Business Times

Emerging Asian giants need to cooperate to tap energy resources

India-Sri Lanka interconnection imperative
By Sunimalee Dias

Sri Lanka this week asserted the need to increase its dependence on energy based cross-connections and insisted that its link with India was vital to meet its reserve margins and reduce prices. Speaking at the Asian Energy Summit on the theme of “Cooperation for Security, Stability and Sustainability” organized by the Independent Power Producers Association of India (IPPAI) in Colombo, the Sri Lanka Public Utilities Commission Director General Damitha Kumarasinghe said that with the current 2500 MW power system available the country’s reserve margins could be met if an interconnection was established between Sri Lanka and India.

Current talks between the two countries on the interconnection are at the feasibility stage even after having two governments overseeing the project over a period of six years. The implication of not connecting is that Sri Lanka’s high electricity prices at the moment will continue to rise unless it is interconnected, he asserted. Currently the two countries are faced with legal and governance issues that are holding back any implementation of this vital project that will help reduce electricity charges in the country as well. If connected, Mr. Kumarasinghe said it should happen in a harmonized manner. The capacity for a 2000MW connection with India is important as the country’s electricity demand is set to increase between 8-9%, Mr. Kumarasinghe said.

Initially it is expected to transfer 500MW of power and subsequently 1500 MW with a transmission line to be set up from Madurai (India) to Anuradhapura. Sri Lanka is increasingly dependent on hydro and thermal power generation to meet its energy demands. Meanwhile, the two-day conference also clearly highlighted the need for increased cooperation with Asia’s emerging giants, India and China in a bid to harness on the lucrative energy resources within the region without allowing it to spillover to the West. India’s Ambassador to Saudi Arabia Talmiz Ahamed pointed out that India has to be globalised in order to be engaged in energy.

It was pointed out that while resources are difficult to tap no country however, can maintain energy security on their own. India is set to have a hydrocarbon future with increased dependence on fossil fuels, he said adding that natural gas and methane and renewable energy topping the energy supply list.
China Institute of International Studies Vice President Dr. Rong Ying said that there was no reluctance on the part of the number one energy producer and consumer in the coal dominated energy basket China, to cooperate with India.But it was stated this will be difficult at the beginning and noted it is mostly a business operation and it would take time for both sides to cooperate. India is most vulnerable in terms of oil and likely to become the fourth largest consumer of energy in the world by 2030.

Colombo mooted for proposed Energy Security agency secretariat
The establishment of an Asian Energy Security Network was mooted to be headquartered in Colombo at this week’s Asian Energy Summit. It is believed that Colombo would be a choice destination for the Network’s secretariat as it is considered to be a neutral state with no major ideas on energy security in Asia. The idea was mooted by conference speaker and Upstream Online South Asia Bureau Chief Narendra Taneja during the two-day Asian Energy Summit held in Colombo. He pointed out that since similarly Vienna was the location for the office of the OPEC it proves good to base in Colombo for this kind of network.

On the other hand, Mr. Taneja pointed out that in the case of Riyadh selected for the headquarters of the International Energy Agency has created an impact on the organization’s progress since the host nation is from the lucrative oil rich nations, the Middle East.

A senior Sri Lankan Foreign Ministry official remarked that it would be good for Colombo to be selected for such a secretariat and they would be ready to accept it. It was noted that it would provide the necessary space for Colombo to be identified as a hub in the East adding that Asia can use energy to assert power and this would obviously reinforce the country’s hub status. In this respect, the proposal was picked up well at the conference for the establishment of a secretariat with the IPPAI as a transitional organization until it obtains the necessary governmental backing by member countries.

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