Introduction
The India-Middle East-Europe Economic Corridor (IMEC), launched by India at the G20 Summit in September 2023[1], marks a transformative initiative for trade, infrastructure, and energy cooperation across Asia, the Middle East, and Europe. An MOU on IMEC was signed by India, the US, Saudi Arabia, UAE, European Union, Italy, France and Germany. The IMEC comprises of an Eastern Corridor connecting India to the Gulf region and a Northern Corridor connecting the Gulf region to Europe. The IMEC envisions greater connectivity through rail, ports, and digital infrastructure. However, one of its most critical but underexplored opportunities lies in energy transition—specifically, the interconnection of electricity grids between India and the Middle East. By leveraging clean energy resources and enhancing cross-border electricity trade, India and the Middle East nations can foster a low-carbon economic future while securing energy supplies and boosting economic competitiveness.
The Strategic Case for Electricity Interconnection
- Abundant Renewable Energy Resources
India and the Middle East collectively hold some of the world’s richest renewable energy resources. India has an ambitious non-fossil fuels capacity target of 500 GW by 2030[2], primarily driven by solar and wind power. The Middle East, particularly Saudi Arabia and the UAE, has also embarked on large-scale investments in solar energy, exemplified by projects like the Mohammed bin Rashid Al Maktoum Solar Park in Dubai and the Neom Green Hydrogen Project in Saudi Arabia. Grid interconnection would enable efficient utilization of these resources by allowing power to flow where and when it is needed, reducing curtailment and optimizing capacity utilization.
The One Sun One World One Grid (OSOWOG) initiative, launched by Prime Minister Narendra Modi at Glasgow Climate COP26[3], aligns closely with this vision. OSOWOG seeks to create a globally interconnected solar power grid, allowing renewable electricity to be shared across continents. Integrating IMEC with OSOWOG could strengthen energy trade, promote sustainable energy distribution, and enhance resilience against climate change-induced disruptions. According to OSOWOG feasibility studies[4], India-Middle East electricity interconnection could drive significant cost savings by tapping into the region’s high solar energy potential, reducing dependency on fossil fuels, and creating a more balanced power supply across peak demand period.
- Economic Potential of OSOWOG in India-Middle East Electricity Trade
OSOWOG aims to unlock substantial economic benefits through electricity interconnections. The economic rationale for linking India and the Middle East lies in:
- Lower Cost of Renewable Energy: The Middle East has some of the world’s lowest solar energy production costs, often below $0.02 per kWh. By integrating with India’s grid, surplus solar power can be exported to meet India’s growing electricity demand, reducing the need for expensive coal-based generation.
- Energy Security and Market Stability: India currently imports over 85% of its crude oil needs. Electricity interconnection through OSOWOG and IMEC could help reduce reliance on fossil fuel imports while stabilizing energy prices by providing a diversified energy mix.
- Investment in Infrastructure: The feasibility phase of OSOWOG conducted by EDF, France and TERI, India, highlights that regional grid integration between India and the Middle East could drive investments exceeding $100 billion in transmission infrastructure, energy storage, and renewable energy capacity expansion.
- Climate Mitigation and Carbon Reduction: The power sector contributes nearly 40% of global CO2 emissions. By enabling large-scale renewable electricity trade, OSOWOG could reduce annual CO2 emissions by an estimated 1.5 billion metric tons across connected regions.
- Enhancing Energy Security and Resilience
Energy security is a shared priority for India and the Gulf nations. India remains heavily dependent on fossil fuel imports, while Middle Eastern countries seek economic diversification away from hydrocarbon exports. An interconnected electricity grid can serve as a stabilizing force, ensuring energy supply reliability while reducing reliance on expensive and volatile fossil fuel markets. This integration would also support grid flexibility, enabling demand-side management and efficient power balancing. Additionally, OSOWOG’s proposed policy frameworks focus on enabling financial models that encourage private sector participation and long-term sustainability of interregional power grids.
Learning from Global Grid Interconnection Examples
Global experience[5] suggests that regional electricity trade and integration have significant economic, security, and environmental benefits. Key examples include:
- European Internal Energy Market (ENTSO-E): The European interconnected grid system has reduced electricity costs by €5 billion annually while ensuring supply stability.
- Pan-Arab Electricity Market (PAEM): Estimated cost savings of $107–196 billion between 2018–2035 due to reduced reserve costs and fuel expenditures.
- Southern African Power Pool (SAPP): A coordinated integration plan saved $34 billion in investments and $3 billion in operational costs compared to uncoordinated national approaches.
- Xlinks Morocco-UK Power Project: A submarine HVDC transmission system is set to supply the UK with low-cost Moroccan solar energy, demonstrating the viability of long-distance renewable energy trade.
The successful integration of these projects highlights the feasibility of India-Middle East electricity interconnection under OSOWOG, leveraging a mix of regional cooperation, regulatory harmonization, and infrastructure investments.
Technical and Economic Feasibility of India-Middle East Grid Interconnection
- Existing Cross-Border Electricity Infrastructure
The concept of electricity interconnection is not new. The Gulf Cooperation Council Interconnection Authority (GCCIA)[6] has already established a power grid linking Saudi Arabia, the UAE, Bahrain, Qatar, Kuwait, and Oman. Similarly, India has strong interconnections with its neighbors, including Nepal, Bhutan, and Bangladesh. Extending these frameworks to facilitate India-Middle East electricity trade is a logical next step.
The OSOWOG framework could provide a global blueprint for structuring these interconnections, allowing Middle Eastern and Indian grids to synchronize and trade electricity more effectively.
- Transmission Technologies and Infrastructure
High-voltage direct current (HVDC) transmission systems, which allow efficient long-distance electricity transfer with minimal losses, could play a key role in linking India and the Gulf. Submarine HVDC cables, similar to the proposed Xlinks Morocco-UK Power Project, offer a viable solution for transmitting renewable energy across the Arabian Sea. Given recent advancements in energy storage and grid management technologies, such interconnections are becoming increasingly feasible both technically and economically. The recently launched Manufacturing Mission by the Government of India[7] focusing on cleantech manufacturing such as solar, high voltage direct current transmission lines and other components. Inter-regional electricity interconnector could offer demand boost to cleantech manufacturing industry in India.
- Economic Viability and Investment Landscape
Investments in electricity interconnections can be justified by multiple economic benefits, including reduced generation costs, enhanced reliability, and improved energy trade dynamics. Institutions like the World Bank, Asian Development Bank (ADB), and sovereign wealth funds from the Gulf could play a role in financing such projects. Additionally, multilateral agreements under IMEC could include provisions for energy cooperation, facilitating regulatory alignment and tariff structures.
Policy and Geopolitical Considerations
- Regional and Bilateral Agreements
India and the UAE have already signed agreements[8] to collaborate on renewable energy projects, including grid integration. A structured policy framework within IMEC could formalize these commitments, enabling clearer investment and regulatory pathways. The International Solar Alliance (ISA)[9], founded by India, could also facilitate cross-border electricity trade by harmonizing standards and promoting regional cooperation. The ISA is actively progressing towards its vision, leveraging intergovernmental support to overcome challenges. With support from the World Bank, a consortium led by France’s EDF and TRI is conducting technical studies for pilot interconnections. Progress has been made in India and globally, with collaborations extending to Sri Lanka, the UAE, Saudi Arabia, and Singapore. A regulatory framework for inter-regional connections is anticipated soon. ISA is actively engaging in intergovernmental discussions to pave the way for successful OSOWOG implementation.
OSOWOG and IMEC could serve as a diplomatic and technical framework for enabling these partnerships, ensuring that investments in energy interconnections align with broader global climate commitments.
- Addressing Geopolitical Risks
While IMEC presents a promising framework for energy connectivity, geopolitical complexities must be managed carefully. Stability in the Middle East is crucial for the success of any long-term infrastructure investments. Engaging neutral platforms such as the Multilateral Investment Guarantee Agency (MIGA)[10] of the World Bank Group could help de-risk investments and create trust-based mechanisms for grid management.
Conclusion
The IMEC offers a historic opportunity to redefine energy cooperation through cross-border electricity interconnection. By integrating power grids, India and the Gulf nations can unlock a new era of sustainable growth, energy security, and industrial decarbonization. Strategic investments in grid infrastructure, supported by enabling policies and regional cooperation, will be critical to realizing this vision. In a world racing toward net-zero emissions, leveraging IMEC for clean energy trade and aligning it with OSOWOG can position India and the Middle East as global leaders in the energy transition. Such mega projects will also boost demand for cleantech manufacturing in India under the Manufacturing Mission.
Author Brief Bio: Shri Jagjeet Singh Sareen is Partner and Global Lead, Climate Practice, Dalberg Advisors, and Member Secretary of the Bharat Climate Forum.
References:
[1] Press Release: Press Information Bureau
[2] 500GW Nonfossil Fuel Target | Government of India | Ministry of Power
[3] UK and India launch new grids initiative to deliver clean power to the world – GOV.UK
[4] 52e970d74272c9079053d966043b80.pdf
[5] G20 Energy Transition Working Group Report on Globally Interconnected Power Grids and Markets for a Secure and Resilient Energy Transition
[6][6] GCC Interconnection Authority
[7] Press Release:Press Information Bureau
[8] Press Release:Press Information Bureau
