Cross-border power trading in South Asia: Modelling analysis to assess economic benefits

There has been an unprecedented growth in electricity demand in South Asian countries in the last decade - most notably in India. There are significant economic and reliability benefits of power trading on a regional basis among the South Asian countries that largely remain unexploited to date. For instance, large scale power trading between India and Nepal/Bhutan can unleash massive hydro potential in excess of 100 GW that could be the key to reducing fuel costs, unserved energy and CO₂ emissions throughout South Asia. This study is one of the first attempts to put in context how significant these benefits can be even in the short term. We have undertaken a modeling study that includes load flow analysis, transmission constrained investment and dispatch optimization and Monte Carlo simulation of unserved energy, to assess these benefits. We have estimated annual benefits for the year 2016/17 which shows economic and reliability benefits for a single year may justify the entire investment needed in the interconnection infrastructure. If we consider the significant environmental benefits in terms of CO₂ reduction, total benefits would further outweigh the costs.