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Regional Electricity Market  /  Motivation

Background and rationale

  1. ECO, as a regional intergovernmental organization comprising 10 Member States has become an important regional entity covering the region endowed with rich natural resources, in particular, energy reserves. Notwithstanding their huge potential, some ECO countries have relatively low energy demand and others, in contrast, enjoy high and ever-growing energy demand, even though their indigenous supply options are comparatively limited. Currently, in some ECO Member States, energy demand growth is far outstripping domestic supply, and in the foreseeable future, the demand-supply gap will become even wider unless the domestic supplies are supplemented by imports.
  2. It is widely recognized that the location of the ECO Region at the crossroads between the emerging Eurasian and European electricity markets creates lucrative opportunities for cross-border trade and provides incentives for enhanced transmission network on regional, and interregional levels. The ECO Member States are striving for trade opportunities and selectively enhancing physical infrastructure, which eventually facilitates electricity exports and imports.
  3. The pace and dynamics of cross-border trading patterns in ECO Region demonstrate that in the past few years the ECO Member States have been active in identifying and benefiting from the trading and investment opportunities in the power field on bilateral levels. Below are the 2015 figures that depict existing interconnections of power systems among the Member States:These fragmented developments, when considered in conjunction with electricity imports, provide ample opportunities in terms of complementing and substituting one another.
  • Afghanistan imports electricity from Iran (by 132&20kV), Tajikistan (by. 220, 110.560kV), Turkmenistan (by 220, 110&10kV) and Uzbekistan (by 220&10kV) lines.
  • Azerbaijan is interconnected with Iran (by 330, 2304132kV) lines for exchange & transit, with Turkey (by 154&34,5kV) lines for exchange of electricity.
  • Iran is interconnected, with Afghanistan (by 132&20kV) and Pakistan. (by 132&20kV) lines for export with Turkey (by 100&154kV) lines for export; with Turkmenistan (by 230kV) line for import of electricity.
  • Kazakhstan is interconnected with Kyrgyzstan (by 500&220kV) and Uzbekistan (by 500&220kV) lines for exchange & transit of electricity;
  • Kyrgyzstan is interconnected with Kazakhstan (by 5004220kV), Uzbekistan (by 500kV) and Tajikistan (by 110&35kV) lines for exchange & transit of electricity.
  • Pakistan imports electricity from Iran (by 132420 kV) lines. • Pakistan exports, electricity to Afghanistan (by 220, 1:10&10kV) lines and also interconnected with Kyrgyzstan (by 1106c35kV) lines for exchange & transit of electricity.
  • Turkey is interconnected with Azerbaijan (by 154&34,5kV) lines for exchange and with Iran (by 400&154kV) lines for import of electricity.
  • Turkmenistan exports. electricity to Afghanistan (by 220, 110410kV) and is interconnected with Iran (by 230kV) line for export and with Uzbekistan (by 500&220kV) lines for exchange & transit.
  • Uzbekistan exports electricity to Afghanistan (by 220&10kV) lines and interconnected with Kaya_khstan (by 500&220kV), Kyrgyzstan (by 500kV) and Turkmenistan (by 500&220kV) lines for exchange & transit of electricity.
  1. CASA-1000 is a practical example of a transformative project helping create a regional energy grid that connects Central and South Asia power systems. Afghanistan, Kyrgyzstan, Pakistan, and Tajikistan have been pursuing the development of electricity trading arrangements that would help to export surplus summer electrical power from the Kyrgyzstan and Tajikistan to Pakistan and Afghanistan. The project will give a much-needed boost to energy security and improve overall connectivity across two regions. The groundbreaking ceremony on implementation of this project was held in May 2016.
  2. ECO cooperation will eventually, enhance the economic efficiency of the use of cross-border transmission capacity on seasonal and daily bases and reap financial gains from electricity trade. It will enable the complementarity of domestic generating capacities, which might contribute to balancing seasonal inconsistencies. Meanwhile, redistribution of excessive power generation across the ECO Member States might be complemented with more cost-effective investment arrangements for new capacities in these countries. The attractiveness of ECO regional platform would grow if it can potentially connect two major power markets of the EU (and its Energy Community) and the emerging Eurasian region.
  3. Enhancement of regional electricity trade development can be done via strengthening intra-regional trade in Central Asia, where an interconnected grid already exists but much needs to be done to ensure adequate supplies of energy and security of supply. By strengthening existing links with Iran, and through Iran to Azerbaijan and Turkey, the benefits of larger integrated systems can be accessed. Another important element in interconnecting the power systems of the ECO countries is the potential of regional power exchange, instead of only as a power export opportunity for the Member States.
  4. The electricity demand and supply situation in the region may be divided generally into different groups with each country having potential as a predominantly export, import or transit state.

Afghanistan is an importing and transit country and has existing interconnections with Iran, Turkmenistan, Uzbekistan, and Tajikistan

Pakistan is an importing country with rapidly growing demand

Kazakhstan and Uzbekistan are exporting countries with fossil-fuel based generation

Tajikistan and the Kyrgyz Republic are exporting countries with hydropower based generation

Turkmenistan is an exporting (mainly oriented to Iran) and transit country

Turkey is an importing and exporting country

Iran is an importer of electricity

Azerbaijan is an exporting country with fossil-fuel based generation