Reforms and Nepal's Hydropower Potentiality

Sanjaya Dhakal, Writes from Kathmandu

With the commissioning of 144 MW Kali Gandaki A, the country currently enjoys around 650 million units of surplus power. But the nation could easily plunge back to the uncertain and load-shedding ridden days of late 1980s and early 1990s in a few years' time as there are no projects worth their name currently under construction, except one big project -- the 70 MW middle Marsyangdi -- even as the energy demand is rising at the rate of 10 percent.
People who remember the black-outs and load-shedding of yesteryears have a reason to worry. Thanks to inadequate planning and misplaced priority, in the next few years' time, the country could face similar situation.
Torn between advocates of mega projects and indigenously built medium ones, the power sector has been unable to find the correct combination to the satisfaction of the both.
The middle Marsyangdi currently is the only big project under construction and it carries a lot of hopes and expectations.
Apart from Marsyangdi, there are two other projects that are in the pipeline -- Kulekhani III (40 MW) and Chameliya (30 MW). However, they are not going to be completed any time soon because they are to be financed by donors and undertaken by the government.
The recent developments surrounding moves to build 300 MW Upper Karnali in a joint venture between India's National Hydropower Corporation (NHPC) and Nepal Electricity Authority (NEA) has provided another possibility. But this is at a very initial stage.
The planned and proposed projects of the NEA in the next one decade do not include any mega projects apart from middle Marsyangdi.
At present, the total installed capacity in Nepal is around 606 MW. The peak demand for this year is 470 MW and the energy demand is rising, on average, by 10 percent.
According to NEA's load forecast for Integrated Nepal Power System, in 2006, the peak demand will cross 630 MW. In case the middle Marsyangdi does not complete by then, the country will face power shortage. And even if the Marsyangdi comes along, the peak demand will rise to 750 MW in 2008, 864 in 2010 and so on. Quite clearly, the country needs to continue adding power to its system to keep up with the demand.
“Looking at the power projects planning at the moment, I see a dark future ahead. Currently, the projects like Budhi Gandaki (600 MW), Upper Karnali (300 MW) and West Seti (750 MW) are in the priority. None of them are targeted at domestic consumption. The NEA does not seem to have its separate project planning. Its priorities have been overshadowed by that of the government,” said Rajendra Dahal, editor of Himal fortnightly and prominent writer on water resources. “I see that Nepal will fall into the similar trap as was experienced in late 1980s and early 1990s.”
Hydro power projects cannot be constructed overnight. They require tedious and time-consuming studies and equally lengthy period of construction. “As such, the hydro power projects need to be planned and put in place in chains. By calculating energy demand, new projects have to be implemented one after another without a gap,” said Dahal.


Indigenous Power

The successful completion of Chilime (20 MW), Modi (14 MW) and Piluwakhola (6 MW) have shown the light for Nepal's future power scenario.
Experts say that the NEA currently has a sufficient pool of experts and technical manpower to construct projects up to 100 MW. “There is a lot of internal capital available if one looks for it seriously. The internally-built projects will be sustainable as well as cost-effective,” said Gobinda K.C., former director of NEA. The indigenous projects will reflect the real cost of electricity and help bring down the current level of electricity, which is said to be one of the highest in the region with US cents 9.9 per unit.
Besides, as most projects in Nepal are run-of-the-river type, the country faces acute shortage of power in winter season when rivers run dry. Storage projects, therefore, are vital to act as stop-gap.
Another expert Dr. Ananda Bahadur Thapa adds that in order to cope with the rising demand and to deal with the fluctuation in peak demands, all hydropower projects should give attention to pond system. “This will help them generate even in lean period. Currently, there is no congruency in demand and supply. The planning should focus on the load patterns at different times and season,” said Dr. Thapa. “The value of power at peaking time is greater and planners must look into this aspect.”
Experts and officials, interestingly, seemed to agree that at the moment, the dream of exporting power to India and earning money is nowhere close to materialization. “If we dream of having foreign investors come here to build power and then export it to India, then we should forget. India has, time and again, displayed its intention against such idea,” said an expert.
The recent understanding to develop Upper Karnali (300 MW) and Budhi Gandaki (600 MW) between officials of India and Nepal also suggest that India may be willing only to buy power on its own terms like it does from Bhutan. “In such a situation, it would be wiser for us to concentrate on increasing our own domestic consumption and leave the idea of exporting for future when environment might change for the better,” said the expert.
At present, the country has different major hydro projects with the strength of 389.15 MW and one 70 MW project is under construction. The Power Purchase Agreement has been signed with different Independent Power Producers. At present the strength of existing IPPs total 141.08 MW while IPP projects with the strength of 7.1 MW are under construction. The existing small hydro projects have the strength of 12.55 MW. There are six different diesel power stations with the combined strength of 56.75 MW.


Tough Road Ahead

According to NEA, 18 percent of the total population is connected to its grid. It serves nearly 900,000 consumers throughout the country's 75 districts. The National Planning Commission (NPC), however, says that around 40 percent of the populations have access to electricity. “The NEA only calculates based on meters it fixes on households. But in reality, one meter is found to be shared by a number of households. By taking this into account, we have said that 40 percent have access to electricity,” said Dr. Ram Hari Aryal, joint secretary at the NPC. Dr. Aryal, who looks after energy sector, said that the Tenth Plan aims to expand the access to electricity to include 55 percent of the total population. Likewise, it plans to cover 12 percent of population under the Alternative energy.
In order to achieve the lofty targets, the authorities, however, need to go ahead with reform initiatives as well as tirelessly engage in construction of new and feasible projects so as to be able to cater to the rising demands. Only through the barrel of power projects can the country achieve industrialization and economic prosperity.


Pak Technical Team Visits Iran

A four-member expert team from Pakistan will be visiting Iran in early May to see the site from where Tehran would export gas to Islamabad. They will hold discussions on other technical issues with regard to laying of proposed $2.5 billion Iran-Pakistan gas pipeline.
“The four member technical team, headed by Rashid Lone, Managing Director of Inter State Gas System (ISGS), would visit the South Pars gas filed, the site from where the Iran would export gas to Pakistan,” a senior Pak official was quoted by Daily Times as saying.
“The expert team would be briefed about the potential of the gas reserves in South Pars gas filed,” the official said and added the Pakistani team would also examine as to whether any other country have the claim for importing the gas from the said side or not.
He said in case of Turkmenistan-Afghanistan-Pakistan gas pipeline (TAP), Russia had the claim to import of gas from the Daultabad gas field in Turkmenistan from where the gas was to be exported to Pakistan through the TAP gas pipeline. “This was a source of worry to Afghanistan and Pakistan and therefore Pakistani experts will also examine whether any country has the claim of importing gas from the said site or not before formally inking the agreement on importing gas through the Iran-Pakistan gas pipeline.”
The official said the delegation would discuss routes from where the gas pipeline would enter Pakistan and added that Iran would bear the cost of laying the gas pipeline from the South Pars gas field to the Pakistani border area, from where the government of Pakistan would lay the gas line from border to its own gas system.
“After the refusal by India in becoming the part of the gas pipeline, Iran had sought the commitment from Pakistan for purchasing the gas through the proposed $3 billion Iran-Pakistan-India gas pipeline under its new proposal,” said the official. He said Iran under its new proposal wants the completion of the gas pipeline in two phases and under the Phase-1, the gas pipeline would be completed from Iran to Pakistan and then under Phase-2 it would be completed from Pakistan to India in case of willingness by India. “Iran had asked Pakistan to give commitment as to how much gas it would purchase from Iran after the completion of phase-1,” the official said.