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Dhaka Tribune

Will Bangladesh join IEX in launching a new era for electricity?

Joining it, Bangladesh and India can help each party to trade according to their demand and supply

Update : 18 Jun 2022, 12:41 PM

Over the past decade, Bangladesh has maintained a healthy relationship with India in regards to cross-border energy trade but the trade remains only in regards to import of electricity. Bangladesh began importing electricity in 2013 with only 500 MW, which has since climbed to 1,160 MW in 2022.

The amount of electricity being imported is currently around 10% of total power consumption of Bangladesh, a country that has transitioned from a chronic power shortage to a power surplus over the decades.

Now, Bangladesh has the installed capacity to generate 25,566 MW, including captive power and off grid renewable energy against the daily consumption of only around 14,000 MW, official data shows. On June 11, day peak generation in Bangladesh was 11,160 MW and it was 13,803 MW in the evening peak generation.  

The surplus prompted Bangladesh to consider export of the unused electricity to its next-door neighbours. The country has long been in talks with India to export the surplus electricity during off-peak periods. Particularly in winter, Bangladesh pays huge operational losses for the surplus power, and this unused power reaches as much as 60% of the grid power generation capacity, holding huge prospects for export.

In various Joint Steering Committees (JSC), Bangladesh flagged the issue of export but the issues remain in talks only. But for export plans, now is the time Bangladesh should strongly consider joining Indian Energy Exchange, the country’s energy marketplace, that has been pioneering cross border electricity trade with South Asian countries such as Bhutan and Nepal.

The platform has already expanded its market beyond India to create an integrated South Asian power market. Nepal has already joined IEX last year and is selling electricity to the southern neighbour’s power exchange market.

Bhutan, who has a power transmission line with India, also joined the market in January 2022 to meet its power shortfall.

Currently, just around 3,000 MW is traded in the South Asia region. India annually imports about 1,200-1,500 MW power from Bhutan and exports about 1,200 MW to Bangladesh, 500-600 MW to Nepal, and 3 MW to Myanmar.

According to Delhi-based independent research organization Integrated Research and Action for Development (IRADe), cross-border electricity trade in the South Asian region has the potential to grow to 60,000 megawatts by 2045. This estimate shows huge prospects of power trading in the region and this is why regional cooperation among the countries is crucial.

Bangladesh, despite being a buyer, still imports even on a contractual basis. Given the prospect of the exchange market, it is high time for Bangladesh to look ahead, to do whatever needs to be done to operationalize its unused electricity resources and import electricity at competitive prices.

Joining it, Bangladesh and India can help each party to trade according to their demand and supply.

Standing on the same lines under the power exchange will help Bangladesh trade electricity not only at a competitive price, but also can make procurements in a transparent and seamless process to India.

The welcoming fact is that Bangladesh already sent a proposal to the IEX very recently about interest in joining the exchange market. Now, Bangladesh must look beyond only import from India, rather speed up efforts for export via joining IEX.

There can be bottlenecks, there can be policy issues, but whatever needs to be done must get done as a priority basis.

Syed Samiul Basher Anik is a journalist at Dhaka Tribune. This article has been prepared as part of a BEI media fellowship with support of SARI/El Project Secretariat under IRADe and USAID.

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