Energy Crisis in South Asia: A Matter of Regional Cooperation

Energy is integral to the economy of every state today. The growing global population has immensely increased the demand for energy resources. South Asia was estimated in 2014 to have a population of 1.7 billion and a GDP of $2.6 trillion. It is expected that 3 billion people will join the global middle class over the next two decades and the majority of them will be from emerging Asian states. With this pace of population growth, energy requirements will soar. The International Energy Agency defines energy security as having “uninterrupted energy resources at an affordable price.” In ensuring energy security, supply security is essential. For example, the European Union’s energy policy is based on three pillars: efficiency, sustainability and security of energy supplies. South Asia is facing several insecurities including energy shortage. The crisis of energy does not lie alone in shortage rather supply shortages, rapid increases in demand for energy, and price fluctuations are paralyzing the region’s energy capacity.

The problem of energy shortages is common in South Asia. In 2012, India experienced two major power breakdown sand, at the same time, annual energy demand in India is growing at 4% while official figures show a shortage during peak hours of approximately 10%. Similarly, Pakistan has been facing a power shortage since 2007. There are regular power outages to manage the electricity demand and supply gap. It is estimated that by 2030 Pakistan’s electricity demand will reach 50,000 MW. In Bangladesh, only 30% of rural households  have access to the electricity grid and about half of the total population lives without access to electricity. Nepal faces power outages of about 20 hours during the dry season.

However, the states of the region are not devoid of energy resources. There is a huge diversity of resources in the region, namely, oil, gas, coal, hydro power, wind, and solar energy. India tops the region in oil resources with a potential 5,576 million tons of oil equivalent followed by Pakistan with 3,600 million tons, and Bangladesh with0.96 million tons. Afghanistan leads in gas resources with 120 billion cubic meters, while Pakistan possesses 7,985 billion cubic meters. Viable coal resources are also immense in the region. Potential coal reserves in India are 245,690 million tons, while Pakistan has 185,000 million tons and Bangladesh 2,715 million tons. The region also has huge untapped hydropower potential– only 9% of an estimated 437,000MW has been tapped. As energy demands grow in the region, states collectively and individually lack the vision to grasp the intensity of the power supply-demand gap and to diversify their energy resources. Though India and Pakistan have some diversity in energy supply sources, Bangladesh is heavily dependent on gas and Sri Lanka on oil. Nepal and Bhutan rely majorly on hydro power. Meanwhile, Afghanistan’s demand is met by imports from Central and West Asia.

Governance is one of the major reasons behind several problems in South Asia. Although South Asian states are planning many power projects, they are lagging behind the estimated targets. During Eleventh Five Year Plan of India (2007-2012), the planned capacity addition to the national grid was 21 Gigawatts but by the start of 2011, less than half of this had been achieved.

Energy cooperation within the region could solve various regional conflicts and problems. There already exists intra-regional energy trade but it needs to be enhanced. Nepal and Bhutan still have huge potential for further exports of hydroelectricity. If the regional states commit to seek a solution, the energy crisis in South Asia can resolved within the region to a large extent.

The few most deliberated projects of the region are the Iran-Pakistan-India gas pipeline, the Trans-Afghanistan pipeline (TAPI), and the Central Asia-South Asia 1000 electricity project. Iran and Pakistan are committed to complete the Iran-Pakistan project by 2017. After Iran’s nuclear deal with the West, the road is further clear to accomplish the project as Pakistan is facing a severe gas shortage. Iran has already completed its part of pipeline.

TAPI is a project which will connect two of the most important regions of the world, i.e. Central Asia and South Asia. After Russian gas giant Gazprom stopped purchasing gas from Turkmenistan, it is keen to diversify its gas market. Apparently, financing problems have been resolved by Turkmenistan and all the states have the determination to pursue the project as soon as possible. CASA 1000 is a project for the export of surplus electricity from Central Asia to South Asia. During the summers, the electricity will be exported to Afghanistan and Pakistan. Pakistan, Afghanistan, Kyrgyz Republic and Tajikistan are active in pursuing electricity trade and it is vowed to increase it in coming years. Inter-regional trade agreements are a step forward towards resolving regional energy crisis. But if regions can engage in energy trade, South Asian states have better opportunity to share their energy resources.

South Asian states have various problems in common. This region is facing population growth, rapid urbanization, and industrialization, which have put immense pressure on the existing energy infrastructure. This region faces non-traditional and traditional threats. Inter-state conflicts are also decades old. Energy is an integral ingredient for economic development which is the need of hour in the region. Energy cooperation can open up avenues for further mutual development, regional stability, and conflict resolution.


Image: Prashanth Vishwanathan-Bloomberg, Getty

Posted in , Cooperation, Crisis, Energy

Zainab Ahmed

Zainab Ahmed

Zainab Ahmed is completing her MPhil in International Relations at the University of the Punjab, Lahore. Her areas of research include conflict politics, regional security, human security, non-traditional threats, and conflict resolution through economic integration.

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4 thoughts on “Energy Crisis in South Asia: A Matter of Regional Cooperation

  1. Zainab – Energy shortages are a huge problem facing multiple countries in the region. How much of a role do you see renewable energy resources’ (hydro, wind, solar) playing to fill the gap between energy supplies vs. demands? What potential do you see for cooperation on renewable energy, whether from within the region or from outside? Are there certain countries more likely to engage on this front? Thanks.

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