Economic and population growth in South Asia have resulted in rapid increases in energy consumption in recent years, Well above rates seen in the OECD. The Energy Information Administration (EIA) estimates of South Asias primary energy consumption showed an increase of 52 percent between 1993 and 2003 (EIA energy statistics include only “commercial” energy sources and not animal waste, wood, or other biomass, which accounts for more than half of South Asias total final energy consumption). In 2003, South Asia accounted for approximately 4.0 percent of world commercial energy consumption, up from 3.1 percent in 1993. Despite this growth in energy demand, however, South Asia continues to average among the lowest levels of per capita energy consumption in the world, but among the highest levels of energy consumption per unit of GDP.
Discounting “non-commercial” sources of energy including animal waste, wood, and other biomass, South Asias commercial energy mix in 2003 was 44 percent Coal, 35 percent Petroleum, 13 percent Natural Gas, 6 percent hydroelectricity, 1 percent nuclear and 0.3 percent “other.” There are significant variations within the region. Bangladeshs energy mix, for example, is dominated by natural gas (67 percent in 2003), while India relies heavily on coal (52 percent in 2003). Sri Lanka and the Maldives are overwhelmingly dependent on petroleum (84 percent and 100 percent, respectively); Pakistan is diversified among petroleum (38 percent), natural gas (41 percent), and hydroelectricity (14 percent). The Himalayan countries of Bhutan and Nepal have the highest shares of hydroelectric power in their energy consumption mix at 82 percent and 37 percent, respectively, in 2003. South Asian nations are faced with rapidly rising energy demand coupled with increasingly insufficient energy supplies. Most of South Asia is already grappling with energy shortfalls, typically in the form of recurrent, costly, and widespread electricity outages. Because of the economic and political ramifications arising from such shortfalls, improving the supply of energy, particularly the supply of electricity, is an important priority of national and local governments. The countries of South Asia are looking to diversify their traditional energy supplies, promote additional foreign investment for energy infrastructure development, improve energy efficiency, reform and privatize energy sectors, and promote and expand regional energy trade and investment.