For decades, Nepalis have lamented the country’s inability to harness its enormous hydropower potential. Now, the problem seems to be the country’s inability to use the surplus that will soon be generated. Since 1989, 123 large hydropower projects have been constructed on Nepal’s fast-flowing Himalayan rivers bringing the total generation capacity to 2,148.5MW. After new projects come online in the next six years, generation capacity could be 18,000MW during the monsoon and 11,000MW in winter. Our focus now should be not just on generating more power, but finding out ways to boost consumption by making <a href="https://www.nepalitimes.com/here-now/the-geopolitics-of-nepal-s-water-and-electricity">electricity more competitive and sustainable</a>. Private sector projects generate 51% of Nepal’s hydropower, and the rest are government projects. We also need to decide on these three options: whether to entirely privatise hydropower production, give more ownership to the government, or create a strong regulatory body to let private and public go hand in hand. Private investments in power projects usually revert to government ownership in 30. Given how battery and hydrogen technology is revolutionising the world, it is difficult to say what will happen in the energy sector in the next three decades. Even so, Nepal’s development may continue to rely on hydropower as the primary alternative to petroleum. At present, 95% of Nepali households have access to electricity. But domestic consumption is not likely to keep pace with the increase in generation capacity. As it is, much of the valuable electricity generated in the monsoon is ‘spilled’ in the monsoon while there is a shortage in winter when 30% of power demand is met with imports from India (at up to Rs32 per unit last year). Nepal <a href="https://www.nepalitimes.com/here-now/nepal-s-1st-hydroelectric-plant-is-a-museum-piece">first started producing hydroelectricity in 1911</a> with the opening of Chandra Jyoti in Pharping. King Prithvi Bir Bikram Shah ushered in the dawn of the electric age by turning on the first electric lamp in Tundikhel. Nepal was only the second country in Asia to generate hydropower 111 years ago, and it was Prime Minister Chandra Shumsher Rana who brought in British engineers to commission the plant.  <figure><img src="https://publisher-publish.s3.eu-central-1.amazonaws.com/pb-nepalitimes/swp/asv65r/media/20230313030336_9ba299ac5298b4ca31bec8e563e7cd6dc8851c4ca31a22adac01b0c7b764ba0c.jpg" data-media-id="editor_2" data-image-id="20230313030336_9ba299ac5298b4ca31bec8e563e7cd6dc8851c4ca31a22adac01b0c7b764ba0c" data-rendition-name="original" width="1500" height="1000" loading="lazy" alt="Kulekhani Dam opened in 1982"><figcaption>The Kulekhani Dam opened in 1982, and is still the only large reservoir project in Nepal. Photos: NT ARCHIVE</figcaption></figure>  The intervening decades have been characterised with inaction and wasted opportunities. Nepal now has to play catchup so that electricity is affordable and accessible to increase consumption. One way to do that is to lower the electricity tariff so that it is competitive with the price of LPG. Nepal is still overwhelmingly dependent on <a href="https://www.nepalitimes.com/here-now/more-bullshit">biomass for energy</a>, and many rural homes use only one electric bulb for light and cook in firewood. This is largely due to the lack of access to electric stoves, refrigerators and other appliances. In 2021, the government announced that it would shift entirely to <a href="https://www.nepalitimes.com/here-now/potholes-on-the-highway-to-nepal-s-ev-future">electric vehicles (EVs)</a> by 2031. But this means investing in the necessary infrastructure as well such as charging stations, and incentives for EVs. Cement and steel industries are the largest consumers of electricity in Nepal. Proper planning is necessary to keep <a href="https://www.nepalitimes.com/here-now/nepal-s-precious-electricity-going-waste">electricity production from going to waste</a>, especially as it is expected to rise almost eightfold by 2030. Sadly, there seems to be no sense of urgency on the part of the government. It costs about Rs200 million to generate 1MW of electricity. A waste of 5,000MW is a loss of Rs1 trillion, and that is money invested by private shareholders and banks. Under such circumstances, loans and interests cannot be paid on time, which could lead to defaults. The trickle-down effect on the rest of the economy could be devastating. Serious economic diplomacy is needed to push efforts to export surplus electricity to India at a meaningful price until domestic demand rises. Despite rhetoric to increase production, Nepal also lacks enough domestic and foreign investment in the sector. Banks do not have enough capital and the interest is too high. We do not have the <a href="https://archive.nepalitimes.com/regular-columns/Comment/storing-water-reservoir-Nepal,1042">necessary infrastructure</a> either: project sites are accessible only for five months in a year due to bad roads during the monsoon. Extension of transmission lines is sluggish. Local obstruction like in the construction of a substation in Lapsiphedi is hindering progress. A national strategy and consensus is needed to expedite transmission lines. During the Panchayat era, a resettlement company was formed to arrange accommodation for residents displaced by the construction of <a href="https://archive.nepalitimes.com/article/nation/reservoirs-of-suspicion/hydropower-geopolitics%20,3991">large projects</a>. But it was dissolved when democracy was restored in1990. Today, there is no land acquisition body at the national level. Moreover, related agencies are working at cross purposes and have conflicting interests. For example, the Nepal Electricity Authority (NEA) is not only a producer but also the sole buyer of electricity generated by the private sector. It also determines the price of power, and it is often not attractive enough for the private sector. The Electricity Production Company, Hydropower Investment and Development Company and Electricity Development Department were all formed to generate hydroelectricity but there is no effective regulation of these bodies. The Electricity Regulatory Commission does everything but solve the existing problems or prepare for future challenges. Governmental agencies like the Ministry of Energy, NEA, Nepal Stock Exchange, Nepal Securities Board, CIAA, and Electricity Regulation Commission and Parliament committees should all coordinate their activities with a national strategy in mind. With such vested interests, hydropower investors also have to navigate a sluggish bureaucracy. But if we want to secure the future of electricity in Nepal, and <a href="https://www.nepalitimes.com/here-now/nepal-s-precious-electricity-going-waste">not waste precious power</a>, it is imperative that a single strong regulatory body is formed to streamline the sector in the national interest. Kumar Pandey is General Secretary of the Independent Power Producers' Association, Nepal (IPPAN). Translated from the Himal Khabar <a href="https://www.himalkhabar.com/news/134646" target="_blank">original</a>. Read also: <a href="https://www.nepalitimes.com/here-now/how-they-kept-nepal-in-the-dark-ages/">How they kept Nepal in the dark ages</a>, Ramesh Kumar <a href="https://www.nepalitimes.com/here-now/the-geopolitics-of-nepal-s-water-and-electricity">The geopolitics of Nepal’s water and electricity</a>

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Securing Nepal’s electric future

<figure><img src="https://superdesk-pro-c.s3.amazonaws.com/sd-nepalitimes/20221114131124/637233e79c7e80680e0c4906jpeg.jpg" alt="" width="853" height="640"/><figcaption>The damage to the channel diverting water from the Melamchi to the tunnel at the project headwork. The debris here is 20m deep. Photo: SHIVA BASKOTA</figcaption></figure>In June 2021, a massive debris flow on the Melamchi River killed at least 30 people, submerged settlements, and nearly destroyed Nepal’s biggest infrastructure project to supply water to Kathmandu.Scientists blamed <a href="https://www.nepalitimes.com/banner/how-the-climate-crisis-adds-to-child-marriage-in-nepal/">the climate crisis</a>. A wall of mud raced down the river after unprecedented rainfall at the beginning of the monsoon on glacial deposits left by melted ice.Boulders and mud paste buried the headworks of Melamchi Water Supply Project under 20m of debris, resulting in damage worth more than Rs2 billion. Timely closure of the gate saved the project’s 26km tunnel to Kathmandu from irreversible damage.“Melamchi project cost $800 million and nearly 25 years to complete, but it took just one weather event to render it nearly useless,” says water expert Madhukar Upadhyay. “It only goes on to prove that our landscape is not suitable for large infrastructure projects. And now we have climate change in the mix.”<figure><img src="https://superdesk-pro-c.s3.amazonaws.com/sd-nepalitimes/20221114131124/637233eb9c7e80680e0c4907jpeg.jpg" alt="" width="1500" height="500"><figcaption>Aerial drone view of the Melamchi headworks area at 1:00pm (left) and 1:52pm (right) on 16 June. Photo: GeoVation Nepal</figcaption></figure>Nepal’s only reservoir project on the Kulekhani was commissioned in 1982 and was supposed to have a lifespan of 100 years. But a cloudburst in the catchment area in 1993 deposited so much debris into its lake that the cascade project that generates 106MW of electricity will now function for only another 30 years.The Himalayan mountains are warming between 0.3 to 0.7°C faster than the global average, and a report by the International Centre for Integrated Mountain Development (ICIMOD) predicted that even in the best-case scenario, more than one-third of the remaining ice will melt during this century. If current global heating trends continue, two-thirds of the ice will be gone.Meltwater from Himalayan glaciers collect behind fragile moraine dams, increasing the threat of <a href="https://www.nepalitimes.com/banner/danger-nepals-glacial-lakes-are-filling-up/">Glacial Lake Outburst Floods (GLOFs)</a> that can wash away infrastructure: hydropower plants, highways, bridges and canals.As it is, many of these projects have either ignored or falsified their Environmental Impact Assessment (EIA). They are built along rivers that have not been properly assessed for extreme weather.<img src="https://superdesk-pro-c.s3.amazonaws.com/sd-nepalitimes/20221114131124/637233ee9c7e80680e0c4908jpeg.jpg" alt="" width="960" height="640">A paper last month in the journal Nature Geoscience titled ‘High Mountain Asia hydropower systems threatened by climate-driven landscape instability’ has a checklist to minimise climate-driven hazards on Himalayan infrastructure.‘Maps of the distribution of paraglacial zones, sediment yield and hazard susceptibility that better delineate current and future unstable landscapes and erosion-prone regions should be produced,’ states the paper. ‘Policy development regarding maintaining existing and planning of new hydropower projects should be guided by such hazard and risk maps.’Researchers point out that storage capacity design <a href="https://www.nepalitimes.com/opinion/climate-risk-to-hydropower-investment/">should consider potential storage losses</a> associated with increasing sediment loads due to climate change, and provide additional storage, sediment bypassing, sluicing, dredging and drawdown flushing to minimise sedimentation and increase reservoir lifespans.Catchment management can reduce slope instability and erosion rates with reforestation and check dams. ‘For existing reservoirs, a reassessment of sediment management solutions aimed at enhancing sustainable sediment management is recommended,’ the Nature Geoscience paper states.<figure><img src="https://superdesk-pro-c.s3.amazonaws.com/sd-nepalitimes/20221114131124/637233f19c7e80680e0c4909jpeg.jpg" alt="" width="960" height="640"><figcaption>Photo: AMIT MACHAMASI / NEPALI TIMES</figcaption></figure>Upadhyay agrees: “The first thing is to study and assess the area before the start of the project. In case they are already functioning, we have to monitor how they are affected, which will give us insights into future weather patterns. But most importantly, we need localised forecasts.”Indeed, the paper also recommends monitoring, forecasting and early-warning systems to be developed and implemented. ‘Strategically oriented monitoring networks that measure high-altitude climate, glacier and permafrost dynamics, glacial lakes, unstable slopes and water and sediment fluxes should be expanded for high-risk areas,’ it adds. Nepal has either too much or too little water. Seasonal floods and the weather extremes here predate climate change. Other disasters not related to climate, such as earthquakes, multiply the risk for infrastructure.And yet, there is no proper mechanism even to assess loss and damage post-disaster which is ironic given Nepal’s strong stance on climate justice at international climate conferences.<figure><img src="https://superdesk-pro-c.s3.amazonaws.com/sd-nepalitimes/20221114131124/637233f49c7e80680e0c490ajpeg.jpg" alt="" width="1231" height="603"><figcaption>An oblique view showing riverbank erosion at Timbu village on 16 June. Photo: GeoVation Nepal</figcaption></figure>“Loss and damage as an issue has been highly politicised, but it is also rooted in climate justice, and what we are experiencing today is a cumulative impact of the last 150 years,” explains climate scientist Ajaya Dixit. “Nepal must continue to be a part of this discourse, but we must also do our bit. We must not just lobby for funds but also for support and partnerships to actively address changes due to the climate.”Nepal’s current response to climate disasters is limited to search, rescue and relief. Mitigating and adapting to risk, for example by reducing the level of glacial lakes such as Imja and Two Rolpa, are dependent on funding.Nepal now has better standardised data through the BIPAD portal under the National Disaster Risk Reduction And Management Authority (NDRRMA). The next step is to map hazards, prioritise infrastructure and people most at risk through local first responders.<figure><img src="https://superdesk-pro-c.s3.amazonaws.com/sd-nepalitimes/20221114131124/637233f69c7e80680e0c490bjpeg.jpg" alt="" width="857" height="500"><figcaption>Two scientists are dwarfed by the thick loose sediment field brought down by the flood and deposited on the 2.5km long flat valley floor. The sediment field is crumbling and adds more debris into the Melamchi. Photo: SHIVA BASKOTA</figcaption></figure>Adds Dixit: “We need a large-scale systemic change to adapt to the climate crisis but for now we can start with developing and implementing a robust assessing mechanism. And it is unacceptable that our infrastructure still follows designs, methods and metrics from the time when climate change was not even in our vocabulary.”Such is Nepal’s hydropower potential that it has provided it geopolitical leverage. India is increasingly expanding its investment on Nepal’s rivers, and building large reservoir projects. Chinese companies are building hydropower projects directly downstream from high-risk glacial lakes in Tibet.Climate disasters raise the issue of a cross-border risk, since many of Nepal’s start in China, where there are many glacial lakes that are at bursting point. GLOFs originating in China have in the past destroyed highways and hydropower projects on the Bhote Kosi.<figure><img src="https://superdesk-pro-c.s3.amazonaws.com/sd-nepalitimes/20221114131124/637233f99c7e80680e0c490cjpeg.jpg" alt="" width="1013" height="562"><figcaption>Upper reaches of the Melamchi scoured by landslides and debris flow. Photo: SHIVA BASKOTA</figcaption></figure>Research by Chinese scientists on the Nyainqêntanglha mountains on the Tibetan Plateau even five years ago showed that the frequency of destructive GLOFs were increasing, and they proposed urgent mitigation measures.‘Potential damage from GLOF disasters is significant,’ wrote Shijin Wang and Lanyue Zhou in the <a href="https://link.springer.com/article/10.1007/s13753-017-0152-7" target="_blank" rel="noopener noreferrer">International Journal of Disaster Risk Science</a>, ‘There is an urgent need for (Chinese) government departments to implement engineering measures on all potentially dangerous glacial lakes.’Nepal is increasingly reliant on selling its surplus electricity to India. Power generation in the monsoon exceeds 2,100MW even as average domestic demand stands at just 1,550 MW. Another 2,500MW of electricity will be added to the grid in the next two years, while 3,000MW of new projects are in the pipeline.But these projections are at the mercy of future climate-induced risk. Says Upadhyay: “If hydropower is indeed our future, we must treat it with that kind of seriousness and commitment. We must bring in experts who think not only in monetary terms, but holistically at how the climate crisis is changing the Himalayan landscape.”Read more: <a href="https://www.nepalitimes.com/opinion/climate-risk-to-hydropower-investment/">Climate risk to hydropower investment</a>, Ajaya Dixit

Climate-smarter Himalayan infrastructure

<figure><img src="https://superdesk-pro-c.s3.amazonaws.com/sd-nepalitimes/20221114131112/637230969c7e80680e0c2574jpeg.jpg" alt="" width="1500" height="1000"/><figcaption>The Kulekhani Dam opened in 1982, and is still the only large reservoir project in Nepal. Photos: NT ARCHIVE</figcaption></figure>A rapidly warming atmosphere is <a href="https://www.nepalitimes.com/banner/nepals-mountains-are-melting/" target="_blank" rel="noopener noreferrer">melting Himalayan glaciers</a>, changing the seasonal flow of water in Nepal’s rivers, and increasing the interest of downstream India to regulate water and generate electricity.For Nepal, this is an opportunity to finally tap the potential of the country’s ‘white gold' to meet growing demand for electricity domestically, as well as redress its trade deficit with India by selling <a href="https://www.nepalitimes.com/banner/nepals-precious-electricity-going-waste/" target="_blank" rel="noopener noreferrer">surplus power</a>.New Delhi’s priority has been not so much electricity but to try to regulate the flow of the Ganges by storing monsoon runoff in its Himalayan tributaries in Nepal, which is why it has lately started showing an interest in building large <a href="https://archive.nepalitimes.com/article/nation/reservoirs-of-suspicion/hydropower-geopolitics%20,3991" target="_blank" rel="noopener noreferrer">reservoir projects in Nepal</a>.“There is no doubt that India's real interest is in Nepal’s water resources rather than hydroelectricity,” says Sheetal Babu Regmi, formerly head of the Water and Energy Commission. “And water is going to be an even more critical commodity with the climate crisis.”Almost two-thirds of the water in the Ganges that flows through some of the most densely-populated regions in the world comes from the rivers of Nepal. And most of that flows down in the four monsoon months between June-September.In the rainy season, there are destructive floods in the plains, and for nine months in a year, the rivers have low flow. <a href="https://archive.nepalitimes.com/regular-columns/Comment/storing-water-reservoir-Nepal,1042" target="_blank" rel="noopener noreferrer">Storage dams in Nepal</a> would even this out, reducing flood damage during the monsoon, and make adequate water available the rest of the year.Climate change means that there will be even less water flowing in the Ganges and its tributaries in the dry season in the coming decades.A recent report by India's NITI Ayog showed that nearly 600 million Indians are facing a shortage of water for irrigation and household use, and singled out 21 cities, including New Delhi, as potentially facing groundwater depletion by 2030.Another report by ICIMOD (the Kathmandu-based International Centre for Integrated Mountain Development) warned that failure to reduce carbon emissions would lead to the <a href="https://www.nepalitimes.com/banner/a-terrifying-assessment-of-himalayan-melting/" target="_blank" rel="noopener noreferrer">Himalaya losing up to two-thirds of its remaining glaciers</a> during this century.It is therefore strategically important for India to ensure regulated year-round water on the Ganges, and for this it needs a government in Kathmandu that is amenable to allowing it to build large reservoirs on Nepal’s rivers.However, given the historical asymmetry of past Indian projects on <a href="https://www.nepalitimes.com/banner/the-kosis-sorrow-and-scope/" target="_blank" rel="noopener noreferrer">the Kosi</a> and Gandaki, river projects are political hot potatoes in Nepal. Governments in the past have fallen because incumbents signed off on river treaties with India that were deemed to disproportionately benefit India.<figure><img src="https://superdesk-pro-c.s3.amazonaws.com/sd-nepalitimes/20221114131112/637230999c7e80680e0c2575jpeg.jpg" alt="" width="1185" height="774"><figcaption></figcaption></figure>Which is what makes the timing of announcements of a slew of new Indian investment in river projects in Nepal after Prime Minister Sher Bahadur Deuba-led coalition came to power last year so significant.On 14 June, Nepal’s cabinet gave permission to India’s state-owned NHPC Limited (formerly the National Hydroelectric Power Corporation) to build the 750MW West Seti hydropower project. The China Three Gorges International Corp (CTG) had in 2018 been edged out of the reservoir project with a 194m high dam in western Nepal.The NHPC had made a proposal to Nepal’s Investment Board in May for the construction of the project following promises made by Prime Minister Deuba during his visit to India in March. And while on the campaign trail in Dadeldhura in May, Deuba had revealed that construction of the West Seti would have to be given to India because otherwise New Delhi would not buy electricity off projects with Chinese investment.But experts have raised serious issues with the way such a large project has been handed over to Indian companies without the requisite competitive bidding process, and using a legal loophole to circumvent Nepal’s Public Private Partnership and Investment Act.An agreement to hand over a 51% stake in the construction of the <a href="https://www.nepalitimes.com/business/arun-4/" target="_blank" rel="noopener noreferrer">Arun-4 hydropower project</a> to another Indian state-owned company, Sutlej Hydropower Corporation, was also made in June during Indian Prime Minister Narendra Modi’s visit to Lumbini.Arun-4 follows Sutlej’s joint venture on the upstream <a href="https://www.nepalitimes.com/latest/oli-modi-launch-arun-iii/" target="_blank" rel="noopener noreferrer">Arun-3 project</a> in eastern Nepal, and the government was so secretive about the deal that Nepalis came to know about it only after Nepal Electricity Authority (NEA) executive director Kulman Ghising signed the agreement in Lumbini with Sutlej Hydropower chair Nand Lal Sharma.Sutlej Hydropower earlier acquired the 679MW Lower Arun project construction rights under former prime minister K P Sharma Oli. The cascade of Indian projects on the Arun River will generate 2,000MW of electricity in eastern Nepal.And with West Seti and Upper Karnali projects, Indian companies will be generating another 2,000MW of electricity from western Nepal for export to India.Additionally, the government is also planning to award the 450MW Seti River-6 project to NHPC. Sources at the Investment Board Nepal say that the Indian company is taking most of the electricity, and offering only 3% of free electricity to Nepal. The NHPC has also submitted a proposal for the 480MW Phukot Karnali and the 1,902MW Mugu Karnali projects in north-western Nepal.<figure><img src="https://superdesk-pro-c.s3.amazonaws.com/sd-nepalitimes/20221114131112/6372309c9c7e80680e0c2576jpeg.jpg" alt="" width="800" height="471"><figcaption>Nepal and India signing the Arun-4 hydropower project deal in Lumbini in May in the presence of Prime Ministers Modi and Deuba..</figcaption></figure>The fact that all these projects have been announced only after Deuba replaced K P Oli as prime minister last year indicates that his coalition partners have been friendlier to Indian proposals on river projects than previous governments.Indeed, the 900MW Upper Karnali hydroelectric project which was awarded in 2014 to the Indian private company GMR was given a two-year extension despite its failure to finalise investment.“Nepal is playing a geopolitical game with hydropower, flouting the Constitution and prevailing laws,” says former water resource minister Dipak Gyawali.Nepal’s Constitution stipulates that treaties or agreements related to the distribution of natural resources and their use must be approved by a two-third majority in the Federal Parliament.Other experts however, say that Nepal cannot just sit on its rivers, it must harness them for economic progress, and for this it has to cooperate with India on an equal footing for mutual benefit.“Indian investment in the hydropower sector will benefit Nepal, it will mean the electricity we generate will find a ready market in India and reduce our trade deficit,” says NEA director Kulman Ghising.However, it is the fear that India will derive disproportionate benefit from these joint projects that worries Nepali experts, especially since there is historical precedent for that.India has also put pressure on Nepal by refusing to buy electricity from projects built with investment or contractors from China. India refused to buy surplus power from Nepal this monsoon, wasting 500MW of electricity. Chinese investors are presently involved in building hydropower plants with a total capacity of 1,000MW.Deuba reached an energy-sharing agreement during his India visit in March, under which the Central Electricity Authority of India approved 364MW of electricity imports from six hydropower projects in Nepal -- but only those not built by the Chinese.Foreign policy experts have seen a clear departure on the part of Prime Minister Deuba towards India on river basin projects, with Indian companies being favoured over Chinese ones.<figure><img src="https://superdesk-pro-c.s3.amazonaws.com/sd-nepalitimes/20221114131112/6372309e9c7e80680e0c2577jpeg.jpg" alt="" width="1920" height="1080"><figcaption>The Kosi Barrage diverts water for irrigation in Bihar, and disgorges the river’s excess silt-laden water during the monsoon.</figcaption></figure>In March, the Deuba-led government decided to revoke the license issued to the China Gezhouba Group Company (CGGC) to develop the mammoth <a href="https://www.nepalitimes.com/banner/nepals-mega-dam-is-a-mirage/" target="_blank" rel="noopener noreferrer">$2.5 billion Budi Gandaki hydropower project</a> west of Kathmandu, and to build its 263m high dam to generate 1,200MW on its own.The Budi Gandaki has been a victim of geopolitical pingpong for the past five years. In 2017, Maoist Prime Minister Pushpa Kamal Dahal’s government awarded the project to CGGC, but the subsequent Deuba government reversed the decision, angering the Chinese. In 2018, K P Oli’s administration restored the contract, only to have Deuba cancel it again this year.Chinese Ambassador Hou Yanqi stated in May that it was “wrong to change policy (on Budi Gandaki) with every change of government … such actions kill the investment climate”.“It is not diplomatically mature to repeatedly undo decisions of preceding governments every time power changes hands,” cautions foreign affairs expert Dinesh Bhattarai.Experts say that India’s policy on it energy imports from Nepal will not only just discourage future Chinese investments in Nepal which is its goal, but also other investors. It will also throw Nepal’s policy of equidistance between China and India off balance.All this is not new. Before Three Gorges, Australia’s Snowy Mountain Engineering Company (SMEC) also pulled out of the West Seti project in 2010 after India showed no interest in buying its electricity. Then the Norwegian company SN Power abandoned the export-oriented 650MW Tamakosi 3 after not getting the green light from New Delhi to buy its power.Most of Nepal’s hydropower projects so far are run-of-river schemes in which generation capacity falls during the dry season. This means Nepal has a power deficit in winter when it needs to import from India, and has a surplus in the monsoon which it has started exporting to India.Having reservoir projects would change that, and give Nepal a more year-round generation capacity, while also regulating water on rivers as a bonus. But even with the present hydropower projects, Nepal earned Rs1.72 billion just in June from selling its excess electricity to India.“India considers water a strategic resource, and is cleverly trying to keep Nepal's energy system under its influence,” explains Dipak Gyawali, the former minister.Clearly, Nepal needs to prioritise domestic consumption of electricity over its export and channel it into electrification of transport, industries and homes. All of this will automatically cut down on petroleum imports, reducing its increasing trade deficit.Selling raw electricity to India is not as beneficial, experts point out, because Nepal is selling its power at a much cheaper rate to India than to domestic consumers. Switching to electric vehicles to reduce Nepal’s petroleum import bill by just 10% would save the country over Rs30 billion a year.The combined capacity of Nepal’s hydropower projects has now exceeded 2,100MW even as average domestic demand stands at just 1,550 MW. Another 2,500MW of electricity will be added to the grid in the next two years, while 3,000MW of new projects are in the pipeline.In a few short years, Nepal will have surplus year-round electricity, and experts say it will be better for the economy to use the power within Nepal to manufacture value-added products than to rely so heavily on selling power to India.They say Nepal needs to rework its energy needs so as to increase domestic consumption, and cut its widening trade deficit with India by reducing petroleum imports rather than just exporting power.

The geopolitics of Nepal’s water and electricity

<img src="https://superdesk-pro-c.s3.amazonaws.com/sd-nepalitimes/20221114101124/6372095e9c7e80680e0b5539jpeg.jpg" alt="" width="1576" height="786"/>On 28 February, we will come either to the finish line or the starting line of <a href="https://www.nepalitimes.com/latest/mcc-row-rocks-nepals-ruling-coalition/" target="_blank" rel="noopener noreferrer">the US-funded Millennium Challenge Corporation (MCC) project</a> to upgrade Nepal’s infrastructure.The $500 million that the MCC is offering Nepal as a grant for the development of transmission lines and upgrading the road network needs to be ratified by that date.There has been a lot of debate in Nepal’s cybersphere and <a href="https://www.nepalitimes.com/latest/the-deal-breaker/" target="_blank" rel="noopener noreferrer">the political arena that is spilling out into the streets with rallies</a>. The points of view are highly polarised, and we left logic behind a long time ago — we are now debating on emotion and rhetoric.When King Mahendra wanted the Chinese to build the Arniko Highway connecting Kathmandu to Lhasa in the 1960s, there was a similar debate about whether or not it was a good idea. India and China had just fought a war, and the Cold War was at its height.Many worried that the <a href="https://archive.nepalitimes.com/article/Nepali-Times-Buzz/chinese-ink-wash-paintings-in-Nepal,2622" target="_blank" rel="noopener noreferrer">trans-Himalayan highway </a>would give direct access to our northern neighbour to the heart of Nepal and down to the plains, while others felt that this would be the route to open trade and commerce between Nepal and China.King Mahendra pushed ahead and built the Arniko Highway, and six decades later, it is a major artery for bilateral trade and cultural relations.Similarly in the early 1980s there was intense domestic and international debate on the development of the <a href="https://www.nepalitimes.com/here-now/dam-it-its-all-about-the-water/" target="_blank" rel="noopener noreferrer">Arun 3 hydropower project</a> that would have not only met all of Nepal’s energy demand at the time, but also allowed export of surplus energy to India.After much acrimonious debate, the <a href="http://archive.nepalitimes.com/news.php?id=11083#.Ygiu_ShBzOQ" target="_blank" rel="noopener noreferrer">World Bank pulled out of financing</a> this project. This pretty much put an end to the development of major projects in Nepal for many decades, even while Bhutan took advantage of harnessing its water resources.By negotiating with India, it used revenue from electricity exports to enhance the quality of life of its people, and raised per capita income. Decades later, <a href="https://www.nepalitimes.com/here-now/how-they-kept-nepal-in-the-dark-ages/" target="_blank" rel="noopener noreferrer">we in Nepal are still trying to catch up</a> in harnessing our own water resources, and develop <a href="https://www.nepalitimes.com/banner/nepals-precious-electricity-going-waste/" target="_blank" rel="noopener noreferrer">our hydropower potential</a>.Once again, we as a nation and people, stand at the point of <a href="https://www.nepalitimes.com/here-now/power-politics-delays-mcc-in-nepal/" target="_blank" rel="noopener noreferrer">deciding whether to accept</a> the $500 million MCC grant for the development of transmission lines and the enhancement of our road network or not.The people who need to examine the facts and make this decision are political leaders who we have trusted with our vote and put into Parliament. The decision they make must be for the wellbeing of all Nepalis, and Nepal as a nation, now and into the future.I am a banker and I can tell you that as per the guidance and direction of Nepal Rastra Bank and the government of Nepal, the banking industry as by mid-December 2021, had invested Rs215 billion in energy projects across Nepal.We need to increase this to 7% of the total loan portfolio by April, then to 9% by 2023 and 10% by 2024. This translates to 1,920MW of installed capacity, with construction licenses for 7,870MW. Of these, 214 projects are by private producers for 6,970MW, and foreign investment for 900 MW.In addition, another 37 projects for 2,576MW and 1,200MW of Investment Board Nepal (IBN) projects have applied for construction licenses. By the end of this fiscal year alone, we anticipate installed capacity to grow to 3,300MW.The nation’s focus on <a href="https://www.nepalitimes.com/opinion/decentralising-hydropower/" target="_blank" rel="noopener noreferrer">harnessing our river resources and generating energy</a> is working, we are well on the way to being a major energy producing nation. This means that currently, Rs215 billion of the bank deposits of the citizens of Nepal are already invested into these projects through loans, and the amount will increase exponentially in the years ahead.The hard-earned deposits of millions of Nepalis are the main source of funding for the development of these projects. We stand at a point where we have to firstly stimulate domestic demand and consumption of electricity, and secondly facilitate the export of electricity to our neighbours.The common and critical factor for both these goals is the need for transmission lines across Nepal, that can effectively and efficiently evacuate the electricity from these projects, and get the power to the internal or external markets to spur the economy.If we do not start to put <a href="https://www.nepalitimes.com/opinion/decentralising-hydropower/" target="_blank" rel="noopener noreferrer">the needed transmission infrastructure</a> in place to do this, then the turbines will spin uselessly, wasting the electricity generated with phenomenal losses. Nepal’s entire financial sector will be in peril if the hydropower sector faces such loss from spilled energy.I do not know if Nepal should ratify the MCC and take the $500 million grant, that is for our elected leaders to decide. But I do know that if we do not get the needed transmission lines in place at the earliest then the savings of millions of Nepalis that the banking sector has been directed to lend to the hydropower sector will be in troubled waters.Many thousands of Nepalis who have invested in shares of hydro projects may also stand to lose if the transmission lines are not built. Politicians who have directed the banking sector to invest such a large quantum of the Nepali peoples savings in the energy sector must have a plan on how to get the power we generate to market.As a banker, all I can say is whether we take this $500 million grant from the MCC or take loans from somewhere else, we need to get the funds to build these transmission lines.February 28 is only two weeks away. Nepal’s leaders need foresight and courage to make the correct decision for the future. It is a choice between darkness and light, deprivation and prosperity.Anil Shah is a concerned Nepali, and a banker. Excerpts from NNSD post.Read also:<a href="https://www.nepalitimes.com/latest/the-deal-breaker/">The deal-breaker</a>, Sonia Awale<a href="https://www.nepalitimes.com/here-now/maoists-backpedal-on-mcc-letter/">Maoists backpedal on MCC letter</a><a href="https://www.nepalitimes.com/latest/nepal-house-speaker-embroiled-in-mcc-row/">Nepal House speaker embroiled in MCC row</a>

To be or not to be on the MCC

<figure><img src="https://superdesk-pro-c.s3.amazonaws.com/sd-nepalitimes/20221114091156/637202fc9c7e80680e0b27e3jpeg.jpg" alt="" width="2048" height="1366"/><figcaption>Vehicles are one of the biggest emitters of PM2.5 and other pollutants in Kathmandu. Photos: AMIT MACHAMASI</figcaption></figure>It is that time of the year again when smog makes <a href="https://www.nepalitimes.com/here-now/air-pollution-is-more-dangerous-than-smoking/" target="_blank" rel="noopener noreferrer">Kathmandu’s air hazardous to health</a>. Hospitals are swamped not with Covid, but COPD (Chronic Obstructive Pulmonary Disease).Once more, there is a flurry of media headlines about the dangerous concentration of suspended particles smaller than 2.5 microns from diesel exhaust.Read also: <a href="https://www.nepalitimes.com/banner/happy-new-air/" target="_blank" rel="noopener noreferrer">Happy New Air</a>, Sonia AwalePublic awareness about air pollution is at an all-time high, the average life expectancy of Kathmandu’s residents is reduced by at least four years. Yet, nothing happens. Why?“The awareness and knowledge have not translated into corrective action,” explains environmentalist Bhushan Tuladhar. “We know about vehicle emission tests but we ignore it, open burning is bad but we don’t stop, we have the opportunity to reduce air pollution with electric mass transport but we don’t invest in it.”<figure><img src="https://superdesk-pro-c.s3.amazonaws.com/sd-nepalitimes/20221114091156/637203009c7e80680e0b27e4jpeg.jpg" alt="" width="1500" height="1000"><figcaption> </figcaption></figure>Air pollution was directly linked to at least 42,100 deaths in Nepal in 2019. Almost half of that was due to breathing in particles smaller than 2.5 microns in diameter which can cross the air blood barrier in the lung capillaries. Most of those particles come from <a href="https://www.nepalitimes.com/here-now/green-sticker-green-light-to-pollute/" target="_blank" rel="noopener noreferrer">vehicle emission</a>.From 1990 to 2015, the number of vehicless in Nepal grew by 1,995,404 — most of them in Kathmandu Valley. In five years, that figure doubled to 3,987,267.This figure doesn’t include the exploding demand for cars and motorcycles after the end of the Covid second wave in mid-2021. Nepal spent Rs543 billion in importing vehicles, transport equipment and spare parts in four months from mid-July to mid-October, against Rs357 billion and Rs418 billion for the same periods in 2020 and 2019.“There has been an unexpectedly high demand for private vehicles in Nepal after the pandemic, especially two wheelers given the public’s hesitancy to use buses due to coronavirus fears,” says Dhruba Thapa of the National Automotive Dealers Association.<iframe style="border: none;" title="Total vehicles in Nepal" src="https://e.infogram.com/e0cdbfd0-0b3c-4f57-851e-7aced6e69116?src=embed" width="700" height="700" frameborder="0" scrolling="no" allowfullscreen="allowfullscreen"></iframe><a style="color: #989898!important; text-decoration: none!important;" href="https://infogram.com/e0cdbfd0-0b3c-4f57-851e-7aced6e69116" target="_blank" rel="noopener noreferrer">Total vehicles in Nepal</a><a style="color: #989898!important; text-decoration: none!important;" href="https://infogram.com" target="_blank" rel="nofollow noopener noreferrer">Infogram</a>Raju Chettri, CEO of the MAW Enterprises that imports Yamaha bikes in Nepal has a similar observation. He saw a decline in the annual sales of two wheelers from about 250,000 units to 190,000 right after the pandemic. But this year, the sales went up to 350,000 units.“There are two reasons behind this: pent-up demand and reduced use of public transport because of Covid fears,” Chettri says.There are <a href="https://www.nepalitimes.com/banner/poisoning-the-air-we-breathe/" target="_blank" rel="noopener noreferrer">more than 3.1 million two-wheeers in Nepal</a>, over one million of them in Kathmandu. They are adding to the capital’s foul air, as they are up to 10 times more polluting per passenger kilometre than buses and cars.<iframe style="border: none;" title="Total Motorbikes in Nepal" src="https://e.infogram.com/ea449cd7-2598-4cd4-8ae2-cd91858f9553?src=embed" width="700" height="700" frameborder="0" scrolling="no" allowfullscreen="allowfullscreen"></iframe><a style="color: #989898!important; text-decoration: none!important;" href="https://infogram.com/ea449cd7-2598-4cd4-8ae2-cd91858f9553" target="_blank" rel="noopener noreferrer">Total Motorbikes in Nepal</a><a style="color: #989898!important; text-decoration: none!important;" href="https://infogram.com" target="_blank" rel="nofollow noopener noreferrer">Infogram</a>Two-wheelers also emit invisible toxic gases like carbon monoxide, benzene and nitrous oxides, and increase the concentration of street-level ozone. Motorcycle exhaust may not be as visible as diesel exhaust, but they are highly poisonous — especially when there are so many of them. Besides exacerbating respiratory diseases, the gases are carcinogenic, causing cardiovascular diseases and Alzheimer’s.The solution is to shift rapidly to <a href="https://www.nepalitimes.com/banner/nepals-electric-transport-future-is-here/" target="_blank" rel="noopener noreferrer">cleaner electric vehicles</a>, not just for healthier air but also to meet Nepal’s net-zero pledge in Glasgow and to reduce the country’s burgeoning petroleum import bill.“The priority has to be on electric public transport and supporting infrastructure,” says environmentalist Tuladhar. “Electric buses are more expensive than diesel ones, so the government has to help with capital, and better manage Kathmandu’s public transport.”<figure><img src="https://superdesk-pro-c.s3.amazonaws.com/sd-nepalitimes/20221114091156/637203039c7e80680e0b27e5jpeg.jpg" alt="" width="720" height="480"><figcaption> </figcaption></figure>This week, Nepal opened its first electric charging station powered by solar panels for the Lumbini Development Trust. Similar charging stations can be set up for public and private vehicles in existing bus parks across Nepal and along highways. Sajha Yatayat which is procuring 40 electric buses is also trying to turn the former trolley bus terminal into a charging station.Shilshila Acharya of the Avni Center for Sustainability agrees that the priority should be on <a href="https://www.nepalitimes.com/banner/from-a-fossil-past-to-an-electric-future/" target="_blank" rel="noopener noreferrer">electrifying public transport</a> and encouraging bicycle lanes. She says, “Replacing cars with more cars even if electric only promotes consumerism. We have to give people reliable alternatives.”Kathmandu Valley Air Quality Management Action Plan held its first implementation committee meeting this week, during which it discussed lunching of a USAID-funded project for air pollution and a forecasting system with technical support from ICIMOD.“The problem of air pollution will take some time to be solved but we have started our homework,” says Indu Joshi of the Department of Environment. “At the moment, our biggest challenge is controlling open burning.”<figure><img src="https://superdesk-pro-c.s3.amazonaws.com/sd-nepalitimes/20221114091156/637203069c7e80680e0b27e6jpeg.jpg" alt="" width="2000" height="2625"><figcaption> </figcaption></figure>Apart from transport, garbage burning and biomass fuel for household heating and cooking are also contributors to Kathmandu’s dirty air. The problem is made worse in winter due to the <a href="https://www.nepalitimes.com/banner/how-weather-elevates-air-pollution-in-kathmandu/" target="_blank" rel="noopener noreferrer">Valley’s topography that traps surface pollution</a> in an inversion layer.Improper <a href="https://archive.nepalitimes.com/article/nation/a-load-of-rubbish-kathmandus-garbage-problem,4039" target="_blank" rel="noopener noreferrer">solid waste management in Kathmandu</a> means locals burn garbage by the riverbanks near residential areas — while, as studies show, segregation of waste at homes can reduce the city’s garbage volume by up to 80%.There is no other problem that is so directly linked with the health and economy of the country as urban air pollution. The <a href="https://www.nepalitimes.com/banner/nepal-lockdown-proves-air-quality-can-be-improved/" target="_blank" rel="noopener noreferrer">Covid-19 lockdown in 2020</a> is proof that Kathmandu can be cleaned up, it just needs <a href="https://www.nepalitimes.com/banner/dirty-politics-dirty-air/" target="_blank" rel="noopener noreferrer">the right leadership and the political will</a> to back it up.Says Shilashila Acharya: “Our policies on mobility and air pollution have to be people- and culture-centric, instead of focusing only on technology. We must build public pressure to force the politicians into action.”A public opinion poll in this paper just before the 2017 elections showed that a majority of Nepalis were concerned about the health impact of pollution. Since 2022 will be dominated by campaigning for the next election, this could be turned into the main criteria for candidates to win votes.

Sonia Awale

Breathing can kill you

<figure><img src="https://superdesk-pro-c.s3.amazonaws.com/sd-nepalitimes/20221110161152/636d1e8e9c7e80680e0af417jpeg.jpg" alt="" width="1100" height="608"/><figcaption></figcaption></figure>Household electricity consumption with the onset of winter, dedicated supply to industries and increase in electric vehicles is fuelling demand for hydropower, <a href="https://www.nepalitimes.com/banner/nepals-precious-electricity-going-waste/" target="_blank" rel="noopener noreferrer">reducing wastage</a>.This is why, despite having started exporting surplus electricity to India last month, the Nepal Electricity Authority (NEA) is now scrambling to meet a spike in domestic demand.Electricity demand is increasing in terms of both capacity (MW) and energy (units). On 13 December, the peak demand was 1,539MW, against 1,217 MW the same day last year. This difference of 322MW amounts to a 26.5% increase in peak demand. Also on 13 December, the <a href="https://www.nepalitimes.com/banner/power-politics/" target="_blank" rel="noopener noreferrer">electricity consumption in Nepal</a> was 27.2 million units, a 28.65% increase from 21.1 million units consumed on the same day last year.“The 30% increase in peak demand is a significant achievement,” said NEA Executive Director Kulman Ghising. “At the current rate, power demand could reach 2,000MW by July next year.”The government’s priority has been to reduce the ‘spill’ of electricity from <a href="https://www.nepalitimes.com/opinion/decentralising-hydropower/" target="_blank" rel="noopener noreferrer">hydropower stations</a> by increasing domestic consumption. It has focused on two areas: initiating policies to increase the use of electric appliances and providing industries with dedicated feeds. Over the last month, Ghising also visited several industrial areas to urge them to switch from diesel generators to electricity from the national grid.For this, the NEA has been working on the expansion and strengthening of transmission infrastructure as part of their short- and long-term plans. The NEA is also planning the construction of large capacity lines and substations for transmission and distribution by preemptively identifying possible places where electricity consumption may increase.The figures show that the current spike in demand is primarily due to <a href="https://www.nepalitimes.com/opinion/look-whats-cooking-in-nepal/" target="_blank" rel="noopener noreferrer">the use of electric stoves</a>, air conditioners and other household appliances and <a href="https://www.nepalitimes.com/banner/fully-charged-and-ready-to-go/" target="_blank" rel="noopener noreferrer">electric vehicles</a> in Kathmandu, where the peak demand has increased from 293MW last year to 382MW at present. Another area with higher consumption is industries. NEA signed a deal earlier in October to supply 30MW to the Hongshi cement factory in Nawalparasi.Industries previously reported experiencing 8.8 hours of power outages a week, forcing most factories to use generators, which in turn <a href="https://www.nepalitimes.com/review/post-lockdown-comeback-for-nepals-industries/" target="_blank" rel="noopener noreferrer">added to nearly 5% of their monthly expenditure</a>. The government initiative to power the industries hence would be cost-effective to the industry while also reducing wastage.To meet the current demand, the electricity grid is being supplied with 540MW from NEA's hydropower stations, 529MW from NEA's subsidiaries, 425MW from private power producers  and 25MW imported from India at peak evening hours.And yet, nearly 10% of Nepal’s population lives without electricity, most of them in Bajhang, Dolpa, Bajura, Jumla and Mugu in western Nepal which are not connected to the national grid.Experts say it is more beneficial to utilise and sell surplus power inside the country than exporting it to India. Nepal’s private industries are paying up to Rs11 per unit in electrical bills against 4.33 per unit by India.

Nepal electricity demand soars

<figure><img src="https://superdesk-pro-c.s3.amazonaws.com/sd-nepalitimes/2022111016114/636d138d9c7e80680e0a992ajpeg.jpg" alt="" width="1500" height="2000"/><figcaption>Photo: KUNDA DIXIT</figcaption></figure>While almost 10% of the Nepali population continues to live without power, the Nepal Electricity Authority (NEA) has begun to export surplus electricity to India citing the absence of transmission lines to transport power to load centres.Nepal reached a deal with the Indian Energy Exchange (IEE) on 1 November and from the following day began exporting up to 39MW of surplus electricity to India as part of the first phase of the agreement. However, even while the country sold excess electricity across the border, many parts of the far western districts of Bajhang, Dolpa, Bajura, Jumla and Mugu are not yet connected to the national grid.Three major transmission lines are in various stages of construction: the Butwal-Bhairawa double circuit which was started two years ago, the Biratnagar-Inaruwa 132KV line that began five years ago, and the Inaruwa-Dhalkewar-Hetauda 400KV transmission line which was started a decade ago.Read also: <a href="https://www.nepalitimes.com/latest/india-nepal-sign-power-exchange-deal/">India, Nepal sign power exchange deal</a><img src="https://superdesk-pro-c.s3.amazonaws.com/sd-nepalitimes/2022111016114/636d13909c7e80680e0a992bjpeg.jpg" alt="" width="1960" height="1204">The market for electricity expands beyond the border, but industries at home, particularly cement and steel, are still unable to operate at full capacity due to the unavailability of required electricity.The <a href="https://www.nepalitimes.com/here-now/insider-trading-taints-nepal-capital-market/">Sarvottam Cement factory</a> in Sunwal of West Nawalparasi has been forced to reduce working hours and run on generators, as the NEA only supplies 8MW of electricity from the 20MW required for the factory to run at full capacity. Of that, only 6MW of the electricity is actually usable because of circuitry and voltage issues.To make up for the shortage, Sarvottam Cement set up its own diesel-powered plant, but this only adds to the cost. NEA supplies electricity at Rs10 per unit, while a unit of electricity from a diesel-powered plant costs Rs27.“The country and industry both would have prospered had the government prioritised transmission lines and increased electricity consumption within the country," says Surendra Mahaseth, manager of the electricity department at the factory. The government made a policy-level decision last year to extend the national grid, prioritising cement and agro-based industries. But delays in the <a href="https://www.nepalitimes.com/latest/generating-electricity-and-cash-for-nepalis/">construction of transmission</a> lines have stymied progress.<figure><img src="https://superdesk-pro-c.s3.amazonaws.com/sd-nepalitimes/2022111016114/636d13939c7e80680e0a992cjpeg.jpg" alt="" width="1198" height="1227"><figcaption>Photo: BIKRAM RAI/ NEPALI TIMES ARCHIVES</figcaption></figure>It is not just industries that are worried. Private power producers which have already started construction are worried that their power will have limited distribution because of the lack of adequate transmission lines. Adding to their doom and gloom is the protracted delay in ratifying the US-supported $500 million <a href="https://www.nepalitimes.com/here-now/power-politics-delays-mcc-in-nepal/">Millennium Challenge Corporation (MCC) project</a> to build a 400kVA transmission line in Central Nepal to distribute power westwards as well as to India through the Butwal corridor.Read also:<a href="https://www.nepalitimes.com/latest/missing-links-in-nepals-mcc-debate/">Missing links in Nepal’s MCC debate</a>, Jeevan R Sharma and David Seddon<a href="https://www.nepalitimes.com/latest/mcc-damned-if-we-do-damned-if-we-dont/">MCC: damned if we do, damned if we don’t</a>Meanwhile, the Argakhanchi Cement Industry requires a transformer with a capacity of 20 mega-volt ampere (MVA) for its operation, but is only supplied with one for 10 MVA. Like Sarvottam cement, it has set up its own diesel power plant that produces 2.5MVA current.“We have been asking for as much electricity as we can get, and have been promised that it will be available soon,” says Uddhav Karki, manager of Argakhanchi Cement industry. “We will have to see if that happens.”<img src="https://superdesk-pro-c.s3.amazonaws.com/sd-nepalitimes/2022111016114/636d13959c7e80680e0a992djpeg.jpg" alt="" width="750" height="352">Meanwhile, NEA has started supplying electricity this week through its 132kV Bardaghat-Sari transmission line to supply 30MW of power to <a href="https://www.nepalitimes.com/latest/going-is-tough-for-chinese-investor-in-nepal/">Hongshi Cement Nepal-China joint venture in Nawalparasi</a>. There is hope that more will follow, but so far Hongshi looks like the exception.The NEA has cited delays in building substations and transmission lines as the reason why it cannot distribute surplus electricity during the monsoon, leading to its wasteful ‘spill’. It has blamed private landowners haggling over compensation for transmission lines over their property and lengthy legal battles for the delays."All planned transmission lines under construction across the country should have been completed within two years, but there is a lot of local opposition,” says NEA spokesperson Suresh Bahadur Bhattarai. “If only these pylons could be laid, we could reach customers and not have to waste a single watt.”However, others blame the scarcity of electricity on policymakers who prefer to export electricity rather than expand and expedite transmission lines and substations to increase access within Nepal.“It is like selling food to a neighbour while your own family goes hungry,” says water resource expert Ratna Sansar Shrestha. “We would have earned much more by increasing electricity consumption in the country and reducing the use of fossil fuels. This is the result of a three-decade-long ‘grand design’ by the Nepal government to earn profit by exporting electricity instead of building infrastructure within the country.”NEA could actually earn more from selling power domestically instead of exporting it. Nepal’s private industries are paying up to Rs11 per unit in electrical bills, while the average price of electricity sold to India is just Rs4.33 per unit.Environmental campaigner <a href="https://www.nepalitimes.com/banner/breathing-is-hazardous-to-health/">Bhushan Tuladhar</a> agrees that successive governments have failed to increase domestic electricity consumption by either not having the transmission lines to take it to load centres, or pricing it too high. He asks: “Why has the government not taken any steps to operate trolleybuses and electric public transportation despite having included it in multiple five-year plans?”He adds that the government has failed to form an environment protection and climate change management committee even though it made a promise to do so years ago.Adds Tuladhar: “When the government fails to build proper infrastructure and a strategic plan to increase electricity consumption for Nepali industries, transportation and households, it is left with no choice but to export it.”Translated from <a href="https://www.himalkhabar.com/news/126589">the original</a> by Shristi Karki.Read also: <a href="https://www.nepalitimes.com/here-now/how-they-kept-nepal-in-the-dark-ages/">How they kept Nepal in the dark ages</a>, Ramesh Kumar<a href="https://www.nepalitimes.com/banner/nepals-1st-hydroelectric-plant-is-a-museum-piece/">Nepal’s 1st hydroelectric plant is a museum piece,</a> Ramesh Bhushal

Nepal’s precious electricity going waste

<figure><img src="https://superdesk-pro-c.s3.amazonaws.com/sd-nepalitimes/20221110151116/636d088b9c7e80680e0a6022jpeg.jpg" alt="" width="900" height="600"/><figcaption>Photo: KUNDA DIXIT</figcaption></figure><img src="https://superdesk-pro-c.s3.amazonaws.com/sd-nepalitimes/20221110151116/636d088e9c7e80680e0a6023jpeg.jpg" alt="" width="451" height="400">Climate change, pollution, and lack of infrastructure restrict water access in Nepal. Madhav Belbase, retired Secretary of the Ministry of Water Supply, who pioneered inter-basin water transfer and was involved with <a href="https://archive.nepalitimes.com/page/melamchi-coming-to-kathmandu" target="_blank" rel="noopener noreferrer">the Melamchi Project</a>, speaks about water resource management in Nepal.Excerpts from interview:Nepali Times: Drawing on your vast experience in the water management sector, how do you think water is seen in Nepal?Madhav Belbase: There is a popular misconception among many Nepali people that Nepal is the second most water-rich country in the world. This is added to a narrative that if you have a resource in abundance, you do not need to manage it. But it’s not true.Discourses on water management in Nepal are dominated by hydropower production and often neglect the other uses of water. Water management lacks integration. Rivers in Nepal are often diverted at multiple points along their stretches, affecting the other existing and potential uses of water.Because of the hyper-focus on water for energy production, irrigation, water supply, the environment, and the cultural and social aspects of <a href="https://www.nepalitimes.com/banner/too-little-too-much-or-too-polluted/" target="_blank" rel="noopener noreferrer">water resources management</a> have been neglected. This wasn’t always the case. Nepal has a rich history of traditional water management techniques that took advantage of the country’s natural resources and topography. If energy is the focus of today’s water infrastructure, food production was the focus of these traditional systems, ensuring food security for decades. Unfortunately, such traditional knowledge has given way to a more technocratic approach that views water as a commodity.What is the long-term viability of the Melamchi Water Supply Project  considering the growing stress on freshwater supplies?<a style="font-size: 15px; letter-spacing: 0.01em;" href="https://www.nepalitimes.com/opinion/the-water-emergency/" target="_blank" rel="noopener noreferrer">Climate change</a> is already impacting rainfall patterns in Nepal. We used to have downpours in January and February, but now winter rainfall is becoming increasingly precarious. Even in the monsoon, rainfall patterns have completely changed. The intensity of precipitation is rising, which creates larger runoffs and landslides, and lower infiltration. At the same time, heavy downpours in the winter months seem to be disappearing, impacting on the distribution of water. Although the total amount of rain has not changed a lot, when we need water, we don’t have it. When the rain does come, we seem to be getting too much of it.The Melamchi Water Supply Project is meant to be a long-term solution to address water shortage in the Kathmandu Valley. However, <a href="https://www.nepalitimes.com/banner/drones-to-the-rescue-in-melamchi/" target="_blank" rel="noopener noreferrer">the Melamchi river</a> itself is snow-fed and may get less water due to climate change. But we can safeguard ourselves from the worst-case scenario through the development of water storage projects within or just outside the valley. Water storage projects and inter-basin water transfer projects can balance water availability. This can be done by transferring water from surfeit to deficit basins. Water storage can either be done through constructing large-scale reservoirs and dams, or small-scale ponds and household level reservoirs and even rainwater harvesting. Dams are critical for the long-term sustainability of water management and irrigation in Nepal.<figure><img src="https://superdesk-pro-c.s3.amazonaws.com/sd-nepalitimes/20221110151116/636d088f9c7e80680e0a6024jpeg.jpg" alt="" width="1920" height="1080"><figcaption>Photo: SAGLO SAMAJ</figcaption></figure>Was <a href="https://www.nepalitimes.com/banner/after-the-deluge-in-nepal/" target="_blank" rel="noopener noreferrer">the flood on the Melamchi in June</a> anticipated as a once-in-100 years type event?Yes, the headworks of the Melamchi project were designed with 100-year floods in mind. To ensure adequate protection, the project includes energy dissipation devices and safety mechanisms. The structures have been constructed to minimise abrasion due to flowing debris and bed loads. They are designed to withstand the worst possible events with a 100 year return period. However, an event can occur which is even more intense.What are Nepal’s opportunities and challenges for transboundary water cooperation with other riparian countries?About 40% of the annual flow and 70% of dry season flows of the Ganges in India originate from Nepal’s rivers. The Ganges basin is home to about 500 million people, which can in itself explain the importance of Nepal’s rivers for people living in northern India. Floods during the monsoon and a lack of adequate water for agriculture in the dry season are the two major issues there. Obviously, the construction of storage projects in Nepal’s territory to regulate river flow could solve both problems in India to a great extent. However, bilateral cooperation between the two countries has been a bit bumpy in the past. In the 1950s both countries signed two treaties on <a href="https://www.nepalitimes.com/banner/the-kosis-sorrow-and-scope/" target="_blank" rel="noopener noreferrer">the Kosi</a> and Gandaki which was greeted with huge dissatisfaction among Nepalis. The perception among Nepalis is that both the treaties yield fewer benefits in comparison to the problems they create for the residents of areas where infrastructure is constructed.Having said that, there are many opportunities for cooperation with India, but we must also safeguard Nepal’s interests. If reservoirs are to be built in Nepal to resolve the problems related to flood and water scarcity in the dry season, the pricing of the impounded water must be judicially determined for win-win cooperation between the two countries.China upstream also shares our rivers. Nepal’s main concern with Chinese water relations is the sharing of flood and rainfall data. Because precipitation and weather events in China affect Nepal’s rivers downstream, better cooperation is needed to properly manage transboundary water risks. This type of data sharing is already happening with India, which has a greater interest in being Nepal’s downstream neighbour.<figure><img src="https://superdesk-pro-c.s3.amazonaws.com/sd-nepalitimes/20221110151120/636d08929c7e80680e0a6025jpeg.jpg" alt="" width="1920" height="1080"><figcaption>Photo: SAGLO SAMAJ</figcaption></figure>Last month, China sent a warning that the Tama Kosi river was dammed due to a large landslide, upstream from the 465MW Upper Tama Kosi project. What are your thoughts on a single hydropower project having such a large proportion of the national hydropower generation?Firstly, given the geology and steep slopes of the mountain as well as intense rainfall that occurs in Nepal, the structures we build on the rivers <a href="https://www.nepalitimes.com/editorial/manpower-and-hydropower/" target="_blank" rel="noopener noreferrer">are always vulnerable</a>. It is often difficult to predict the worst-case scenario flood. There are computer models to estimate near to actual situations, however, how accurately we provide the input data largely determines how closely we can predict the flows. Due to climate change, this type of prediction has become more and more difficult. The Tama Kosi headworks are designed to weather a flood with a 1,000 year return period, including a glacial lake outburst flood, meaning the headworks are designed to withstand a flood so intense it is only predicted to occur once every 1,000 years. This level of risk planning is common practice, and would normally be safe for the typical worst-case conditions.Secondly, Nepal’s per capita electricity consumption is very low, about 300 kWh. As the country progresses, the per capita consumption grows, and you need to produce more electricity. In such a situation, a 456 MW project like Tamakoshi is not actually that big, and we will have similar projects distributed all over the country. However, for the present condition of the country, when a single project generates about one-third of electricity, there is always the risk of electricity shortages due to an unprecedented natural disaster in the Tama Kosi basin.What do you see as the most important issue that needs to be tackled when it comes to water management in Nepal?Water is a finite resource, and there is increasing stress on water resources. Our attitudes of abundance and overuse are risky, and we must uphold a sustainable limit to water uses to protect this precious resource for future generations. Nepal also needs to explore the possibilities of reusing and recycling water. Young people need to realise the need to limit water use as well as population growth to achieve an optimum sustainable level of consumption. Pollution of our available freshwater resources is another major issue that must be understood and addressed at the individual level.Experts from longer interview with the <a href="https://www.himalayanwaterproject.org/post/a-policy-perspective-on-water-management-in-nepal-interview-with-madhav-belbase" target="_blank" rel="noopener noreferrer" data-saferedirecturl="https://www.google.com/url?q=https://www.himalayanwaterproject.org/post/a-policy-perspective-on-water-management-in-nepal-interview-with-madhav-belbase&amp;source=gmail&amp;ust=1627356167931000&amp;usg=AFQjCNE-g4qtOraO59PQP3LQ5lp0VsP43g">Geopolitics and Ecology of Himalayan Water</a>.

Nepal needs to plan for plenty and scarcity of water

<figure><img width="1500" height="1000" src="https://superdesk-pro-c.s3.amazonaws.com/sd-nepalitimes/20221110121140/636ce3b99c7e80680e09666ejpeg.jpg" alt=""/><figcaption>Reservoir pond of the Pharping hydropower project 12 km south of Kathmandu Valley. Photo: ASMIT RAJBHANDARI</figcaption></figure>It was 6:30pm on 22 May 1911, and the sun had just set in Kathmandu when King Prithvi Bir Bikram Shah arrived at Tundikhel to turn on a switch to light Nepal’s first electric lamp.Nepal was the second country in Asia to install a hydroelectric power plant, commissioned by Prime Minister Chandra Shumsher Rana, who named the project after himself: Chandra Jyoti. Chandra Shumshere had visited England eight years previously, and this was part of his grand plan to modernise Nepal with technology.Besides electricity, he established Nepal’s first college, built metal suspension bridges all over the country, <a href="https://www.nepalitimes.com/banner/a-walk-back-in-time-chandragiri-hatiban/" target="_blank" rel="noopener noreferrer">commissioned a cargo ropeway from Kathmandu to the Tarai</a>. He sent architects to Europe, and engineers and horticulturists for training to Japan. <figure><img width="1500" height="1000" src="https://superdesk-pro-c.s3.amazonaws.com/sd-nepalitimes/20221110121140/636ce3bc9c7e80680e09666fjpeg.jpg" alt=""><figcaption>Rusted penstock pipe from the reservoir. Photos: RAMESH BHUSAL</figcaption></figure><figure><img width="1500" height="1000" src="https://superdesk-pro-c.s3.amazonaws.com/sd-nepalitimes/20221110121140/636ce3bf9c7e80680e096670jpeg.jpg" alt=""><figcaption>Raj Kumar Shrestha and Kanchha Balami live near the power plant. “Our parents told us not to touch the pipes,” says Kancha Balami. “Back then, there used to be a caretaker here who rode a horse and patrolled the compound day and night.” </figcaption></figure><figure><img width="1500" height="1000" src="https://superdesk-pro-c.s3.amazonaws.com/sd-nepalitimes/20221110121140/636ce3c39c7e80680e096671jpeg.jpg" alt=""><figcaption>A dilapidated rest house next to the power house.</figcaption></figure><figure><img width="1500" height="1000" src="https://superdesk-pro-c.s3.amazonaws.com/sd-nepalitimes/20221110121140/636ce3c69c7e80680e096672jpeg.jpg" alt=""><figcaption>Ram Hari Khatri of Sokhel village selling oranges from his house to the visitors who come to see the hydropower station</figcaption></figure>Construction of the 500kW plant in Pharping 12km south of Kathmandu began in 1907 with British engineers, and took four years to complete. All the turbines and penstock pipes were shipped to Calcutta, brought overland to Bhimphedi and then had to be carried on porter back over the mountains to the site.Built to light <a href="https://www.nepalitimes.com/here-now/inside-story-of-nepals-rana-dynasty/" target="_blank" rel="noopener noreferrer">the palaces of the Ranas</a>, homes of courtiers and some street lights, the power station stored water from two springs, in Satmule and Sesh Narayan, in a circular reservoir. The Ranas first tested the electricity in a house in Khokana before connecting the wires tot their palaces, to ensure it was safe.Under supervision of the prime minister’s clan, the power plant was built by Tilkikram and Bakhat Bahadur from the Nepal Army, the main engineer for the power house was Kishore Narsingh Rana. Two engineers from England, ‘Barnau Puwante’ and a certain ‘Mr Linzale’, were also involved in the construction. <figure><img width="1500" height="1000" src="https://superdesk-pro-c.s3.amazonaws.com/sd-nepalitimes/20221110121140/636ce3c99c7e80680e096673jpeg.jpg" alt=""><figcaption>The switchboard of the water supply system that currently feeds water to Lalitpur. Water from the reservoir that was used to generate electricity is now channeled for drinking water supply.</figcaption></figure><figure><img width="1500" height="1000" src="https://superdesk-pro-c.s3.amazonaws.com/sd-nepalitimes/20221110121140/636ce3cc9c7e80680e096674jpeg.jpg" alt=""><figcaption>Kumar Acharya, 55, is a guard with the NEA at the Pharping site. </figcaption></figure><figure><img width="1500" height="1000" src="https://superdesk-pro-c.s3.amazonaws.com/sd-nepalitimes/20221110121140/636ce3cf9c7e80680e096675jpeg.jpg" alt=""><figcaption>This abandoned guest house near the power station was used by the Ranas who visited the power plant occasionally for picnics and get-togethers. </figcaption></figure><figure><img width="1500" height="1000" src="https://superdesk-pro-c.s3.amazonaws.com/sd-nepalitimes/20221110121140/636ce3d29c7e80680e096676jpeg.jpg" alt=""><figcaption>The powerhouse of the Chandra Jyoti project is located above the Bagmati River in Pharping.</figcaption></figure>In 1911, it had been only three decades since the world’s first hydropower plant had been installed on the Fox River in Wisconsin in 1882, and a year after China built its first hydropower plant in 1912 in Yunnan province.Despite this early start, Nepal got around to setting up its second hydropower project only 28 years later, a 640kW plant in Sundarijal in 1939. For a country with such a vast potential for hydropower, it would take Nepal another half-century to produce just 1MW of electricity.Since 1911 when Pharping was built, Nepal has managed to produce only 1,400MW of power from its rivers, not even 2% of its total potential. Since most of the plants are of the run-of-the-river type, electricity production fluctuates with water level on rivers. This spring, due to a long winter drought, for instance, Nepal is importing nearly half its peak hour demand <a href="https://www.nepalitimes.com/from-the-nepali-press/more-than-half-of-nepals-electricity-imported-from-india/" target="_blank" rel="noopener noreferrer">from thermal power plants India</a>.Sadly, the history of Nepal’s oldest hydropower plant has now been almost forgotten. Although the government declared the power plant a ‘living heritage’ site in 1911, not much has been done to preserve the area. The power plant could be brought back into running condition, even as just a demonstration unit. <figure><img width="3000" height="2000" src="https://superdesk-pro-c.s3.amazonaws.com/sd-nepalitimes/20221110121140/636ce3d59c7e80680e096677jpeg.jpg" alt=""><figcaption>One of the generators and electrical equipment will be part of the exhibit at the museum. The other generator is not in operation, but will also be preserved for visitors.</figcaption></figure><figure><img width="1500" height="1000" src="https://superdesk-pro-c.s3.amazonaws.com/sd-nepalitimes/20221110121140/636ce3d99c7e80680e096678jpeg.jpg" alt=""><figcaption></figcaption></figure><figure><img width="1500" height="1000" src="https://superdesk-pro-c.s3.amazonaws.com/sd-nepalitimes/20221110121140/636ce3dc9c7e80680e096679jpeg.jpg" alt=""><figcaption>The first house in Khokana that was connected to electricity from Pharping. The Rana rulers first wanted to test whether it was safe to use the electricity before hooking up the wires in their palaces in Kathmandu. The house belongs to Madan Krishna Maharjan, and was damaged in the 2015 earthquake. A board above the door reads, 'Welcome to the Khokana Museum, this is the first house with elan electric light in Nepal.' </figcaption></figure>The power house, the royal guest house and other buildings here are part of Nepal’s heritage, but are crumbling. Two 250kw generators have great historical significance, but are not properly preserved, metal pipes more than 100 years old lie rusting near the <a href="https://archive.nepalitimes.com/regular-columns/Comment/storing-water-reservoir-Nepal,1042" target="_blank" rel="noopener noreferrer">reservoir</a>.For most of its functioning life, Pharping generated power for only three hours every night. Later, even when the reservoir started being used to supply drinking water to Lalitpur, it was generating electricity for one hour every evening.There is a masterplan to preserve Pharping as a Live Energy Museum with the old building renovated to house a centre for hydropower development, as well as research into <a href="https://www.nepalitimes.com/here-now/an-energy-windfall-for-nepal/" target="_blank" rel="noopener noreferrer">renewable energy sources like solar and wind</a>.None of that has taken off, but 22 May is still marked as National Energy Day to pay homage to Nepal’s hydropower potential.This story was first published on <a href="https://www.thethirdpole.net/en/" data-saferedirecturl="https://www.google.com/url?q=https://www.thethirdpole.net/en/&amp;source=gmail&amp;ust=1617686418226000&amp;usg=AFQjCNEYgYjTYeKkemPKVPByKGEFPQOeiQ">The Third Pole</a>.

Nepal’s 1st hydroelectric plant is a museum piece

<figure><img width="1777" height="1000" src="https://superdesk-pro-c.s3.amazonaws.com/sd-nepalitimes/2022111011114/636cccc99c7e80680e08bc40jpeg.jpg" alt=""/><figcaption>All photos: NABIN BARAL / www.thethirdpole.net</figcaption></figure>Plans to build Nepal’s biggest hydropower project was been delayed by politics and compensation issues for 10 years, but is now held up because the Chinese contractor is incommunicado.The 263-m high dam on the Budi Gandaki River will be the world’s tenth tallest, and impound a reservoir 45km long displacing 50,000 people, to generate 1.200MW of electricity. But the $2.5 billion project is in doubt because of delays and doubts about its viability.The project, situated 60km northwest of Kathmandu, was supposed to be completed by 2022. It had been cancelled and revived several times by successive governments, but has been stuck for the past year because of the pandemic.The China Gezhouba Group Corporation (CGGC) was awarded the main construction contract in 2018, but has not shown up for the past year.  “We have repeatedly tried to communicate with the company, but it has not responded clearly. We cannot say whether they are in or out, it is between somewhere and nowhere,” said Gokarna Raj Panta at the Ministry of Water Resources, Energy and Irrigation in Kathmandu.‘Between somewhere and nowhere’ is also a fitting description of the lives of the people of the Budi Gandaki Valley whose homes, farms and livelihoods will be submerged by what will be Nepal’s largest reservoir.  https://www.youtube.com/watch?v=F22pmtP1Q4M&amp;feature=youtu.beHowever, at the project office in Siurenitar near the proposed dam site there is frantic activity. Phones are ringing constantly, and staff are busy taking calls from those asking about their compensation claims.  “The first priority is land acquisition and we have already paid out Rs33 billion as compensation,” said Krishna Bahadur Karki who heads the project’s compensation and resettlement unit. Another Rs20 billion is earmarked for reimbursement for homes, livestock, trees and other assets.The government froze land dealings in 2013 along the valley, but in anticipation of jobs and economic activity new roads and towns have sprung up in a district tht has seen dramatic depopulation due to outmigration.Ghare Gurung runs a roadside metal workshop outlet 40km north of the dam site. He bought this small patch in Arkhet using money saved from working in Malaysia. He got Rs120,000 compensation for it.“Now they have been saying that a 10% depreciation cost would be applied for our infrastructure. If it happens, then I need to pay them instead of receiving money,” he said.Besides submergence of the main valley, the reservoir will put another 22km of land along the Aankhu Khola tributary under water.   <img width="1777" height="1000" src="https://superdesk-pro-c.s3.amazonaws.com/sd-nepalitimes/2022111011114/636ccccc9c7e80680e08bc41jpeg.jpg" alt=""><img width="1777" height="1000" src="https://superdesk-pro-c.s3.amazonaws.com/sd-nepalitimes/2022111011114/636cccd19c7e80680e08bc42jpeg.jpg" alt="">Gyanu Maya Shrestha sells snacks from a small stall by the Aankhu Khola in Hepne of Dhading district, and is worried about her future.  The April 2015 earthquake destroyed her home and her animal shed, killing her buffaloes, oxen, and goats. Before the quake, officials from the project had assessed both structures. “After the earthquake, they inspected it again, and now say they will reduce the compensation,” says Shrestha.The response from project officials was that the pre-earthquake inspection was for the environmental impact assessment (EIA) report, not compensation. While many other quake-hit communities have built new houses, people along these two rivers have not. Krishna Majhi lives in unregistered land at Gumti village, 10km from the proposed dam. In 2017, the government had agreed to compensate structures on unregistered land. Till now, no payments have been made.Krishna uses part of his earthquake-damaged house as a kitchen but has spent five years living in a makeshift structure. “Even a small earthquake would now be enough to kill us, and we cannot dismantle it because we need to show it to the project for compensation,” he said. <img width="1500" height="1000" src="https://superdesk-pro-c.s3.amazonaws.com/sd-nepalitimes/2022111011114/636cccd49c7e80680e08bc43jpeg.jpg" alt="">Many promises were made to locals to persuade them to hand over their land, including of resettlement. They were asked to fill forms saying where they wanted to be resettled and what facilities they needed. “We were told that new villages will be built in the slopes above the reservoir we would be provided all facilities. But we have heard nothing since, all these years they tricked us,” said Sushil Dharel, from Khahare on the Ankhu Khola.Back at the compensation office, Karki says he can understand the frustration of the people, but adds, “The compensation amount is many times higher than the government rates, and there are rules. There are also people who have received millions in compensation and bought houses in Kathmandu.”Indeed, while some have done well from compensation payouts, the majority are from poorer communities without political clout or access. They resent the way the authorities downplay their problems.“Our field is irrigable, there is a market nearby and we can produce three crops a year. I can’t buy a piece of land in the city with our project compensation, how do I make a living there?” asks Pampha Khadka from Khahare, bursting into tears.  Government officials in Kathmandu do not have any clearer answers on resettlement, but say the details need to be ironed out.“We have drafted a resettlement policy, but there isn’t clarity on the modality of project implementation. Unless it is finalised, resettlement is not possible,” said Gokarna Raj Panta at Nepal’s Ministry of Water Resources, Energyand Irrigation.Botched resettlement policies are not new in projects in Nepal. And in Budi Gandaki, too, there are problems. Some families have spent the money they got on parties, which means they will be homeless and landless if not resettled. Many have used payouts to meet their daily needs or pay debt, buy motorbikes or educate and marry off their children.“I received about Rs100,000 for a piece of land. I spent Rs10,000 on my grandchildren and sent Rs 80,000 to my daughter in Kathmandu for her studies,” said Purna Bahadur Ale Magar from Arkhet.According to the <a href="https://bghep.gov.np/images/category/EIA-Final-Report-2016.pdf" data-saferedirecturl="https://www.google.com/url?q=https://bghep.gov.np/images/category/EIA-Final-Report-2016.pdf&amp;source=gmail&amp;ust=1613840507629000&amp;usg=AFQjCNEZ6Lul1s1B_1d91EBJUQE6RtCeUA">environmental impact assessment</a>, the reservoir will submerge 2,400 hectares of forests with 3.5 million trees of 38 species. The forests are home to 19 mammal species, 9 reptiles and 54 birds. They include 15 protected species, and there are five fish species on the IUCN red list, whose habitat will disrupted.  There has not been much interest from environmental activists and civil society groups in Nepal.  “There was interest in the 1990s about the social and environmental costs of large hydro projects, but Budi Gandaki shows that there is no concern anymore,” says  water resource expert Ajaya Dixit.  There is also cultural impact. Much of life in rural Nepal revolves around rivers, which are considered holy. The Budi Gandaki reservoir will submerge 44  cremation sites, 74 religious and 29 places of historic and cultural importance.   <img width="1500" height="1000" src="https://superdesk-pro-c.s3.amazonaws.com/sd-nepalitimes/2022111011114/636cccd89c7e80680e08bc44jpeg.jpg" alt="">“Even if you raise genuine and serious concern, you are tagged as being anti-development. I think this has helped to instill fear at all levels and civil society has fallen prey to it,” he added.The project will also undermine the region’s achievements in forest conservation. Some 1,500 hectares of community forests managed by 62 communities will be impacted bny the reservoir. The Pashupati Community Forest in Majhitar is one of them, where locals are cutting trees before the waters start rising.About 200m above the riverbank, Suresh Shah pointed out freshly cut tree stumps. “When I try to stop them, they say why do you care about these trees, we have lost everything,” he said. “Feelings of ownership had helped conserve the forest, but that is gone now.”  Karki, the project office manager, was unable to answer any questions on environmental issues, and his engineer was equally at a loss. “This is an issue which will be dealt with when construction starts. We have not thought about it and have not been advised on how to deal with it,” Karki said.After the deadly flood on the Alkananda River in India this month that destroyed two hydro power projects and killed at least 100 people, concerns about the impact of the climate crisis also loom large. The Budi Gandaki watershed drains the eastern flanks of Himalchuli and Manaslu and the Ganesh Mssif to the east, which has many glacial lakes in danger of bursting.Experts say it is very risky to build such a large and expensive projects directly downstream from mountains that are melting rapidly due to the climate emergency.In Kathmandu, three successive governments in the last three years have made as many decisions to award or scrap the contract with China Gezhouba Group Corporation. After pre-feasibility study in 1984, the project was sidelined till 2006, when it was opened to international bidders. No expressions of interest were received.It was next revived in 2011, when Nepal’s power outages exceeded 12 hours per day. Once again, international companies showed no interest, so the government opted to make Budi Gandaki into a ‘national pride project’ – a development priority with a bigger budget from domestic resources.In 2016, the Belgian multinational <a href="https://tractebel-engie.com/en/the-history-of-tractebel" data-saferedirecturl="https://www.google.com/url?q=https://tractebel-engie.com/en/the-history-of-tractebel&amp;source=gmail&amp;ust=1613840507629000&amp;usg=AFQjCNH6UKIRE1xX87FdmFnCa5KUg3vVAw">Tractebel</a> completed a detailed design. The project was set to move ahead with local funds and management when China entered the picture in 2017.A few days before leaving office, the Maoist party Prime Minister Pushpa Kamal Dahal’s cabinet awarded the project to China Gezhouba Group Corporation, without any bidding.In November 2017, the incoming Nepali Congress-led government promptly scrapped the contract stating irregularities and lack of transparency. A court action followed. Nepal got another new government four months later, and K P Oli became prime minister who returned the project to China Gezhouba in September 2018.Now the problem is that China Gezhouba is showing little interest and failing to respond to Nepali government requests for information.“It's not that Chinese are less interested now. They are just waiting for a favourable time as there is political chaos in the country,”said Nepali hydro-economist <a href="https://www.researchgate.net/publication/327182585_Power_Paradox_Growth_of_the_Hydro_Sector_in_Nepal" data-saferedirecturl="https://www.google.com/url?q=https://www.researchgate.net/publication/327182585_Power_Paradox_Growth_of_the_Hydro_Sector_in_Nepal&amp;source=gmail&amp;ust=1613840507629000&amp;usg=AFQjCNFUZgWsCJNS8MFxLk3h6ib6tsjtCw">Ratna Sansar Shrestha.</a> In his view, China’s interest in Nepali hydro projects is limited to making money from construction contracts. “India has more interest in Nepal's water as it depends on water that flows from the mountains for irrigating vast swathes of land in the Gangetic plains,” Shrestha explained.   <img width="1778" height="1000" src="https://superdesk-pro-c.s3.amazonaws.com/sd-nepalitimes/2022111011114/636cccdb9c7e80680e08bc45jpeg.jpg" alt="">Geopolitical friction The Budi Gandaki feeds into the Gandaki, one of Nepal’s four main rivers. It flows into India’s Bihar state and eventually empties into the Ganges.  Nepal and India signed the 1959 <a href="https://www.moewri.gov.np/storage/listies/May2020/aggrement-on-nepal-and-india-gandak-river-1959.pdf" data-saferedirecturl="https://www.google.com/url?q=https://www.moewri.gov.np/storage/listies/May2020/aggrement-on-nepal-and-india-gandak-river-1959.pdf&amp;source=gmail&amp;ust=1613840507629000&amp;usg=AFQjCNFnWToLZflbwMZONfOd4NCCvNXDzA">Gandak Treaty</a>, which bars Nepal from upstream activities that would impact water flow in Bihar, where millions of hectares of farmland depend on waters from the Gandak (as Gandaki is known in India). However, China’s growing influence in Nepal as the largest provider of foreign direct investment could lead to geopolitical friction, according to a <a href="https://asiafoundation.org/2018/08/15/the-price-of-power-the-political-economy-of-electricity-trade-and-hydropower-in-eastern-south-asia/" data-saferedirecturl="https://www.google.com/url?q=https://asiafoundation.org/2018/08/15/the-price-of-power-the-political-economy-of-electricity-trade-and-hydropower-in-eastern-south-asia/&amp;source=gmail&amp;ust=1613840507629000&amp;usg=AFQjCNGJXMeATWXJ7aUlNj-_Ex9ogLOAGw">2018 report by the Asia Society</a>. Chinese firms recently built two other hydro projects in Nepal at Upper Marsyangdi A and Upper Madi, with a combined capacity of 75 MW. But both are run-of-the-river schemes, unlike Budi Gandaki which would be a gigantic reservoir. Indian state owned and private firms have not built a power project in Nepal since the mid-1980s, although one is involved in large projects on the Arun River. However, India is promoting cross-border trade in electricity as part of the nascent BBNI (Bangladesh, Bhutan, India, Nepal) regional sub-group in its sphere of influence. Both Nepal and Bhutan have objected to the Indian power ministry’s statement in December 2016 that electricity was a ‘strategic commodity’ so non-BBNI foreign powers could not be involved in the supply chain.    Shrestha says India is not concerned about China’s involvement in the Budi Gandaki project, whose power is solely for domestic use, and it views the reservoir positively.  “In general, India is not happy with Chinese companies being involved in Nepal's hydropower, but in Budi Gandaki they are more than happy as India would get lean-season augmented flow for free,” he added.   India had said it was not interested in investing in or building the Budi Gandaki project, and withdrew from bilateral talks in the late 90s. Another water expert, Dipak Gyawali says that the irrigation aspect has been completely ignored in designing Budi Gandaki.   Gyawali headed a review committee formed by the government to look at the design, and says: “About 100,000 hectares of land in Nawalparasi and Chitwan districts downstream could have benefitted in Nepal. The water that flows in dry months from the reservoir is not flowing water, it's produced by submerging our land and through our investment. If India uses this water then we should get financial returns.” Another problem Gyawali sees in this project is that it is located close to the epicenter of the 2015 earthquake and may not be able to withstand a future megaquake. “For a seismically active region like Nepal, rock filled dams are better than concrete double arch dams as proposed on the design,” he said. But Laxmi Devkota, the former Chair of the Budi Gandaki Development Committee, claimed that it has been designed with a serious consideration for earthquake impacts and is within international seismic resistance parameters. The many delays risk making the Budi Gandaki project financially unviable. Costs are plummeting for other renewables, such as solar and wind power, and emerging hydrogen energy technology. According to the Asia Foundation <a href="https://asiafoundation.org/publication/the-price-of-power/" data-saferedirecturl="https://www.google.com/url?q=https://asiafoundation.org/publication/the-price-of-power/&amp;source=gmail&amp;ust=1613840507629000&amp;usg=AFQjCNHA-718IXF7L4V8YODxQxVtc-crlA"> report</a>, solar electricity tariffs in Rajasthan, India, fell from more than 19 cents per unit in 2010 to 3.6 cents, and wind energy was  around 3.7 cents. Nepal’s hydropower costs 7 cents per unit to produce. India, which is Nepal’s expected energy export market, is ramping up renewable energy capacity fast with 37 gigawatts of solar and 38 gigawatts in wind by 2020. However, Budi Gandaki’s output is planned for domestic use so need not compete directly in the regional market. Nonetheless, the technical costs are making its value questionable, even for domestic use. “If we can develop this project within five years then we will definitely save some money, but if it is the next 20 years then it would be a hotpot of corruption for politicians and bureaucrats. It looks like this project is losing its technical strength in terms of cost already,” said Dipendra Bhattarai, an energy expert. <a href="https://www.thethirdpole.net/2019/04/09/nepals-hydropower/" data-saferedirecturl="https://www.google.com/url?q=https://www.thethirdpole.net/2019/04/09/nepals-hydropower/&amp;source=gmail&amp;ust=1613840507629000&amp;usg=AFQjCNG8pzipmFIljVwAHCiTObtvXl5OUg">Who will buy Nepal’s hydropower?</a> Finally, the daily power cuts that drove Nepal's policymakers to revive the project in 2011 have ceased.  Nepal doubled its electricity production from 700MW in 2010 to 1400 MW in 2014. Another 700MW is likely to be added in the next couple of years. However, Nepal has been importing about 600 megawatts from India in the dry, winter months (November to April) to meet peak demand as the smaller run-of-the-river projects struggle when water levels are low-- one motivation to build a big reservoir.  The Budi Gandaki hydropower plant should have been completed by 2022. In 2015, the project cost was estimated at 2.5 billion— more than one fourth of Nepal’s total budget that year. Says Laxmi Devkota of the project: “We have already lost about half a billion dollars in the last four years if we consider just 10% inflation rate. Another one and half billion dollars could have been gained by selling electricity in the four years that were delayed. We are already on loss at total project cost amount.”  The story was first published on <a href="https://www.thethirdpole.net/en/">The Third Pole</a>. Accompanying video by Nabin Baral.

hydropower