Cross-border cooperation in hydropower: Emerging vistas

The value of hydropower as a clean, totally renewable, grid-friendly and inflation-free resource is well recognised. However, hydropower development has been far from satisfactory in recent years in many countries for a host of reasons such as lack of finances, higher risk perceptions on the part of investors, evacuation problems, poor local markets, geo-political issues, policy and regulatory constraints, increasing concerns of environmental and social impact, etc. The magnitude and complexity of these vary from country to country.

In the case of India, nearly 73% of its estimated potential of 150 GW is not yet developed; a number of sanctioned projects have failed to start, or have got delayed or stuck. As a result, the share of hydropower in the country's energy mix has been going down over the years. This is a matter of concern considering the country's heavy dependency on fossil fuels, emerging demand patterns and our ambitious programme for harnessing wind and solar power, which need support of adequate flexible generation. Looking at the hydro-rich countries beyond the borders has assumed added importance in this context.

India's quest for cooperation in hydropower

For the past few decades India has been pursuing bilateral cooperation with Bhutan, Nepal, Myanmar and Afghanistan. While there have been some positive outcomes in case of Bhutan and Nepal, though not to the same levels, it has not been so with the others.

Cooperation with Bhutan had recently been hailed by the Indian Prime Minister as "a classic example of win-win cooperation and a model for the entire region". The three projects, namely Chukha, Kurichu, and Tala with a total capacity of 1416 MW are already under commercial operation. Surplus power from these projects to the tune of about 5,000 MU annually is being exported to India and in the process Bhutan is also getting a significant boost to its economy. Spurred by this success, the two governments had also agreed to develop 10,000 MW of hydropower in Bhutan by 2020. It is expected that by 2020 over 17,000 MU of clean energy would flow between the two countries. The joint statements issued by the Indian PM and President during their visits to Bhutan in June 2014 add credence to this.

Nepal presents a somewhat different story. Although it has perennial rivers and ideal topography for development of hydropower, hardly 2% of its potential has been developed. So power exchange with India is limited to about 50 MW. Accelerated power development and grid strengthening assume special importance in this context. There have been a number of initiatives in the past for developing a few large projects like Karnali, Pancheshwar, Saptakoshi, etc. But these did not materialise for a variety of reasons such as local disturbances, political instability, resource constraints, policy, regulatory and institutional issues, lack of transmission facilities, etc. However, the situation has been changing of late and an investor-friendly environment is emerging. GMR of India is now developing the 900 MW Upper Karnali project. The much delayed 5,600 MW Pancheshwar project is also getting revived following the recent visit of the Indian PM to Nepal. Thus, Nepal also holds bright prospects for a boost in the hydropower generation in the region. Storage projects, which could not only provide clean power but also support large-scale grid integration of solar and wind power, would merit special attention. The impact of the massive earthquakes that rocked the country recently, which reportedly affected nearly one-fifth of Nepal's total power supply might however cause some delays and increased concern on the social and environmental fronts.

Beyond bilateral co-operation

The boost in bilateral cooperation should also make a strong case for looking at co-operation at sub-regional and regional levels. The benefits that would accrue from such co-operation have been brought out in a number of studies done by different national and international agencies. Though not much progress has been realised in this regard primarily due to geo-political reasons, the situation seems to be improving now. For example, the press release issued by the joint working group on sub-regional co-operation involving Bangladesh, Bhutan, India and Nepal in January 2015 indicates bright prospects for establishing a quadrilateral electricity grid involving these countries. Hydropower would be a main mover in this. This could also eventually pave the way for evolution of a South Asian electricity grid. The successful operation of the regional and sub-regional electricity supply systems in East Asia, Africa and Central America could provide some valuable lessons in this regard.

A commonly agreed strategy is necessary to ensure that agreements entered into between the countries are translated into action in letter and spirit and we soon realise a regional electricity grid. This is also important to instill confidence in investors. The following action areas merit special focus in this context.

Comprehensive techno-economic studies are need¬ed to identify the costs and benefits. These should be based on a transparent and reliable data base on resource availability and demand growth. Since most of the projects may be located in areas prone to high intensity earthquakes special emphasis should be given to the design of dams and other structures. Similarly likely changes in hydrological data resulting from glacial melt and other climate change phenomena would also merit consideration. Environmental and social impact studies should be based on a basin-wise approach covering both upstream and downstream regions. Active involvement of partner countries in these studies would be important to have eventual acceptance of the results.

Efforts to communicate with the public should be stepped up alongside. The communication strategy should help dispel any misgivings on the part of the public related to sharing of costs and benefits and resettlement issues. Adoption of the Sustainability Protocol and Sustainability Guidelines formulated by the International Hydropower Association would be useful in ensuring public engagement right from the start.

Special emphasis should be given to development of a well-knit intra and inter-regional transmission network taking a long-term basin-wise approach. This is important to minimise right-of-way constraints and the possibility of congestion in power transfers. Harmonisation of planning and operational standards for grid safety and reliability should also merit attention in this context.

A building block approach starting with bilateral trading may be a prudent strategy to build mutual trust, but the vision should be to enlarge it and include more countries in the region.

High capital costs of projects and lack of domestic finances are often major barriers in taking up large cooperative ventures. While international aid may be forthcoming in some cases it would also be important to look at private and public-private participation opportunities. Similarly technical and institutional support may be lacking in some cases. Requisite policy and regulatory changes should be ensured for this purpose.