SARI/EI’s APPROACH AND PROGRESS South Asia Regional Inaugural Conference Of SARI/EI On

1. SARI/EI’s APPROACH AND PROGRESS South Asia Regional Inaugural Conference Of SARI/EI On “Cross-Border Electricity Trade” 4th-5th Ocotber,2013 DR. JYOTI PARIKH Executive Director Integrated Research And Action For Development

2. About IRADe • An autonomous advanced research institute, established in 2002. • Conducts multi disciplinary research and policy analysis from multi stakeholder perspectives • Connects disparate stakeholders such as government, non-governmental organizations, corporations, academia and financial institutions. • Engages in national and international dialogue for consensus building South Asia Regional Inaugural Conference of SARI/EI on ‘Cross-Border Electricity Trade’

3. Thematic Areas South Asia Regional Inaugural Conference of SARI/EI on ‘Cross-Border Electricity Trade’

4. Key Activities South Asia Regional Inaugural Conference of SARI/EI on ‘Cross-Border Electricity Trade’

5. SARI/EI Objective PROMOTE ENERGY SECURITY SARI/E Participating Countries AFGHANISTAN • Activity Areas • Cross Border Energy Trade Infrastructure interconnections • Energy Markets FormulationPrecursor and full mechanisms for transparenttrade practices • Clean Energy AccessEfficiency, conservation, and renewable sources • Afghanistan Power Sector Capacity Building NEPAL BHUTAN PAKISTAN INDIA BANGLADESH SRI LANKA . . . MALDIVES

6. Earlier Phases of SARI/EI Phase 1 (2000 – 2003) • TRUST & CONFIDENCE • Starting a dialogue • Studies on possible linkages Private sector & Civil society Phase 2 (2004-2006) Decision makers, Institutions Public opinion • ADVOCACY • Studies on socio-economic benefits • Media, Regional Models, & Track 2 dialogue Phase 3 (2007-2012) Decision makers, Private sector & investors • ENERGY SECURITY • Cross Border Trade & Investment • Clean Energy Access; Institutional Capacity

7. Twelve Key Cross Border Infrastructure Activities in the last Phase • REGIONAL • SATURN Network formation and Induction of POWERGRID as SATURN member • NEPAL • Expert review of Transmission Service Agreements and Key Issues • BHUTAN • Executive Exchange to Bhutan Power Corp. • PAKISTAN • CASA 1000 Advisory Services M • BANGLADESH • HVDC training at PGCIL sub-station • Senior Level Exchange Program to Indian Energy Exchange , PTC and CERC B B • INDIA • Bilateral Electricity links to Bangladesh, Sri Lanka and Nepal • Spread energy exchange models & training • SRI LANKA • India-Sri Lanka Submarine Power Transmission Interconnection- • Interconnection Reliability and Stability Study for CEB, Sri Lanka Wind power development • HVDC Hands-on training at PGCIL sub-station • MALDIVES • Maldives Submarine Cable Interconnection Study • Workshop on Advancing Low Carbon Growth Through Regional Cooperation and Cross-Border Energy Trade B = Bilateral trade M = Multi-lateral trade . . . B . .

8. SARI/EI Phase IV • The new phase has been renamed as South Asia Regional Initiative for Energy Integration (SARI/EI) • Commenced in October 2012 and will run till September 2017 • IRADe, a regional organization, is the implementing partner • Possibilities of collaboration between SARI/EI and SAARC Energy Center are being explored • SARI/EI will try to facilitate the formation of the Electricity Regulatory Association of South Asia

9. Ourapproachiscustomizedtotheneedsof eachcountry • InnovationforOurEnergy • EarlyphasesofSARI/Econcentratedona“topdown”processfocusingon • bringingpartiestogetherandidentifyingadecisionmakingframeworks • fordevelopingprojects. • •The current SARI/Eprogramfocusisonademanddriven“bottomup” • developmentparadigmspecificforcross-borderprojectdevelopment. • SARI/EI will support a multi-stakeholder platform to convene, deliberate and • provide recommendations in the following three areas: • i. Coordination of policy, legal and regulatory issues • ii. Advancement of transmission systems interconnections, and; • iii. Establishment of South Asia regional electricity markets

10. Our Common Woes • Low income • Lagging behind in development goals • Low or no energy access to poor • Low electricity consumption per capita • Heavy dependence on Traditional fuels • Heavy dependence on imported fuels South Asia Regional Inaugural Conference of SARI/EI on ‘Cross-Border Electricity Trade’

11. Opportunities for Trade Due to Diversity in Demand and Supply South Asia Regional Inaugural Conference of SARI/EI on ‘Cross-Border Electricity Trade’

12. Hydro-electric Potential of Around 350 GW in the South Asia South Asia Regional Inaugural Conference of SARI/EI on ‘Cross-Border Electricity Trade’

13. Cooperative Grant Agreement • USAID and IRADe entered into cooperative grant agreement No AID-386-A-12-00006 effective 1st October 2012 for a period of 5 years. Objective of the USAID SARI/EI’s initiative • To create the right ‘enabling’ environment to support establishment of a South Asia Electricity Market and • gain consensus and support from the key decision makers by engaging a wide variety of stakeholders. • Road map for integration and how to get there South Asia Regional Inaugural Conference of SARI/EI on ‘Cross-Border Electricity Trade’

14. SARI/ EI Framework • Task Force 1: Harmonization of Policy, Legal and Regulatory Issues • Task Force 2: Advancement of transmission system interconnection • Task Force 3: Establishment of South Asian Regional Electricity Market Contd… South Asia Regional Inaugural Conference of SARI/EI on ‘Cross-Border Electricity Trade’

15. Project Steering Committee (PSC) • Role of PSC provides overall strategic directions to ensure political buy in of the technically sound recommendations from taskforces, studies and workshops. • Composition: • Members are Senior level officials from the country governments, eminent representative of regional institutionslike SAARC Energy Center, Representative of multilateral donor like ADB, Independent Energy Experts/Diplomats • First meeting in New Delhi on March 12, 2013 • Provided inputs to the Terms of References of the Task Forces and agreed to build consensus about regional energy integration and cross-border energy trade in the region. South Asia Regional Inaugural Conference of SARI/EI on ‘Cross-Border Electricity Trade’

16. Task forces

17. Overall Working Methodology of Task Force: Bottom Up Approach and Building Strategic ownership. • Task force is at the heart of the SARI/EI Program . • TF will follow a highly structured and participatory approach. • Members are the owners of the Task Force and its outcomes . • Members the point of contact for their country and will carryout out the various work pertaining to the activities of the taskforces. • Members if want to carryout a study to get the work done for the Task force , may ask the need for doing the same , IRADe will arrange consultants for the same. • IRADe will provide technical, organizing and coordinating support for this if needed. • PSC committee will also be consulted and their guidance/directives will also be taken in account in conducting the working of the Task Forces. South Asia Regional Inaugural Conference of SARI/EI on ‘Cross-Border Electricity Trade’

18. Task Force 1: Harmonization of Policy, Legal and Regulatory Issues TF1 Objectives • Aims to harmonize the legal and regulatory framework • Define the ground rules on the allocation of costs and risks • Legislate these ground rules and create a congenial environment for investors in generation and transmission Members • Members from participating nation’s power ministries • Regulating Commission/Regulating Authorities • Other policy making bodies who are key decision makers and well versed with policy, legal and regulatory practices in the area. South Asia Regional Inaugural Conference of SARI/EI on ‘Cross-Border Electricity Trade’

19. Task Force 1: Harmonization of Policy, Legal and Regulatory Issues Key Deliverables • Aligning National Electricity Policy to recognize CBET as an integral part of the national electricity plan by reviewing existing electricity plan and review of laws , acts ,policies. • Compilation of South Asian Electricity Policies for 25 – 30 years. • To evolve Regional Electricity Policy with a 25 to 30 year time horizon in consultation with Planners. • Develop regulation and Policy Coordination Template and Develop a regulatory pathway/Road Map for establishment of a South Asian Regional electricity Market starting with the minimum set of enabling regulatory and legal provisions • Investment guidelines and policies applicable across South Asia. Risk analysis and mitigation policies • Standard formats for Bid Documents and Power Purchase Agreements.

20. Task Force-2: Advancement of Transmission System Interconnection Objective • Identify technically and economically feasible cross border interconnections considering generation capacity additions in pipeline over next 20-30 years • Formulate required coordination procedures for stable regional/national grid operations • Develop a long-term road map providing to prospective investors to set up power plants within the South Asia region with minimum level of power flow congestion Constitution Generation and Transmission Infrastructure Planning Task Force constitutes of nominated members from participating South Asia nations engaged in • Power System Planning • Power System Operation • Power System Design functions South Asia Regional Inaugural Conference of SARI/EI on ‘Cross-Border Electricity Trade’

21. Task Force-2: Advancement of Transmission System Interconnection Key Deliverables • Prepare Regional Electricity plan in 25-30 year time frame in periods of 5 years based on National plans . • Assess CBET opportunities in 25 – 30 year time frame • Develop Standard Technical specifications for equipment of different voltage levels with parameters and list of codes to be prescribed for cross border equipment • develop coordinated system operating procedures to be adopted for import export tie lines. South Asia Regional Inaugural Conference of SARI/EI on ‘Cross-Border Electricity Trade’

22. Regulators’ Workshop, Kathmandu February 2013: 1 • SA Countries are at various levels of power sector reforms, electricity regulation and institutional reforms • Need transparency, accountability, fairness and markets for confidence. • Private sector participation for long term success • Independent regulatory authorities are needed. South Asia Regional Inaugural Conference of SARI/EI on ‘Cross-Border Electricity Trade’

23. Regulators’ Workshop Kathmandu February 2013: II • Open access in transmission, Independence of system operator, payment security etc. are the concerns. • Can help to attract private generation through • Transparency in operation and tariff fixation • Improvement of Grid Discipline (UI Mechanism) • Encourage power trading (within the country) • Help to reduce market prices for electricity and empowered consumers. South Asia Regional Inaugural Conference of SARI/EI on ‘Cross-Border Electricity Trade’

24. Analytical Studies Objective: • As per Project Implementation Plan (PIP), studies for issues concerning respective Task Forces will be carried out as an integral part of this project. • Provide Demand Driven Support to Task Forces with focus on techno-economic, regulatory and energy market aspects • Inputs from Task Force members on relevant details of their countries and in turn would be part of discussion in the Task Force and Steering Committee meetings. • Constitute Part of consensus building activity and Capacity Building • Studies done for the South Asia regional energy trade in previous phases will be utilised and the focus will be to determine what is missing. • Study Execution • In-house by IRADe • External consultants South Asia Regional Inaugural Conference of SARI/EI on ‘Cross-Border Electricity Trade’

25. SARI/EI TECHNICAL PARAMETERS: NEED FOR COORDINATION South Asia Regional Inaugural Conference of SARI/EI on ‘Cross-Border Electricity Trade’

26. SARI/EI Laws and Acts: Apex legal and Regulatory Institutional Framework South Asia Regional Inaugural Conference of SARI/EI on ‘Cross-Border Electricity Trade’

27. Integration of Studies with the Task Force Activities Task Forces TF1, TF2, TF3 Review of results of status and study reports Demand of study/analysis Discussion of analysis in TF meetings Data, analytical questions, scenarios for modeling Analytic Support Group South Asia Regional Inaugural Conference of SARI/EI on ‘Cross-Border Electricity Trade’

28. Study Methodology South Asia Regional Inaugural Conference of SARI/EI on ‘Cross-Border Electricity Trade’

29. Study Deliverables • Development of long-term electricity generation and transmission plans for increased regional energy cooperation • Assessment of economic and electricity sector impacts • Statement of Opportunity for South Asian Electricity System for prospective investors and consumers (PMEP) • Regulatory Investment Test Report (PIP) • Renewable resource assessment using climate data and Renewable Energy integration(PIP) • Findings of market simulation analysis on prices for all South Asian zones (PIP) • Draft set of Market Rules for Regional Electricity Market (PIP) South Asia Regional Inaugural Conference of SARI/EI on ‘Cross-Border Electricity Trade’

30. Way Forward • The culmination and success of regional power sector cooperation would depend on strong political consensus and continuity of political support. • SARI/EI envisages consensus building among respective government departments, ministries, private sector and organizations/agencies affiliated to the electricity sector across the participating nations to identify and address relevant issues. • A broader regional energy cooperation framework may also include, sharing of regional best practices for implementing reform of the sector, setting up independent regulatory institutions, implementing efficiency improvement programs, training of personnel and testing of equipment. South Asia Regional Inaugural Conference of SARI/EI on ‘Cross-Border Electricity Trade’

31. Thank You 1st Meeting of Task Force 2 Advancement of Transmission System Interconnection