‘Fickle policy holding back hydro sector’Independent power producers have blamed inconsistent government policy for the country’s failure to tap its immense hydropower potential.
Independent power producers have blamed inconsistent government policy for the country’s failure to tap its immense hydropower potential.
Speaking at an interaction programme organised by the Society of Economic Journalists (Sejon) on Friday, developers of privately owned hydropower projects said policy changes with every change in government had spread confusion among hydropower developers.
“If the incoming government gives continuity to the previous government’s policy instead of coming out with new rules, it will be better for the energy sector,” said Shailendra Guragain, president of the Independent Power Producers’ Association of Nepal. “The trend of making new and unrealistic declarations by the energy minister after assuming office will not help the sector.”
Guragain was referring to the announcement by newly appointed Energy Minister Barsha Man Pun that a new policy would be unveiled to increase domestic electricity demand to 10,000 MW in 10 years. “If the new administration sticks to the plans made by the previous government, the country will see significant progress in the area of hydropower development,” he said.
Before him, former energy minister Janardan Sharma in the Pushpa Kamal Dahal administration had declared that 17,000 MW of hydroelectricity would be produced within seven years. Similarly, the CPN-UML and the Maoist Centre in their joint election manifesto had proclaimed that they would produce 15,000 MW of hydropower in the next 10 years.
Energy Minister Pun defended his statement saying that it was intended to assure potential power developers about domestic electricity demand.
“Instead of making declarations to increase electricity generation, the government will focus on increasing domestic demand for electricity,” said Pun. “The government will ensure the development of an adequate distribution network including the construction of new transmission lines and substations and other infrastructure to ensure increased demand for electricity.”
Currently, peak hour power demand is less than 1,400 MW, and most of the energy is consumed by private households. “In order to achieve economic prosperity led by the development of hydropower, we have to increase domestic demand by getting the industrial sector to consume more electricity,” said Pun.
According to the Nepal Electricity Authority (NEA), industrial consumption accounts for only 8 percent of the total electricity supply in the country while energy consumption of private households stands at 80 percent.
The state-owned power utility has been repeatedly pointing out that domestic demand for electricity needs to be increased as Nepal will be in a state of energy surplus within a few years.
After the 456 MW Upper Tamakoshi Hydropower Project comes online this year, the country will have surplus energy at least during the wet season.