Power for a Brighter Nepal
Nepal is not on the verge of collapse—militarily nor economically. All these rumors about a collapse, and articles that the King is preparing to go in exile, and that the Americans in Nepal being called to a town meeting and requested to prepare to evacuate on short notice, and that the Maoists have completed encircled Kathmandu, are all propaganda spread for one or the other reason, and these things will continue until the Nepalese media becomes more professional, accountable, and not driven by the smell of money and cynicism.
I would, for a change, like to divert the readers' attention, to a crisis that is genuinely hurting Nepal. Power. Electrical Power. As we all know, Nepal is witnessing severe power shortages since the last few months now, and in the absence of rain to fill our aquifers, it is only going to get worse in the coming days. It has come to our attention that the water in Kulekhani dam, the only storage type hydropower project in Nepal, is going to last less 20 days. This is a matter of grave concern. Nepal currently has an installed capacity of a little over 600 MW, but actual generation is far, far less than this. Currently, we are generating less than 150 MW, while peak demand is over 550 MW. That is a deficit of 400 MW!
So what put us in this situation? Yes, the lack of rainfall this winter has certainly exacerbated the problem. No rainfall, less water in our rivers, less generation. However, the fact is that even if we had normal rainfall, we would still be experiencing load shedding because the majority of our run-of the-river hydropower plants produce less than 30% of installed capacity during the winter months due to reduced stream flow, a natural phenomenon in our monsoon dependent hydrology. A solution to this would be building more storage type facilities which could store the excess water during the monsoon, and utilize this in the dry winter months. The Kulekhani is precisely built for this purpose, and in previous years, generation from this plant would mostly be done during the winter months when other plants experience reduced generation. However, this year the Kulekhani was operational in full gear from the end of the last monsoon season, because Nepal failed to develop enough additional hydropower projects to keep up with our ever increasing domestic demand.
So that brings us to the question of why we have not been able to build additional plants. The rhetoric has always been that Nepal's domestic demand is low, Nepal does not have the financial resources to expand hydropower plants, and that India, the only market for power export, is not willing to buy power from Nepal at a reasonable price. THIS IS ALL BULLSHIT!
Here are a few facts to challenge such a claim:
1. Nepal's domestic demand is certainly far greater than the current supply, which makes economic sense to investment in this sector.
2. India's current power deficit is over 8,000 MW (yes, eight thousand megawatts)!! This has been cited as the major impediment to faster economic growth in India, which has forced them to recently sign a deal with the US to allow civilian nuclear development. You must be nuts to believe that India will not buy power from us!
3. India is Financing Bhutan’s major hydropower projects (Chukha 336 MW and Tala 1020 MW) on a 60% grant 40% loan at an interest rate of 5-9%. About 70% of the power is exported to India at a rate of approximately INR 2 per unit. Last year the Government of Bhutan earned $52 million. Once the Tala hydel is completed (mid 2006), Bhutan’s annual revenue from hydropower export will reach $214 million, and this is expected to increase Bhutan’s per capita income from the current $700 to $1200! FROM ONE MAJOR HYDROPOWER PROJECT!
4. Nepal boasts of 83,000 MW of hydropower potential, of which 43,000 MW is techno-economically feasible. Yet we have tapped less than 1% of that potential, while Bhutan will generate twice as much as us by the end of this year.
5. The West Seti hydel project (750 MW) which was to create 352,000 jobs and earn Nepal $308 million annually has still not started. No other large projects are in sight. With the killing of the Arun III dream, all investors seem to have backed out, especially with the ongoing insurgency. The environmental outcry on this project were all fabricated lies. So what if a small patch of forest would have been destroyed in constructing the access road. With the power and income from such a large project, we would have saved 100 other such forests by now. We probably could have attracted a lot of the manufacturing jobs that went to Bangladesh and other South Asian countries if we only had that additional power. We could be earning over $100 million from exporting the power to India. But all that is gone because a few “environmentalists” blew up the reality for a couple of thousand dollars worth of consultancy money, and the 24 million people of Nepal lost.
6. However, to top all this is one fact and that is the LICENSING of HYDROPOWER PROJECTS IN NEPAL! As we stand, the Department of Electricity Development, within the Ministry of Water issues the license to survey, develop, and operate hydel projects in Nepal. The problem is that it has sold licenses to almost every viable site throughout the Kingdom of Nepal and guess what? The survey license holder has 5 years to survey the site, and he/she can easily extend the duration for another 5 years. There are no performance guarantees required. This means that the license, once issued, is valid for 10 years without having to do anything, and this is precisely what is happening. Someone out there has a license to every potential hydropower project identified by the government, and they are demanding 15-30% share from any prospective investor to “use” their license or asking for huge sums of money to sell them!!
This is the main reason we have not seen investments in hydropower in Nepal.
THIS IS A REQUEST TO ALL NEPALESE AND SUPPORTERS TO PLEASE BRING THIS TO LIGHT AND PRESSURE THE GOVERNMENT TO REVOKE ALL LICENSES THAT HAVE BEEN ISSUED WHERE THE CONCERNED PARTIES HAVE NOT MADE ANY PROGRESS SINCE THEY GOT THE LICENSE.
If we start now, and the government revokes these licenses and reissues them to those parties that are genuine, and the Maoists do not disrupt construction and operation, my estimate is that we will start catching up to meet domestic demand in 3-4 years. This is the fastest things can turn around. However, it is difficult for a government to just revoke a license that it issued in the first place, so they will probably give these bastards a few years to demonstrate progress, and revoke the license if they fail to perform. This will extent the timeframe for another 2-3 years. So I seriously don’t see any change for at least 5 years. Now, isn’t this a concern of National Importance?
As the Nepal Advocacy Group, I think we should take up this challenge and advocate for a Brighter Nepal!!