Power Trading in South Asia - Remarkd by U.S. Chamber of Commerce President and CEO Thomas J. Donohue - New Delhi, India

Thank you very much, ladies and gentlemen, and good morning. My name is Tom Donohue, and I am the President and Chief Executive Officer of the Chamber of Commerce of the United States.

I would like to start by welcoming you all to this very important seminar on Power Trading in South Asia, with a focus on India.

This forum is designed to provide a direct exchange of ideas among private investors, independent private power developers, and our distinguished friends from the Indian government on how to build integrated, affordable and reliable power supplies for the region.

This morning, you will hear from the top experts, executives and leaders in this field. Let me confess at the outset that I am not one of them. But I do know what it takes to make economies grow and societies succeed – it takes energy. I know what it takes to attract significant business investment in this or any region – it takes electricity. If companies cannot be assured of a stable and affordable power supply, they will not come. It's that simple.

I also understand that having energy resources is a good thing but it is only a small part of the challenge. You must also have the systems, facilities and technologies to develop the resources, turn them into power, and move that power across both real and artificial barriers to the marketplace.

But even that's not enough. Government policies – at all levels — must be rational, fair and honest. They must be designed to spur investment, innovation and competition.

Finally, for those who aspire to transition their economies from agriculture and manufacturing to the high technology, let there be no misunderstanding – this in no way diminishes the importance of energy. As we learned in the United States, being a full participant in the information age burns a lot of power.

Speaking of the United States, let me assure you that I do not come here with the notion that we have all the answers. In fact, the United States has made some terrible mistakes when it comes to energy.

For political reasons, we have locked away some of our most precious domestic resources, even though we know how to develop them in an environmentally safe manner.

This is especially with natural gas. Our government spent years pressuring companies to transition to natural gas, and then it made development of new supplies virtually impossible. Chemical plants and others are literally moving out of our country to be closer to more affordable and reliable sources of natural gas.

Our own power grid is woefully out of date. Burdensome regulations make it extremely difficult to bring new power plants on line, and we haven't built a new oil refinery for more than 30 years.

The United States gets 20 percent of its electricity from nuclear power, yet it took decades to finally convince Congress to authorize construction of a major waste disposal site at Yucca Mountain, Nevada.

And as we saw with the brown-outs in California four years ago and the blackout in the Northeast and Midwest last year, even a highly developed country is not immune from serious crises in power trading and transmission.

Yet despite all these challenges, comprehensive energy legislation has been bottled up in our Congress for more than three years.

But there is much that we do well – and at the top of the list are our energy companies and suppliers – the firms that invent the technologies and create the systems to help communities and regions around the world develop the power they need to achieve their economic potential. Very simply, nobody does it better.

Our power industry also has tremendous experience in operating under different regulatory structures, dealing with the conflicting demands of government, forging cooperative arrangements, and developing vibrant power trading markets.

And that's why the Chamber of Commerce of the United States is proud to be a principal private sector leader in the South Asia Regional Energy Coalition, or SAREC.

The Coalition serves as a mechanism through which public and private sector stakeholders can influence regional energy policy and reform. Its ultimate goal is to achieve an integrated South Asia regional energy market that will increase opportunity, growth, and prosperity.

Despite South Asia's rapid economic and social development during the 1990s, the supply of reliable and affordable power remains a key challenge to improving the quality of life for the region's 1.4 billion citizens.

The poorest 40 percent of the region's population has scant access to reliable and affordable on-grid power. Instead, they depend upon off-grid energy sources that damage the environment, continue the cycle of poverty, and stifle long-term development.

South Asian countries must accommodate rising demand, increase their reliance on clean energy technologies, and promote increased cross-border trade in electricity and natural gas.

Just as North America must do, South Asia needs to diversify its traditional energy base by expanding domestic energy resources; promoting additional foreign investment in energy infrastructure; improving energy efficiency; and, encouraging private investment and competition.

Expanding regional energy trade and investment is essential. Both us live in regions where some areas are energy-rich and some are energy-poor. But if we can learn from each other how to overcome the barriers and foster cooperation, everyone can benefit.

In this region, India of course represents the single largest power market opportunity, and is the key player for facilitating expanded power trading in South Asia.

Under India's recently passed energy deregulation law, the Indian Power Trading Corporation has emerged as a major player responsible for arranging bulk power purchases and imports from generators with excess capacity, as well as sales to State Electricity Boards that are experiencing extreme shortfalls in electricity supplies.

India has also made progress in interconnecting each of its major electricity regions. This makes it possible to arrange bulk power purchases from one region to another.

While India still has much work to do – just 60% of its homes have electricity – it best represents the possibilities of enhanced power trading in South Asia today—and also an emerging market opportunity for countries like Nepal, Bhutan, and Bangladesh.

We must build on this progress. SAREC and the U.S. Chamber of Commerce believe that the best way is to reinvigorate the private-public partnership that began four years ago with the birth of SARI-Energy.

The private sector brings to the table the innovative ideas that are essential for formulating new policies and regional agreements that will increase cross-border clean energy trade.

Let me assure you that the Chamber—in partnership with USAID—will continue the fight to remove barriers to regional energy cooperation and trade; advance the cause of energy sector reforms; overcome technical differences across borders; and harmonize South Asia's electricity and natural gas transmission regulations.

Let me conclude by saying that I meet personally with hundreds of leading American CEOs every year. And I can tell you there is a growing interest in the markets and economies of South Asia – and it's about time. I am in India to discuss energy and many other issues because this is a moment of great opportunity for the people, businesses and governments of both countries.

India has made great progress in opening its economy and emerging as a serious player on the world stage, which is its right and destiny. There is a lot more to do here and in the United States to truly realize the vision of a prosperous and vibrant partnership between our nations.

Power is and must continue to be a vital component of this partnership. Working together – the private sectors and governments at all levels – we can improve the lives of untold millions and light the way for the people of South Asia to become a full participants in what we hope and pray will be a century of progress for all.

Thank you very much.