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India should expand provisions under its electricity policy to facilitate cross-border power trade among SAARC nations as South Asia has poor electricity access, an Asian Development Bank report said.
The Asian Development Bank (ADB) said access to power in South Asia, one of the poorest regions and home to about one-sixth of the global population, is low and the South Asian Association for Regional Cooperation (SAARC) members face acute electricity shortages, adversely impacting their socio-economic development.
"The region has surplus availability of electricity supply, but a large percentage of the population still does not have access to electricity and where available, power outages of 8-16 hours per day happen in some countries in the region", the report said.
Also, there are losses to businesses due to shortages of electricity supply.
The region has abundant hydropower potential, coal reserves, natural gas reserves, large renewable energy resources and petroleum reserves that can be harnessed to become key drivers of the region's growth and energy trade has the potential to capitalise on this asset.
The Electricity Act, 2003 is the overarching policy of India that governs country's electricity sector and has all the necessary provisions to create a healthy electricity market.
Although India is exchanging or trading electricity with Bangladesh, Nepal and Bhutan in the SAARC region, the Act is silent about cross-border electricity trade, the ADB said.
A redeeming feature of the Act is that India's electricity market has been smoothly functioning under its provisions, it said.
"If the SAARC member states so choose, the requisite provisions can be adopted with suitable modification, wherever necessary, for the creation of the regional electricity market. India may need to extend the provisions of the Act to cover it's cross-border electricity trade as well," said the ADB report 'Harmonising Electricity Laws in South Asia'.
All SAARC members are dependent on petroleum imports, some even up to 100 per cent of the demand.
"Given the limited possibilities for regional trade in petroleum, natural gas, and hydrocarbon fuels, energy cooperation in South Asia has to primarily focus on cooperation in the electricity sector," said the report.