The devastating earthquake of April 25 badly hit the country’s power sector. While power lines were cut off following the earthquake, restoration was quick in the capital city, with certain areas having electricity restored within a few days.
Solar Energy: With no connection to the national grid, solar power proved to be pivotal during this time of crisis. It was particularly helpful in charging phones and ensuring connectivity not only locally but also globally. With the earthquake originating primarily in rural areas, and widespread destruction of villages and homes, the demand emerged not only for solar lamps, but also for solar systems to help charge phones to maintain connectivity. Small Solar Home Systems which are 10 watt solar systems that provide three light bulbs and two USB ports to charge devices, and operate for up to eight hours have been particularly in demand. A few organizations are also working towards developing solar generated community energy points, whereby up to 10 households can share a more powerful solar system.
Hydropower Damages: According to Independent Power Producers Association of Nepal and Nepal Electricity Authority, the earthquake triggered rockfall and landslides in various areas which damaged up to 23 hydropower projects with an installed capacity of up to 176.88 MW, which acts as a significant blow to the country’s power generation capacities. Of the projects that sustained damages, eight with an installed capacity of 41.86 MW have resumed operations after repairs. While certain projects can be brought into operation after some maintenance work, others require more intensive repair.
Increased Costs: The damage to operational hydropower plants as well as projects under development has shaken investor confidence, as these projects have had to suspend power generation thereby losing its income sources until repair and maintenance is concluded. This makes it difficult to pay back bank installments. The cost of new hydropower projects is now expected to rise with Nepal open to high natural calamity risk in addition to political risk. Additionally risk premium is likely to rise with investors and insurance agents getting more cautious.
Outlook: The damages sustained by the energy sector is likely to hamper rebuilding efforts, and increases in cost of energy is also unlikely to help. Areas such as Sindhupalchowk, where transmission lines have been cut off will be particularly affected. The use of interim diesel plants for the reconstruction process. Meanwhile, geological studies and surveys which are currently constrained only to licensed areas of hydropower development also need to be expanded.