How Much Could South Asia Benefit from Regional Electricity Cooperation and Trade?

43 Pages Posted: 20 Apr 2016

See all articles by Govinda R. Timilsina

Govinda R. Timilsina

World Bank - Development Research Group (DECRG)

Michael Toman

World Bank - Development Research Group (DECRG)

Jorge Karacsonyi

AF Group

Luca de Tena Diego

AF Group

Date Written: June 26, 2015

Abstract

The South Asia region is lagging behind many regions in the world in regional electricity cooperation and trading, despite the huge anticipated benefits. This study uses an electricity planning model that produces optimal expansion of electricity generation capacities and transmission interconnections in the long-term to quantify the benefits of unrestricted cross-border electricity trade in the South Asia during 2015?40. The study finds that the unrestricted electricity trade provision would save US$226 billion (US$9 billion per year) of electricity supply costs over the period. The ratio of the present value of benefits, in the form of reduction of fuel costs, to the present value of increased costs due to generation and interconnection would be 5.3. The provision would reduce regional power sector carbon dioxide emissions by 8 percent, mainly because of substitution of coal-based generation with hydro-based generation, although regional emissions would be well above current levels absent other policy interventions. To achieve these benefits, the region is estimated to add 95,000 megawatts of new cross-border transmission interconnection capacity.

Keywords: International Trade and Trade Rules, Climate Change and Environment, Energy Resources Development, Competitiveness and Competition Policy, Climate Change and Health, Power & Energy Conversion, Competition Policy, Science of Climate Change, Energy Finance

Suggested Citation

Timilsina, Govinda R. and Toman, Michael and Karacsonyi, Jorge and de Tena Diego, Luca, How Much Could South Asia Benefit from Regional Electricity Cooperation and Trade? (June 26, 2015). World Bank Policy Research Working Paper No. 7341. Available at SSRN: https://ssrn.com/abstract=2623783

Govinda R. Timilsina (Contact Author)

World Bank - Development Research Group (DECRG) ( email )

1818 H Street NW
MSN3-311
Washington, DC 20433
United States

Michael Toman

World Bank - Development Research Group (DECRG) ( email )

1818 H. Street N.W.
MSN3-311
Washington, DC 20433
United States

Jorge Karacsonyi

AF Group ( email )

Frösundaleden 2A
Stockholm, 169 99
Sweden

Luca De Tena Diego

AF Group

Frösundaleden 2A
Stockholm, 169 99
Sweden

Register to save articles to
your library

Register

Paper statistics

Downloads
51
Abstract Views
331
rank
391,463
PlumX Metrics