President Dissanayake undertook a successful visit to India recently. The joint statement, which mentioned almost all aspects of bilateral cooperation had a significant focus on the energy sector.
It is well known that Sri Lanka has been in discussions with India for a long time to implement a power grid interconnection project. Politics and lack of ambition has inhibited the project from realization.
India has a power grid interconnection with many of its neighbours- Nepal, Bhutan and Bangladesh, with all these countries benefitting. For example, Bhutan is able to sell its hydroelectric power for which it earned approx.. USD 11 million in 2022. Nepal which started as an importer of electricity is now a net exporter of power to India.
India which aims for net zero emissions by 2070 is seeking renewable energy from all possible sources. Bhutan exports almost 75% of the power that it produces to India and is seeking to increase its power generating capacity to export more to India.
Bhutan aims to own 25 gigawatt of annual power generation capacity – 20 GW hydro and 5 GW of solar – by 2040, while Nepal seeks 28 GW generation capacity in the next 10-12 years. Both are eyeing Indian investments to develop this potential.
Indian private companies like Tata Power, Adani Group and Reliance Power have signed agreements with Bhutan’s State owned Druk Green for building hydroelectric projects. Nepal, reportedly, is also pitching for Indian investments.
Bangladesh, which has a significant industrial base, has also been benefitting from the cheap Indian power since 2014. Now, it has another source of power, with Nepal selling it power through the Indian grid. Recently, sale of 40 MW of power was agreed between Nepal and Bangladesh. Since they could both use the existing Indian grid, the unit cost of electricity was extremely competitive. As per some industry experts, it the cost of power was half of the coal power that is currently produced in Bangladesh.
According to the Energy Scenario of Bangladesh (2022-2023) published by the Energy and Mineral Resources Division of Government of Bangladesh in February 2024, renewable energy is only 2% of the total generation of power in Bangladesh (24,911 MW). There is an urgent requirement for renewable energy in Bangladesh. It is important for Sri Lanka to leverage this opportunity.
Expediting the power grid interconnection with India, will not only allow Sri Lanka to export to India but also Bangladesh, another large market that will need renewable energy. The export earnings from the export of power can be used to provide relief to vulnerable sections in Sri Lanka. It is important for Sri Lanka to move fast or this opportunity will be taken by Nepal or Bhutan.
