Electricity demand in South Asia growing at 5 %

Indunil Hewage

Sri Lanka should possess a multilateral power trading system covering the whole of South Asia in years ahead to meet the aspirations of the people of this region, a Public Utilities Commission of Sri Lanka top official said.

The electricity demand in the South Asian region is growing at a rate of 5 %, faster than in any other region of the world.

Hence , South Asian countries are faced with major issues and they cannot think of providing electricity as an isolated issue for individual countries anymore.

This has become a regional as well as a global issue. We need to look beyond our own countries to be able to meet the aspirations of the people of this region. To cater to these needs, regional power trading holds great promise because it is not possible for individual countries to meet the demand at the lowest prices on their own.

“The trading power and interconnections would provide a corridor for the development of operational resources.

However, we also have governance, and legal issues, market taxes versus regulated electricity trade, political uncertainties, lack of appropriate rules, and lack of transparency issues.

There are also financial issues like tariff design, determination of allowed cost and infusion of private capital that we need to concentrate on.

Then very importantly, we have the national policies and supply security issues. The supply security issue is extremely significant as far as our countries are concerned,” the official said.

He also said there are several issues related with interconnection and power trading. The first one is the technical challenge which is similar in anywhere and most of these can be effectively addressed.

Then we have commercial issues such as unrealistic prices due to subsidies.

In our region, we are aware that there are a lot of subsidies in pricing, especially subsidized fuel in many countries.

When you trade, your have to trade on equal platform and such unrealistic prices create problems when it comes to power trading.