Importance of Cross-Border Electricity Trading in Bangladesh Energy Sector

Abstract

Since there are complementarities in demand for electricity and resource endowments, which is a result of having diverse primary energy sources and differences in seasonal patterns of electricity availability and requirements, the strengthening of cross-border electricity cooperation within the South Asian region can be a revolutionary answer to ensuring sufficient and reliable electricity availability within the regional nations. Bangladesh should import electricity out of such hydropower generation through the power interconnections with neighbouring countries for a stable base load supply, energy fuel diversification and climate change mitigation. Currently, the arrangements for power transmission and trade are usually bilateral, mainly involving two governments with minimal involvement of the private sectors. However, as bilateral trade increases, expanded participation by third parties also can grow. One such example is efforts to develop power trade between Nepal and Bangladesh with India as a transit country .

This chapter is prepared from the doctoral thesis of Sakib Bin Amin and his class lectures on Energy Economics and Policy at North South University, Bangladesh.

An earlier version of the chapter was published on the Daily Financial Express on Sunday, 16 October 2016 and in the book titled “Prospects and Challenges of Connectivity and Trading in Power and Energy: A Regional and International Perspective”, jointly published by the Institute for Policy, Advocacy and Governance (IPAG) and Asian Development Bank Institute (ADBI).