Bangladesh’s Prime Minister Sheikh Hasina, who was in India only a fortnight in the past to attend the swearing-in of the Narendra Modi authorities, was again in New Delhi on June 21-22 on a bilateral state go to, which was the primary by a international chief after the inauguration of Modi’s third time period as prime minister.
In a press convention on the finish of her go to, Hasina described it as “brief but fruitful.” The go to seems to have cleared the air in New Delhi concerning hypothesis about Bangladesh’s much-talked-about tilt in the direction of China, supposedly undermining Indian pursuits within the area.
Probably the most notable consequence of the go to was a rail connectivity settlement between the 2 nations that can enable India to make use of Bangladesh’s rail community to move items to its northeast. India has additionally agreed to increase transit amenities to Nepal and Bhutan for Bangladeshi items by its railway networks.
Bangladesh additionally has given its approval for India to ship its specialists to judge the Teesta River Undertaking. China submitted a proposal to develop the mission, which has raised considerations in India.
Whereas some commentators predicted a tug-of-war between India and China over the mission, Hasina noticed in her post-India go to feedback that India has a good probability of successful this bid since that can solve the longstanding water-sharing issue with India across the river.
Whereas most different agreements and mutual understandings revolve round capability constructing in several sectors, Bangladesh has an enormous alternative to realize from one deal specifically: the opening up of energy connectivity with Nepal and Bhutan through India.
In response to the joint statement issued on the finish of the go to, India and Bangladesh have dedicated to increasing “energy and power collaboration” and creating “intra-regional electrical energy commerce.” It will begin with expediting the development of a 765 kV high-capacity grid with appropriate Indian monetary help.
As a result of risky situation of gas and power markets because the Russian invasion of Ukraine, fossil gas costs have confronted a lot tumult, usually rising past anticipated limits. Due to Bangladesh’s subsequent power insurance policies, the nation’s efforts to impress all households by 2021 resulted in a heavy reliance on imported fossil fuels, primarily fuel and coal.
Bangladesh’s import funds information reveals a soar in petroleum product imports. The World Financial institution recognized petroleum merchandise as a driver of Bangladesh’s surging imports in April 2023. This, together with different principal commodities, created strain on the nation’s steadiness of funds, forcing Bangladesh to impose import restrictions and slowing down the financial system.
Excessive gas prices and imports are additionally driving electrical energy technology prices in Bangladesh, which grew from 7 cents/kWh in 2020 to round 11 cents/kWh in 2023. Greater than half of all electricity produced in 2022-23 FY in Bangladesh got here from gas-fired energy vegetation. The common electrical energy technology price from fuel remained a lot decrease for many years due to the pure fuel reserves. Nonetheless, Bangladesh turned to importing LNG because the pure fuel reserves are depleting on account of rising calls for.
In response to Bangladesh’s energy division estimates, the price of producing electrical energy from LNG stood at around 15 cents/kWh. On this context, the price of producing electrical energy is predicted to develop with the present energy combine until the worth of imported fuels drops drastically.
That is the place the power connectivity with Nepal and Bhutan can present Bangladesh with a respite.
Nepal and Bhutan are among the many few nations that produce virtually 100 percent electricity from renewables. Nepal alone has an economically viable hydroelectricity potential of round 40,000 MW. Its energy demand is estimated to be around 13,000 MW in 2035. It plans to increase its generation capacity by using its full potential and exporting the surplus electrical energy to neighboring nations.
Bangladesh, Nepal, and India have been in talks over energy transmission from Nepal to Bangladesh by India for the previous couple of years. In response to Day by day Observer, a pro-government every day in Bangladesh, the tariff is below 7 cents/kWh. Though it’s unclear whether or not the tariff contains India’s service cost, this determine is considerably decrease than Bangladesh’s common energy technology price and half of the price of electrical energy coming from LNG-fired energy vegetation.
Therefore, the power connectivity cope with India will enable Bangladesh to import cheaper and cleaner electrical energy produced from renewable sources in Nepal and Bhutan, thus decreasing their dependency on imported fossil fuels for energy manufacturing. Bangladesh already has a plan in place to import 9,000 MW of electrical energy from neighboring nations.
Nonetheless, some important challenges persist.
Bangladesh has dozens of lively, long-term power purchase agreements with energy vegetation commissioned within the final decade. If Bangladesh plans to import a big a part of its electrical energy from neighboring nations – Nepal, Bhutan, and India – the Bangladeshi energy vegetation are anticipated to take a seat idle, and Bangladesh will probably be pressured to pay a big sum of cash in capability modifications to them.
For Nepal, the problem is round accumulation of resources and funding for energy technology and transmission, because the nation goals to provide round 30,000 MW by 2035 and export a big portion of it.
With India’s lively assist, a collaboration between the private and non-private sectors in Nepal and Bangladesh, backed by the event monetary establishments (DFI), may also help overcome the challenges. International hydropower giants will also be invited to put money into these tasks.
In the meantime, to scale back the burden of capability prices and gas imports, Bangladesh can contemplate getting into right into a discount with the prevailing fossil gas energy vegetation to plan for early phase-out.
