regional electricity cooperation and trade?” points out that major barriers in the South Asian region have included limited cross-border transmission links; the presence of bottlenecks in the domestic energy infrastructure; poor operational efficiency, financial performance and creditworthiness of the utilities in the individual countries; and long standing political disputes.

Regulatory reform and harmonisation, reduction of trade-distorting inefficient national regulations, and cooperation to overcome domestic limits on institutional capacity are additional important components for more fully realising the benefits of regionalising electricity markets, the paper further points out, according to the study released this week.

Cross-border electricity transmission interconnections and electricity exchanges among South Asian countries have been very limited to date, implying that countries in the region may be missing significant opportunities for gains from trade through lower regional electricity supply costs.

The study estimates that total regional capacity is anticipated to increase by 3.8 fold, from 276GW in 2013 to 1,067GW in 2040. More than 70 per cent of the total regional capacity would be installed in India. Bangladesh, India, Pakistan and Sri Lanka would have large shares of coal in total electricity capacity. As of 2020, the share of coal-fired generation capacity in the total installed capacity would be 19pc, 60pc, 34pc and 16pc, respectively, in those four countries. The corresponding shares in 2040 would be 67pc, 58pc, 45 pc and 37 pc.

Published in Dawn, July 5th, 2015

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