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2009-04-27
Honorable Minister Seneviratne, Secretary Ferdinando, Chairman Deheragoda,
Dr. Narendran, Mr. Daranganama, and Mr. Padmanaban, Ladies and gentlemen,
Good evening and a warm welcome to all of you.
The U.S. Government is pleased to support this regional initiative to increase cooperation, trade, and development amongst countries in South Asia. This program is funded by the U.S. Agency for International Development, or USAID, the development agency of the U.S. Government, through its South Asia Regional Initiative for Energy or SARI Energy.
USAID, in partnership with the Government of Sri Lanka’s Sustainable Energy Authority has sponsored this evening’s event to launch South Asia’s first Regional Center for Energy Efficient Lighting which will encourage collaborative efforts among the eight countries of the region to increase energy security through sustainable development.
I would like to congratulate the Sustainable Energy Authority for its far sighted leadership in establishing the Regional Center for Energy Efficient Lighting, which I believe has the potential to greatly strengthen the ability of the South Asia region to design and implement energy efficient technologies in electrical lighting.
Energy efficiency is the ability to moderate energy demand through management and technology at a reasonable cost to the economy and a positive environmental impact. And, energy efficiency has become a policy imperative throughout the region. The United States Government supports this policy and has been a willing partner in these efforts. Hopefully, cooperation in advancing energy efficiency will pave the way for meaningful cross border energy trade in South Asia – an issue that I would like to come back to later in my talk.
South Asia has more than one-fifth of the world’s population. The economies of South Asia are booming, resulting in strong emerging global partners who are increasingly concerned about regional energy security to sustain current growth rates. The regional average economic growth rate of 6 percent per year is constrained by 2 to 3 percent annually due to the lack of energy. Only 41 percent of the population in South Asia has access to modern energy – the lowest in the world. Dominant state companies and lack of commercial incentives tend to be inefficient. Prices for electricity and diesel, including fuels such as kerosene and liquefied petroleum gas, are distorted with subsidies. And cross-subsidies that encourage inefficient use of energy deter additional investment in energy supply, resulting in shortages and rationing. In addition, regional cooperation, such as cross-border energy trade or clean coal partnerships, is minimal or non-existent.
Unless South Asian energy constraints are remedied, the current economic boom threatens to become unbalanced, slowing growth and exacerbating already high rates of poverty and inequity. The resulting political backlash could slow progress toward cooperation and greater regional stability.
South Asia is in fact rich in many forms of energy, and the region is bordered by complementary liquid and gaseous energy resources in the Middle East and Central Asia. Energy shortages in South Asia are driven by the untapped potential of market power within and external to the region, rather than a lack of energy resources. Inefficiencies result in harmful emissions that contribute to serious health, environment and climate problems.
Sustainable economic growth is inextricably linked to access of affordable energy. Though South Asia has abundant energy resources, only 41 percent of the households in the region have access to commercial energy. Energy security in South Asia could be significantly enhanced if a regional power pool was created to facilitate electricity trade supported by a diverse generation portfolio of coal, hydro, natural gas and renewables.
Mutually beneficial, cross-border energy trade and investment can help the nations of South Asia meet their energy needs. India is one of the world’s largest consumers of energy, but it relies heavily on poor quality domestic coal to produce power. India must import increasing quantities of oil and gas. Bangladesh, Bhutan and Nepal could reap economic benefits from developing and exporting clean energy, such as natural gas and hydroelectric power, to India. Sri Lanka’s industrial growth is hampered by some of the world’s highest energy costs. Pakistan could benefit from both energy imports and exports. After years of conflict, Afghanistan’s energy infrastructure needs rebuilding, and it could play a critical role as a potential land bridge linking Central Asia’s abundant energy to energy-demanding South Asia.
To realize energy security and maintain current growth trends, USAID’s SARI Energy assists eight South Asian countries – Afghanistan, Bangladesh, Bhutan, India, the Maldives, Nepal, Pakistan, and Sri Lanka – in maximizing the full potential of national, regional and global energy markets. The objective of the program is to increase South Asian energy security through energy market mechanisms, cross-border trade, and clean energy development.
Increased access to energy is directly linked to increased incomes at the local level. When areas without electricity received electricity for five years, incomes increased by 64 percent and employment rose by 52 percent. This is an important linkage in South Asia, a region which ranks among the lowest in the world for per capita energy consumption, overall electrification rates, and per capita income. Less than 50 percent of the South Asian population has any access to electricity. As a result, the SARI Energy program focuses on increasing access to electricity through three core technical areas: cross-border trade, energy markets, and clean energy.
However, in addressing regional energy issues, we must also be realistic about regional sensitivities. South Asian trade with neighboring regions is based not only on technical and financial factors, but also in political realities, where tensions over the past 50 years have inhibited regional trade. As a result, South Asia is the least integrated region in the world. Intraregional trade is less than 2 percent of GDP, and regional energy trade is less than 0.5 percent of the total external trade. The cost of trading across borders in South Asia is one of the highest in the world.
National energy systems throughout the region are largely isolated from each other. There are no gas pipelines crossing the national borders, whether within SAARC or between SAARC and its neighbors. Electricity interconnections exist but are limited to India-Bhutan and India-Nepal. Each country has its own unique factors affecting regional energy trade.
I would like to briefly go back to the subject of today’s launch – the Regional Center for Energy Efficient Lighting. The potential for advancing energy efficiency through the introduction of lighting technologies represents a major opportunity in all South Asian countries, and I understand that it is an issue of considerable debate in the region. This is because lighting is a major source of electricity use. Several studies on South Asia estimate that energy consumption for all lighting is about 15 to 25 percent of the total electricity generated, making it one of the principle targets for the development of more efficient technologies.
On the flip side, lighting has the great potential to save energy and impact climate change. Not too long ago, the only easy way to reduce lighting energy was to reduce the wattage of the lamp used, which also reduced the amount of light. Today, retailers are featuring energy-saving compact fluorescent lamps through in-store promotions, and light-emitting diodes, or LEDs, are fast becoming the number-one choice for certain niche lighting applications.
What is driving the development of energy efficient lighting, beside lighting’s great potential to impact climate change? Consumer and government desire for better efficiency and sustainable practices is driving the lighting industry to develop advanced technologies, from dimmable fluorescent lighting systems to occupancy controls, to day lighting. Many of these new energy-saving technologies and practices are out on the market and are gaining momentum.
But understanding the options, advantages, and disadvantages of each can be daunting and confusing at best. It is hoped in the months and years to come, the Regional Center for Energy Efficient Lighting will take a look at many of the new lighting technologies available, and help governments, business owners, building managers, and consumers make informed decisions.
In summary, let me express my appreciation to each of you for attending this event. Through your participation, we will help to raise awareness about the importance of regional cooperation in energy trade, the promotion of energy efficiency strategies and programs, and the impact of world energy markets on this dynamic region.
Thank you.
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