Sparks in the darkNepal’s energy insecurity grows despite its huge potential for self-sufficiency
Nepal Electricity Authority (NEA) has imposed 91 hours of power cuts a week—13 hours a day. This is likely to become worse in the next few weeks. This is a familiar story between November and March every year when the water flow in the rivers diminishes, resulting in a decrease in production in our run-of-the-river hydro projects by almost half. Add to this the annual increase in power demand by over 20 percent. NEA has been trying to import 80 MW of additional power from India. In the fiscal year 2014/15, Nepal’s import from India rose by 24 percent amounting to Rs 10 billion. At this rate, by 2017, Nepal is likely to import as much as 1,000 MW from India, more than Nepal currently generates. That will increase the total electricity bill from India to almost Rs 50 billion.
Nepal lost more than a decade in civil conflict and political instability. As a result, power production was overlooked and for a good part of a decade, no major project came online. This created a gap in supply that the country has not been able to bridge so far. Several projects were scheduled to be completed this year, but due to the earthquake and the subsequent blockade, the completion dates for these projects have been pushed.
Despite so much hydro potential, the failure to harness it points to an absence of a clear energy security strategy. As the recent blockade has highlighted, over-reliance on neighbouring countries for essential commodities is dangerous. Clearly the government needs to articulate a long-term energy policy that reduces our dependence on other countries. Much of the hydro discussion in Nepal has for long centered around exports. A study commissioned by Nepal Investment Board sees the potential to export 2,000 to 3,000 MW of hydroelectricity to the Indian power market per day by 2022, and up to 18,000 MW by 2031. But experts say there is a critical window of five to six years for Nepal to go all out in generating additional power.
Once India moves to nuclear and thermal power, imports from Nepal may become more expensive and thus less economically viable. Many see viability concerns behind the decision of Statkraft, the Norwegian power company, to pull out in early January from Tamakoshi III, a 650-MW project that was to be built for export.
Discussion also needs to take place on how much of our hydro potential will be consumed domestically if we were to become an industrial country with a carbon neutral economy. The government’s decision to declare an energy emergency is a welcome step so long as it is not limited to rhetoric like the last two times.