Hydropower export cannot reduce trade deficit: Experts

KATHMANDU, July 30 :

Experts have warned against export of hydropower to reduce burgeoning trade deficit with India. Instead, they have urged the government to prioritize electricity consumption through industrialization and replacement of petroleum products used to generate electricity.

Nepal imported goods and services amounting to Rs 434 billion from India in the first 11 months of 2013/14. The country could export goods and services worth only around Rs 54 billion in the review period.“

"Export of electricity might reduce trade deficit but won´t create jobs. Therefore the priority should be on promotion of industrial sector to consume power generated in the country for creating jobs and reaping other economic benefit”," former commerce secretary Purushottam Ojha said“ "Priority should be given to industries that produce export commoditie”."

Former energy secretary Dwarika Nath Dhungel said reducing trade deficit by exporting electricity is nothing more than a pipedream.

Referring to Indian leaders´ statement that Nepal can export electricity to reduce trade deficit, Dhungel argued that the southern neighbor wants to develop mega projects like Karnali Chisapani and Saptakoshi High Dam Multipurpose Project in the name of generating energy but using water resources for their own benefits“ "Therefore, Nepal should harness hydropower on its own and bring foreign investment in sectors like tourism and manufacturing where it has comparative advantag”," Dhungel said, adding that Nepal should not look only to hydropower to reduce trade deficit.

With generation of sufficient energy, Nepal can reduce trade deficit by Rs 26 billion spent to import petroleum products for generators annually.“

"We can also cut import of LPG used for cooking by providing electricity at reasonable pri”e," Ojha said.
Nepal imports LPG amounting to Rs 23 billion annually.

Prof Amrit Man Nakarmi said priority should be given to increase per capita electricity consumption which stands at 93 units, the lowest in South Asia, instead of exporting electricity.

Nakarmi is associated with Center for Energy Studies at the Institute of Engineerin“. "Only a good policy intervention like massive electrification drive can increase per capita electricity consumption to 280 units by 2020. And the country needs a total of 4,400 MW to achieve the targ”t," added Nakarmi.

Nakarmi has strong reservation over Nepal Electricity Authority´s demand forecast which says Nepal will be in energy surplus situation after Upper Tamakoshi and other projects start generation in 2016/17.“

"Instead of selling energy, we should appeal people to use electricity for cooking purpose and reduce LPG impo”t," Nakarmi said, adding that generation of additional 700 MW can replace LPG import.

However, President of Independent Power Producers´ Association Nepal Khadga Bahadur Bisht argued that Power Trade Agreement with India, which is under discussion, is important to manage seasonal imbalanc“. "It will also be important to bring foreign investment in hydropower sector as the agreement assures Indian market for energy generated in Nep”l," he added.

PTA should not limit energy trading to few players: IPPAN

Nepali private sector has said that the Power Trading Agreement (PTA) with India should not limit energy trading to only a handful of players.

Welcoming the formation of a joint panel, representing three political parties, to devise the contents of PTA, Independent Power Producers´ Association, Nepal (IPPAN) said the government, Indian companies and third country developer should also be allowed to export energy to India without any hindrance.

Speaking at a press meet organized in Kathmandu on Wednesday to share its view on PTA, IPPAN President Khadga Bahadur Bisht said there should not be a single nodal agency to export energ“. "If such nodal agency has to be created, it should be done in a competitive manner. But there should be a regulating body representing both the countries to institutionalize electricity tradi”g," he added.

IPPAN also has advised to the government to let the market decide the electricity pric“. "There should be no tariff, fee, tax, quota and licenses on export of hydropower from Nep”l," IPPAN said in a statement.

The association also said cross-country transmission lines should be constructed jointly by the both the countries. The first such line is being developed jointly by both the countries.

IPPAN, however, has clearly said that PTA should deal only on power trading issue“. "It should not cover other issues related to energy developme”t," it added.

Source: Republica