Nepal is estimated to have a hydro potential of 83,000 MW electricity, and 43,000 MW is considered to be economically viable.

However, the hydropower generating capacity of 1,047 MW at present seems to be a distant dream from the government’s target of generating 15,000 MW by the year 2029 during the announcement of the ‘Energy and Water Resources Decade’ through the government’s White Paper on May 8, 2018.

Hence, the authorities concerned need to do more in order to meet the goal and fulfil the growing energy demand in the country and also boost national economy.

ONGOING PROJECTS

Many hydropower projects are currently under construction while several projects have already been completed which can be taken as a positive step for meeting the government’s goal.

“We have already commissioned the Chameliya Hydropower Project, Bagmati Small Hydropower Project, Kulekhani- III and Upper Trisuli 3A with 30 MW, 22 MW, 14 MW and 60 MW capacities, respectively whereas the construction of Kabeli-B1, Lower Hewa Khola, and Iwa Khola hydro projects with 25 MW, 21.6 MW and 9.9 MW capacities, respectively are ongoing,” says Prabal Adhikari, Spokesperson at Nepal Electricity Authority (NEA).

According to Adhikari, the Upper Tamakoshi Hydropower Project and Rasuwagadhi Hydropower Project with 456 MW and 111 MW capacities, respectively will be completed by the next fiscal whereas, Khani Khola -1, Mistri Khola and Upper Sanjen Hydropower projects with 40 MW, 42 MW and 14.8 MW capacities will be completed within this fiscal.

“We have targeted to complete 23 hydropower projects such as the Upper Sanjen, Upper Khimti, Junbeshi, and Singati Khola with 14.8 MW, 12 MW, 5.2 MW and 16 MW, et cetera in the coming fiscal 2019-20 with 983 MW combined capacity,” adds Adhikari.

Similarly, as per the data of Ministry of Energy, Water Resources and Irrigation (MoEWRI), several projects such Likhu-4, Dordi-1, Nyadi Khola, Middle Modi and Madhya Bhotekoshi hydropower projects with 52.4 MW, 10.3 MW, 30 MW, 15.1 MW and 102 MW generation capacity, respectively are already underway, which will be completed within the fiscal 2020-21, claims Pravin Raj Aryal, Spokesperson at MoEWRI.

“Apart from this, we have introduced potential projects such as Lohore Khola, Salankhu Khola, Upper Hewa HPP, Sisa Khola A, among 30 projects spread across the country that we aim to complete by the fiscal 2020-21,” he adds.

PRESENT SCENARIO

As per NEA’s data, to fulfil the rising energy demand, Nepal imports around 400 MW electricity annually from India, whereas Nepal at present has been producing 1,047 MW electricity annually.

To this, NEA contributes 570 MW whereas 477 MW is contributed by Independent Power Producers (IPPs).

“We only generate around 400 MW electricity in the dry season but the demand yearround is more than 1,600 MW. So, in order to supply electricity throughout the year, the energy banking system should be implemented by the government through which we can sell excess power during monsoon to India and buy it from them during the dry season,” says Shailendra Guragain, President at Independent Power Producers’ Association (IPPAN), Nepal. Gyandendra Lal Pradhan, Treasurer at the Federation of Nepalese Chambers of Commerce and Industry (FNCCI), says, “The trade deficit with India is rising and it can be reduced significantly by replacing fuel imports by increasing the use of electrical appliances such as electric vehicles and induction stoves in the country. The Upper Tamakoshi Hydropower Project alone will be of a great help to the nation by producing surplus electricity for exports which can bring foreign currency into the country and helps national GDP.” However, according to Pradhan, the NEA together with private sectors should join hands to maximise energy production in the coming years.

OVERCOMING HURDLES

According to Guragain, increased bureaucratic hurdles such as lengthy paper work for project approval have made it difficult for foreign investors to start projects through Foreign Direct Investments (FDI) in Nepal.

However, according to Aryal, in order to ensure unhindered bureaucratic process for foreign investors, the government has recently launched the one-window service in the Department of Industry which has eight different units of the department concerned for performing overall tasks for investors from a single place.

“We have already signed Power Purchase Agreement (PPA) with several hydropower investors for 2,500 MW worth projects with financial closure, whereas PPA of 2,600 MW worth projects have been done and we are waiting for their financial closure.

Similarly, another 2,600 MW worth projects are in the process of PPA. This will surely boost foreign investors’ confidence in investing in Nepal’s hydro power sector to a great extent,” adds Aryal. Likewise, the issues of power leakage and land acquisition during the construction of the substations have been a headache for NEA for a long time. “Protests by locals in issues such as disrupting the construction of transmission lines by demanding higher prices for their lands have been hampering the construction of substations and transmission lines in the country.

However, we have been trying to settle down these issues with the locals by devising a middle path for land acquisition.

We are also working to upgrade our transmission and distribution systems across the country to control the electricity leakage as well, which can save us a lot of energy,” adds Adhikari.

ENCOURAGEMENT NEEDED

The private sector has a big role in contributing a large chunk of power production in the country. “We have already signed PPA with NEA for constructing hydropower projects worth 3,500 MW.

Similarly, other projects worth 2,000 MW are already under construction whereas another 1,500 MW projects are under financial closure process,” adds Guragain.

According to him, many IPPs have, of late, applied for licence and PPAs for projects, which is very encouraging for meeting the energy decade’s objectives.

However, only increasing the generation capacity of power is not enough as transmission lines and substations are needed for the smooth supply of electricity to each household in the country.

“Previously only the NEA looked after everything, but now a new transmission line management department has already been formed by the government, which will help manage all the problems related to grid connectivity and transmission lines in the country,” shares Adhikari.

According to Aryal, the government is also planning to construct new substations and transmission lines in the country, which will facilitate electricity transmission.

“In rural areas, we are planning to instal many solar mini grids so that each household gets electricity equally in the country,” he adds.

THE FUTURE AHEAD

According to Aryal, although the country might be able to produce even close to the predicted amount of electricity in the envisioned period, it will still need to export the electricity abroad due to lack of factories and industries in the country that consume maximum electricity.

Moreover, he claims that the country is bound to see a rise in construction activities in the coming years due to the improving business climate which will give rise to industries.

“The MoU signed between Nepal and Bangladesh in 2018 has facilitated the export of the surplus electricity, which Nepal will be producing in the coming years. We are very optimistic of the timely completion of all the ongoing hydropower projects, which will not only help us achieve our energy goals, but also boost our economy,” adds Aryal.

Similarly, Uttam Wagle, Spokesperson at the Investment Board Nepal (IBN), says, “The construction of the 900 MW Arun III hydro project has already begun while the construction of the Upper Karnali with same capacity will start soon.”

“The government is planning to allocate more than Rs 88 billion for the upcoming fiscal 2019-20 to MoEWRI for hydro power development in the country and we have demanded Rs 103 billion for the same. We aim to produce 5,000 MW electricity in the coming five years and increase it to 15,000 in one decade,” adds Aryal.