The region’s resources are highly complementary. Nepal and Bhutan have abundant hydropower potential, including pumped storage, which could support India’s peak demand. In turn, these countries can rely on Indian supply during periods of low hydrology. Yet cross-border electricity trade remains largely confined to government-to-government arrangements. To unlock resilience and efficiency, South Asia needs transparent market mechanisms, real-time price discovery and greater private-sector participation. Stronger interconnections and open power markets would lower costs, improve reliability and accelerate decarbonisation. South Asia’s greatest untapped opportunity lies in regional cooperation.
Clean Energy Supply is Scaling Faster than Systems can Adapt
Another energy challenge for South Asia, is not whether supply can keep pace with demand, but how that supply is delivered sustainably, affordably and securely. Between January and November 2025, India added approximately 44.5 gigawatts of renewable energy capacity, one of the highest annual additions globally. However, renewable energy integration is now the binding constraint. Large volumes of variable and intermittent power are entering systems that were not designed for such scale. Grid expansion takes years, while renewable projects can come online in 12 to 18 months. Without accelerated investment in storage, flexible generation and smarter grids, system stability risks will increase.