MAKING NEPAL POWERFUL

It is that time of year again — another Power Summit is taking place. The agenda and content of this conclave 21-22 November was no different from all past summits: the need for large reservoir projects to meet winter demand and river regulation, pricing of peak power for export, and balancing supply-demand. And as always, the elephant in the room is India’s strategic interest in Nepal’s water resources.

Going back to the Nepali Times archives for coverage of past summits, we noticed a pattern. None of the big reservoir projects like West Seti or Tama Kosi 3, designed primarily to export power to India, ever got off the ground. In fact, the state actively sabotaged them. It is no secret in trade circles that regulated flow of water from the Himalayan tributaries of the Ganges, and the involvement of Chinese contractors, raised hackles down South. 

Similarly, attempts to invest in large solar farms in the trans-Himalayan region of Upper Mustang were abruptly cancelled by the PMO this year, apparently due to opposition from up North. 

So, there isn’t just one, but two elephants in the room. The inability of successive Nepal governments to steer an independent energy policy and gain backing of its large neighbours stymied large projects. Investors were also deterred by government indecision, red tape and blatant extortion. 

The Power Summit this week, organised by the Independent Power Producers’ Association of Nepal (IPPAN) with the motto ‘Powering the Asian Century’, is thrashing out these same issues. At a time when Nepal needs a new paradigm and strong political will for energy security, the same politicians who failed to deliver since 1990 are in power. It would be naïve to expect much from them.

The miracle is that despite governments actively discouraging investors, Nepal has now emerged from a decade of power cuts, new energy projects are coming into operation every other month, and the popular head of the Nepal electricity Authority (NEA), Kulman Ghising, is saying that the problem now is not lack of electricity but people not using what is generated.

Read Also:

 The Water Emergency, Ajaya Dixit

Decentralising (hydro)power,Gyanendra Lal Pradhan

 An energy windfall for Nepal?, Kushal Gurung

Indeed during this monsoon, Nepal actually exported power to India for the first time. Yet Nepal's widening trade deficit with India will not be redressed by exporting power, however much politicians like to boast that we can. The country’s national strategy should be to generate enough power to slash tariffs so that Nepalis can afford electricity for cooking and setting up small and medium-scale enterprises.

As energy entrepreneur Gyanendra Lal Pradhan argues in his commentary ‘Decentralising (hydro)power’ in this edition, the PMO must fast-track its plan for 6 hydropower projects in 6 provinces in 6 years. This would generate enough electricity for Nepal to phase out power imports from India, which this fiscal year amounted to Rs20 billion. LPG imports could be cut by Rs60-70 billion if enough Nepalis switched to cooking with electricity, and electric railways would cut diesel imports by Rs100 billion. In total, Nepal would save Rs200 billion — a third of its total import bill from India. 

As Kushal Gurung of the Energy Development Council writes in this issue Nepal must complement hydropower by picking the low-hanging fruit of solar and wind. Mustang alone has the potential to generate 3,000MW from solar and wind projects. Transporting 60m turbine towers to remote areas will present a problem, and wind generates power only in the afternoons when demand is lowest. Solar will not address evening peak demand. Even so, these two renewable energy sources can be built much faster than hydro, and are becoming cost-effective even for battery storage.

But there are several things that need to happen before that. First and foremost, Nepal's politicians need to get their act together — a tall order at a time when they are pulling in different directions, and the Prime Minister is going to be absent for an extended period. Extortion, corruption and local opposition to large projects need to be urgently addressed if Nepal wants serious investors to fast-track investment. Political focus is critical because of overlapping jurisdiction over inter-provincial rivers, as well as negotiations with India to allay its fears over large reservoir projects.

The NEA unbundling has to be implemented so that reforms like time-of-day pricing, solar net metering for households, further reducing system loss and pilferage, and aggressive promotion of LED can happen.

As with everything else in Nepal, the answer to exploiting our vast energy potential lies in governance and vision. We need a clear business strategy for import substitution through energy self-sufficiency.

10 years ago this week

On the 40th anniversary of UNICEF in Nepal 10 years ago, former Under-Secretary General of the United Nations Kul Chandra Gautam praised Nepal’s achievements in child welfare. On the 50th anniversary, it looks like progress has stalled.

Excerpt of Gautam’s comment in Nepali Times #477 of 20-26 November 2009:

‘In 1970 Nepal had the 12th highest child mortality rate in the world. By last year, we had moved ahead of 50 other countries, to rank 62nd. During this period the under-five mortality rate went down by nearly 80 per cent, from 250 to 51 per 1000. Four decades ago, 400,000 children were born every year, but 100,000 of them died before reaching their fifth birthday. Last year, 732,000 children were born, but less than 40,000 died. Forty years ago, barely a quarter of school-age children went to primary education. Today 90 per cent of children enrol in primary school, including a majority of girls.’