Economic benefits and security implications of trading hydropower through transboundary power grids in Asia

Countries with large potential for hydropower generation can seize large benefits by connecting their hydropower stations to transboundary power grids and trading electricity with other nations. Such benefits include income from selling hydropower; construction of hydropower stations not otherwise financially viable; certified emission reduction (CER) credits from a clean development mechanism as defined in the Kyoto Protocol; and allocation of more resources for environment conservation and resettler livelihood rehabilitation. Buyer countries can also reap gains from such a partnership, namely the importing of cheap electricity, diversification of energy sources to improve disaster preparedness, reduction of greenhouse gas emissions, and CER credits in the developing world. Possible shortcomings in terms of regional and domestic uncertainty should be addressed in designing and implementing transboundary power grids so that these impacts are prevented or mitigated.