Nepal at loss over use of likely power surplus

KATHMANDU, MAR 25 -

Nepal is likely to have an energy surplus during the rainy season after 2017 with the completion of a number of major power projects, but it has no plans about what to do with all the extra electricity .

The Nepal Electricity Authority (NEA) has said that after the 456 MW Upper Tamakoshi, Upper Trishuli 3A, 14 MW Kulekhani III, 30 MW Chamelia and a few private sector power projects are finished, energy production during the rainy season will exceed demand.

Currently, peak hour demand for electricity in the country stands at 1,150 MW, which is expected to swell to 1,640 MW by mid-July 2017, said the NEA. The Upper Tamakoshi is expected to be completed at about the same time. Chamelia, Kulekhani III and Upper Tamakoshi are all expected to be completed before that date.

NEA officials said that at that time, while the available power could be adequate during the evening peak hour, much of the energy output in the daytime would be wasted as there is no proper mechanism to use it. Against this backdrop, NEA Managing Director Arjun Karki said on Monday that the country’s having no plan for such an eventuality was pathetic.

Signing a power trading agreement with India is expected to help in this regard as it would allow the trading of power like other commodities. However, bilateral talks on the matter have not advanced at all.

Seeing the possibility of a power surplus in a few years’ time, the NEA has been reluctant to sign new power purchase agreements (PPA) with private sector developers.

PPAs for a number of projects having a combined capacity of around 4,000 MW are yet to be signed.

Meanwhile, the NEA has not been able to construct transmission lines because of problems like land acquisition and obstructions by locals and government authorities such as the Ministry of Forest due to environmental and wildlife conservation concerns.

“Despite an adequate budget for erecting transmission lines, they have been unable to construct them due to numerous problems including land acquisition,” said Karki at a programme entitled National Dialogue in Power Sector Reform in NepalThe government has allocated a budget of Rs 14 billion

this fiscal year for transmission lines. The NEA chief said that the NEA was in the process of upgrading transmissions lines on different corridors from eastern to western Nepal.

While institutions like the World Bank have put a condition that the NEA should be unbundled before they will invest their money, Karki said that the power utility would unbundle itself within a few years as it has been engaged in so many tasks.

Stressing the need to unbundle the NEA, Chief Secretary Lilamani Poudel said that there should be separate company to construct transmission lines.

“Lack of transmission lines has been a major stumbling block for the development of hydropower by both the NEA and independent power producers,” he said.

Meanwhile, Khadga Bisht, president of the Independent Power Producers’ Association Nepal (IPPAN), said the power sector had a distorted market price situation due to the existence of a single buyer and multiple sellers.

Currently, there is only the NEA that distributes electricity by producing it and purchasing it from the private sector. He also stressed the need for an early introduction of the Electricity Act which is pending at Parliament.

Energy Minister Radha Kumari Gyawali said that she would make efforts to introduce the Electricity Act soon.

Source: The Kathmandu Post