Nepal | September 29, 2020

Reliable energy a must to boost Nepal’s economic growth

Pushpa Raj Acharya
Share Now:
energy

reference.com

Kathmandu, January 4

Unreliable supply of energy has long been considered as the major constraint for economic growth of the country. Despite having huge potential of hydroelectricity, Nepal has exploited negligible quantum in its 110-year history of hydropower generation. Hydroelectricity is contributing just 3.7 per cent of the total energy demand of the country.

Against this backdrop, involvement of private sector in hydroelectricity generation has been giving momentum to development of hydropower projects in recent years.

By 2017, IPPs contributed altogether 520 megawatts to the national grid against 530-megawatt generation capacity of Nepal Electricity Authority (NEA) projects. Policy instability and procedural hassles in land acquisition, right-of-the-way clearance, among others, are major challenges to develop hydropower in Nepal.

Khadga Bahadur Bisht, former president of Independent Power Producers’ Association Nepal (IPPAN), said that the latest technology in construction, including tunnelling, could accelerate developing hydropower projects, but procedural hassles and local obstructions during land acquisition and right-of-the-way clearance tend to extend execution period. “If the government eases the procedures and the locals are cooperative, many projects could be completed in three to four years,” said Bisht.

Following the energy crisis, the government led by former energy minister Janardan Sharma took some significant steps for enabling the investment climate in the country’s hydropower sector. Predecessor of Sharma had also taken some bold decisions like ending the practice of holding licence without doing anything in hydropower sector and given a deadline to take forward the project or surrender the licence.

The country has finally overcome the challenge of crippling power cuts since last one year as the power utility has effectively managed the demand and supply through additional import of electricity from India – around 372 megawatts during dry season. Energy import – hydroelectricity and petroleum products – are the major imports of Nepal from India. If Nepal can exploit its hydroelectric potential, the country can significantly minimise the widening trade gap with the southern neighbouring giant.

Major policy reforms

Following the Ministry of Energy’s instruction, the NEA board has reinstated the provision of ‘take-or-pay’ in power purchase agreement (PPA), with major focus on peaking-run-of-the-river (PRoR) and storage projects. This policy is important from the perspective of energy security because most of the private sector developers were focused on run-of-the-river (RoR) projects.

Generation from the RoR projects plunges to one-third of the rated capacity when the water level in snow-fed rivers drops during winter season. Hence, Ministry of Energy had introduced a separate tariff for the PRoR and storage projects for six months of the dry season.

As per the recent tariff policy, RoR projects, which can meet the energy requirement of 30 per cent for six months (from June to November), will also get dry season rate of Rs 8.40 per unit for whole six months.

Likewise, the reservoir projects that meet 35 per cent of (rated capacity) energy during dry season can obtain Rs 12.40 per and the tariff for wet season is Rs 7.10 per unit.

PRoR projects can sell energy at up to Rs 10.55 as per their peaking capacity (from at least four to six hours a day) in dry season and Rs 8.40 per unit in non-peaking hours of the dry season. And for wet season (July to October), similar tariff like that for RoR projects of Rs 4.80 per unit is applied for PRoR projects.

New connections

From winter season of next year, largest capacity peaking project, Upper Tamakoshi will be connected to the national grid as the tunnel breakthrough of the project was carried out in the last month and 92 per cent of the works have already been completed. The country will have sufficient energy to cater to the demand after completion of the 456-megawatt Upper Tamakoshi.

Similarly, tunnel breakthrough of one of the longest running NEA projects, Upper Trishuli 3A, was carried out in September and the 60-megawatt UT3A project is also expected to be completed by this year.

Improving the system

The power utility should give due consideration to early completion of generation and transmission projects, work for augmentation of transmission lines and distribution system eyeing the possibilities of industrialisation in the country.

Cheaper electricity can significantly bring down the production cost and the country can attract electricity intensive industries, which will generate employment opportunities in the country.

According to Kulman Ghising, managing director of NEA, there is a huge demand for electricity from the industrial sector and the NEA will have surplus energy by the end of this year.

However, the power utility may not be able to supply electricity as demanded by the industries because the old distribution system (substation, feeders, cables) cannot handle the additional load. Hence, NEA has prioritised transmission and distribution system upgradation and augmentation. However, procedural hassles related to procurement, hiring workers and others have been creating obstructions.


A version of this article appears in print on January 05, 2018 of The Himalayan Times.


Follow The Himalayan Times on Twitter and Facebook

Recommended Stories:

More from The Himalayan Times:

Nepal COVID-19 Update: 1351 new cases, 742 recoveries, four fatalities recorded on Monday

KATHMANDU: Nepal’s Health Ministry, in its regular press briefing, shared the latest updates on coronavirus contagion from across the country, and government’s response to the health crisis. READ ALSO: Kathmandu Valley records 817 infections on Monday As of today, 998,407 tests throug Read More...

K-pop’s BLACKPINK drop teaser for title track ‘Lovesick Girls’ from debut album

KATHMANDU: K-pop’s most popular girl band BLACKPINK on September 28 announced Lovesick Girls, the title track of their debut full-length LP The Album. According to The Korea Times, the group's label YG Entertainment dropped a teaser poster on social media, announcing the title track, Lovesi Read More...

President issues three ordinances

KATHMANDU: President Bidya Devi Bhandari has issued three ordinances, including one related to prevention and control of acid and other harmful chemicals. The President issued these ordinances in accordance with Article 114 (1) of the Constitution of Nepal and on the recommendation of the Council Read More...

Nepal, Oman to sign labour agreement soon

KATHMANDU: Nepal's Ambassador to Oman, Sharmila Parajuli Dhakal paid a courtesy call on Labour Minister of Oman Dr Mahad bin Saeed bin Ali Baouin at latter’s office. Ambassador Dhakal congratulated Dr Mahad for his appointment to the post of Labour Minister of Oman. On the occasion, both o Read More...

Global K-pop sensation BTS to drop new album ‘BE’ on November 20

KATHMANDU: K-pop supergroup BTS have announced their new album titled BE, which they will be releasing on November 20. The group’s label Big Hit Entertainment took to the group's online fan community BTS Weverse on September 28 to make the announcement, reports The Korea Herald. Without el Read More...

Armenia and Azerbaijan step up fighting in fiercest clashes since 1990s

Each side says the other firing heavy artillery Worries resurface about South Caucasus stability Azerbaijan says six of its civilians killed Nagorno-Karabakh said 15 more of its soldiers killed YEREVAN/BAKU: Fighting between Armenia and Azerbaijan escalated sharply on Monday in a Read More...

Diogo Jota

Liverpool maintain 100% start with win over Arsenal

LIVERPOOL: Premier League champions Liverpool maintained their 100% start to the season with a 3-1 win against Arsenal at Anfield on Monday leaving them level on nine points with pacesetters Everton and Leicester City. The visitors took the lead through an Alexandre Lacazette strike but L Read More...

Fulham, Aston Villa, Ivan Cavaleiro, Matty Cash

Villa beat Fulham 3-0 to move into top four

LONDON: Aston Villa moved into the Premier League top four after they strolled to a 3-0 win at Fulham thanks to goals from Jack Grealish, Conor Hourihane and Tyrone Mings in a lopsided contest on Monday. The result left Villa, who narrowly avoided relegation last season, fourth on a maximu Read More...