Nepali Times

The light at the end of a dark tunnel

Energy economist Bikash Pandey is the director of Clean Energy Group, Winrock International. He spoke to Nepali Times this week during a visit to Nepal about some immediate and long-term steps that can be taken to reduce power cuts.

Interview
Interview | From Issue #432 (January 2-8, 2009)

MIN RATNA BAJRACHARYA
Nepali Times: Just how serious is this power crisis we are facing?
Bikash Pandey: It is very serious in terms of the economic impact and the loss of productivity. Private industries, civil servants, NGOs, students, everyone is affected over and beyond the inconvenience of having to live in the dark for long hours. On the other hand, the crisis is not so serious that there is no end in sight. If we put our heads together and mobilise modest resources, the problem can be resolved for now and forever into the future.

What should be the fastest and the cheapest way to reduce power cuts by next winter?
The fastest and cheapest way is to take up a number of energy efficiency measures. It is also a 'no regrets' option meaning that it is a good thing to do in itself. The most easily implementable energy efficiency measure for Nepal given the dominance of electric lighting in the load profile is to substitute widely used and inefficient incandescent lamps with Compact Fluorescent Lamps (CFL) or other efficient lighting technologies like white LED. Done as a campaign to provide every electrified house at least two CFLs, at low or even zero cost, would reduce demand for power to the point where load shedding would be limited to no more than 2-3 months of the year and even that for a few hours only. Substituting 5 million CFLs would reduce load during peak hours by 200 MW.

This is not a far fetched goal given that countries like Uganda which have much lower rates of electrification (4 per cent compared to 40 per cent in Nepal) have distributed almost a million CFLs in the past two years with dramatic reduction in demand.

Other measures are to upgrade transmission lines to transfer power easily from new power plants like Middle Marsyangdi and private plants to load centres as well as to reduce technical losses. Converting street lights to use solar energy is another immediate term option.
 
And what would be some long term strategies we have to keep in mind?
In addition to energy efficiency, there has to be regular investment in power generation. The present crisis is the result of NEA not signing sufficient project agreements with private developers in the past five years and not making sufficient investments itself. The NEA and the government have announced up front power tariff for projects up to 25MW in the past week.This should be welcomed. If that had been done five years ago, there would be no power shortage now.

Hydropower is the cheapest source of power for Nepal but it looks expensive since private project developers have to repay loans within seven years or so, even though the projects themselves run for 40 years or more. This distortion can be resolved either by paying developers higher prices for their power for the duration of their loan repayment period and then reducing tariffs for the life of the project or by making arrangements for projects to receive loans with  repayment periods of 15 years or more.

Should we focus on the export of electricity to augment income or first meet domestic demand?
At this time of severe power shortage in the country the priority should certainly be to generate power for domestic use. The first of the smaller projects which can meet domestic needs can be on line in the next two to three years if they can receive their Power Purchase Agreements and financing in the next few months. I am not against export projects as long as Nepal gets a high royalty and the option to purchase the power it needs from these projects for domestic consumption. Luckily run of river hydropower is a renewable resource and is not exhausted by export. Projects which generate power for export need to have agreements in place to give priority to domestic supply when the demand in Nepal grows. 
 
How about electric public transport?
Electricity has multiple uses in Nepal. Of the total commercial energy we use in the country, 85 per cent comes from imported petroleum and coal and only 15 per cent from the country's indigenous hydropower. The sectors that use the most imported fuel are transport, industry, domestic and agriculture sectors. Once we set the price correctly and are able to generate power on a regular basis to meet growing demand, an aggressive campaign should be launched to use electricity in public transport, industrial furnaces and boilers, household cooking and heating and to replace the ubiquitous diesel pumps. We should aim to change the ratio from the current 85:15 to 15:85 by 2020. This demands generation  some 6,000MW of power for domestic consumption alone.

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