Energy Challenges and Infrastructure Development in South Asia

Energy Challenges and Infrastructure Development in South Asia

Sudhakar Patra (Berhampur University, India)
DOI: 10.4018/978-1-5225-2364-2.ch009

Abstract

The present chapter seeks to analyze the trend and growth of energy production, supply, growth, consumption and trade in South Asian countries based on data from 1971 to 2011 collected from World Bank data base, South Asia Development reports, Energy Outlook, ADB database. While India, Pakistan, and Bangladesh account for the major natural gas and coal resources, Bhutan and Nepal have large hydropower resources. The study suggests that South Asian countries need enhanced regional energy transfer to leverage economies of scale through a more vibrant intra and inter regional energy trade structure. Mobilizing financial resources to develop the necessary energy infrastructure is a major challenge to enhance energy security in the region. Therefore, South Asian countries need to develop policies that will attract investment in the region.
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Introduction

Energy and its resources lie at the heart of the future prosperity of the South Asian region and the well-being of its large population. South Asia houses nearly 1.4 billion people which are around 25% of the world’s population and it has a sizeable energy deficit that is filled up by imports. South Asian nations are faced with rapidly rising energy demand coupled with increasingly insufficient energy supplies. Most of South Asia is already grappling with energy shortfalls, typically in the form of recurrent, costly, and widespread electricity outages. In India alone, the current electricity supply/demand deficit is around 8%, with a peak demand deficit of about 12%; yet a large part of the population is not yet connected to the electricity grid. Improving the supply of energy, particularly the supply of electricity, is an important priority of national and local governments emphasizing the firm belief that development and energy use go hand in hand. The term, ‘energy access’ has a dual meaning in South Asia; on one hand it implies an open access regime in which the urban, middle class consumers are offered a choice of energy to select from, and on the other it implies the enormous task of creating access for the large number of poor people who are still dependent on traditional energy sources. It is these poor who will be a factor in infrastructure development and the eventual energy future of South Asia. Looking at the current energy scenario in South Asia, we see a remarkable contrast — great demand and huge absolute consumption with extremely low per capita consumption; it is this South Asian situation that has been described as the ‘Asian energy pattern’. Although the South Asian region is a repository of the poorest people in the world, with more people without adequate access to energy than South Asia's commercial energy mix in 2012 (South Asia Energy Report, 2014) was 46% coal, 34% petroleum, 12% natural gas, 6% hydroelectricity, 1% nuclear and 0.3% ‘other’. There are significant variations within the region reflecting the nature of indigenous energy resources and amount of fuel that has to be imported. Bangladesh’s energy mix is dominated by natural gas (66.4%), while India relies heavily on coal (54.5%). Sri Lanka and the Maldives are overwhelmingly dependent on petroleum (82% and 100%, respectively); Pakistan is diversified among petroleum (42.7%), natural gas (42.2%), and hydroelectricity (10%). The Himalayan countries of Bhutan and Nepal have the highest shares of hydroelectric power in their energy consumption mix at 80% and 31%, respectively. All these data discount the ‘non-commercial’ or ‘traditional’ sources of energy including animal waste, wood, and other biomass, which except for India and Pakistan form the dominant source of energy.

The low per capita energy consumption in South Asia, achieving targets such as electricity for entire populations; the ‘Power for All’ policy that India has adopted would be a gigantic task for the region. Besides economic growth, energy demand will increase from improved standards of living of the population, as more and more people enter the commercial energy market. As the population becomes urbanized and as standards of living improve, the changes in the nature of energy consumption, popularly known as energy transition also assumes great importance. Much of the energy demand comes from the rising urban centres and the new industries. South Asia is experiencing rapid urbanization; it has a large number of million-plus cities, including 10 million plus mega-cities that create a great energy demand. Yet, the vast majority of the population living in rural areas still depends on traditional (or non-commercial) energy sources, but gradually changing over to commercial fuels. Nearly 680 million people in rural areas and 110 million in urban areas of South Asia are without access to electricity (IEA, 2002). Providing energy to these poor, enabling them to switch over from traditional to modern sources, will be at the centre of sustained economic growth and improved well-being of South Asian nations.

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