Gazing at the nub of Hydropower

Hydropower acts as a principal indicator of creating jobs and transferring technology to achieve inclusive sustainable development in the nation. Looking at the brighter side, it concurs that Nepal is economically viable for hydropower generation and aims to achieve the domestic demand for power supply at a low cost.

According to the Nepal Electricity Authority (NEA), there are 88 hydropower plants in operation with a total generating capacity of 967.85 MW. Consequently, most of the hydropower plants are run off the river. Considering the fact that it is difficult to curb population growth, the overall electricity supply should be increased to meet the targets of economic development. Data from NEA indicates that the electricity demand could reach 22/7 TWh by 2030. To meet the demands NEA and its subordinate companies are constructing several projects, Chameliya, Kulekhani-3, Upper Trishuli A, Upper Sanjen and Tanahu Hydro, and many more. Thereby, it states that electricity will substitute more and other forms of energy.

Similarly, the national budget for the fiscal year 2018/19 vows 2018-2028 as Energy Decade. The budget of the fiscal year 2018/19 gave emphasis to the hydroelectricity expansion with a motive to cater electricity throughout the nation. As per the budget report, the government allocates Rs.83.9 billion for the energy sector. Further, the budget administers Rs.5 billion to expedite the rural electrification program. The budget has focused on the development of the energy sector by executing plentiful hydropower projects and expanding transmission lines. The Electricity Demand Forecast Report (2015-2040) projects that by 2040, the industry and manufacturing sector will hold the highest demand for electricity, which is 15320 GWh and 14944 GWh respectively.

Despite the abundant possibility, hydropower generation is not harnessed to the desired amplitude. As the hydropower sector is in need of a more comprehensive policy let us look at the existing hurdles.

Existing Barriers:

• The technical constraint is considered one of the major issues in hydropower development in the nation. Further, inadequate transmission lines aggravate the issue.
• Policy inconsistency is one of the major constraints obstructing the pathway of hydropower progress. There is inconsistency among various hydropower policies. For instance, NEA doesn’t have any control over tariffs due to which it incurs hefty losses every year. The tariff fixation committee needs to balance the tariff rate with the growing population of the nation. Furthermore, the tariff rate offered to the private sector was low as a result the investors chose to avoid the risk.
• The decade-long arm insurgency and difficulty of trade negotiations with India led to moderate the spirit. The Nepali-owned company or the foreign company is still baffled about selling electricity on the regional market. Concerning the existing political instability, this might be the reason for the investors not vesting their hearts and soul in the hydropower project.
• Managing the supply of electricity is a sturdy task because the demand and supply are highly inelastic. Nepal’s electricity comes from the run of the river, therefore, the nation falls short due to a lack of diversification of the power sources.
• Another major bump for hydropower development is the likelihood of natural catastrophes. Landslides and outbursts flood another plump for hydropower development in the nation. Generically, hydropower stations are located which are susceptible to frequent landslides and the intensity is high during the monsoon season. As a result, hydropower in Nepal faces an increased risk of Glacial Lake Outburst Flooding.

Despite the discrepancies, hydropower holds the potential for uplifting the lives of people.

Vanquishing the challenges

Nepal must find appropriate ways to accumulate a large amount of investment for hydropower production. The public-private partnership would be the best way to create a conducive environment for hydropower investment. In fact, the investment policy of Nepal should encourage foreign investors to invest in Nepal.

• One of the perfect examples of a public-private partnership is the Chilime hydropower project. Chilime hydropower project is also a subsidiary company of NEA. The bulk of the share goes to NEA which is 51%, while 14% has been diffused to the general public, 25% is owned by staff of the company whereas the locals of the region retain 10%. So, this framed a foundation for the investors to flip their money into the hydropower business.
• Correspondingly, the Investment Board Nepal should work to initiate policy reforms and facilitate the provision. In fact, Nepali hydropower firms should be nurtured so that they can provide energy for the peak load demand of the nation. Nevertheless, this will create ample opportunity for the public to access the reservoir and invest in equity shares. Besides, producing its own source of energy, will make the nation reliant and resilient to its values and aspirations. Thereby, Nepal needs to incorporate prodigious steps to rationalize the framework of energy planning.
• Similarly, planners and investors should carry out risk assessment projects to unravel the issues of GLOF.

A possible benefit from Hydropower Surplus

·       Increase in the export market:

After the significant contribution of Kulman Ghising and the NEA fraternity, load shedding now remains a ghost story. If Nepal continues to thrive, in in-house electricity generation, certainly India can be a potential market to expand the business. Nepal will actually occupy the leverage to export electricity and contribute to lessening the burden of the national debt.

Besides, Nepal can have the upper hand in regulating the trade of hydroelectricity. Thus, this will create tremendous opportunities for potential market, entrepreneurs to boom in their local market. Moreover, electricity export can be one of the finest commodities to be traded for generating revenue in the nation. The nation can witness a major paradigm shift in the consumption of electrical commodities replacing fossil fuel-based products.

Conclusion

It has been a decade since the country has been declared a federal republic and the government still finds it arduous to accept the nuances of federalism. Overridden by the subtlety of power and authority, the three tiers of government can take a few more years to execute the development plan. At the helm of many things happening in the nation, the government faces absolute perplexity to adjust mutual accountability and alignment within the political entities. Therefore, the government, NEA, and Independent power producers should bear the responsibility for the trading of electric power across the nation and cross-border market.

Thus, hydro projects in Nepal demand in-depth research and analysis. In addition, hydro projects need to be regulated by efficient management teams. Application of the public-private partnership model in medium-scale hydro projects would anchorage the hydro potential of the nation.