Until last year, the Nepal Electricity Authority had planned a 400kV substation at Ratmate in Nuwakot district for the proposed Nepal-China cross-border transmission line. But a few months ago, the state-owned power utility decided to establish a separate substation in Trishuli Bazaar, near the site of Trishuli Hydropower Project, for the same cross-border connectivity purpose.

The decision is believed to have stemmed from the fact that the earlier substation, to be built at Ratmate, was under the Millennium Challenge Corporation grant, a $500-million aid from the United States for the Electricity Transmission Project (ETP) and Transportation Project.

The transmission project has five components—one segment starting from the northeast of Kathmandu at Lapsephedi, extending to the west of Kathmandu near Ratmate; a second segment from Ratmate to the industrial town of Hetauda located south of Kathmandu; a third segment from Ratmate to Damauli in the west; a fourth segment from Damauli to Butwal in the southwest; and a fifth segment from Butwal to the Indian border which is part of the cross-border transmission line.

The US grant, however, has run into controversy in Nepal, with a strong lobby group, comprising some influential politicians and independent individuals, making a pitch against it saying it is tied to the Indo-Pacific Strategy, which is aimed at countervailing China.

The MCC grant is yet to be ratified by Nepal’s Parliament, a prerequisite for its implementation.

“One of the main reasons we chose to set up a separate substation for the Nepal-China cross-border transmission line is that there is no clarity yet on MCC implementation given the controversy surrounding it,” said Dirghayu Kumar Shrestha, chief of the transmission directorate at the Nepal Electricity Authority, the state-owned power utility. “A separate substation would mean the Nepal-China cross-border transmission line would not necessarily connect with the Ratmate substation to be built under the MCC, thereby helping steer clear of any geopolitical risks.”

The Galchhi-Rasuwagadhi-Kerung transmission line is the first such connectivity project between Nepal and China. Both the countries had in 2018 formed a technical team to expedite the construction of the transmission line.

The Nepal Electricity Authority plans to set up the substation on the land of the Trishuli Hydropower Project, an undertaking of the state-owned power utility.

According to officials, survey and demarcation for the proposed Trishuli substation area have been completed and the detailed design works are being carried out.

“We are currently testing the soil in the area where the substation will be set up,” said Shrestha.

A separate substation to avoid any geopolitical fallout, however, could lead to spending of a substantial amount of money on a new substation, as one was already being planned.

Khadga Bahadur Bisht, member-secretary at the Millennium Challenge Account, Nepal, a special purpose vehicle formed to implement the MCC, said that he was unaware that any geopolitical factor guided the Nepal Electricity Authority to establish a separate substation in Trishuli for the Nepal-China cross-border transmission line.

“I don’t think there is any risk to the Nepal-China cross-border transmission line if the substation at Ratmate is used. I think the authority will handle both substations. The one built under the MCC will be handed over to the Nepal Electricity Authority anyway.”

Eventually, according to Bisht, the two substations will complement each other.

According to him, the Millennium Challenge Account is preparing to acquire land for the transmission line project and has prepared documents to issue tender for the construction of the substation and transmission lines.

It, however, has already completed the land acquisition process for the Ratmate substation.

Once completed, the transmission line could be immensely helpful for Nepal to sell surplus energy to China. Officials at the authority say that the separate substation in Trishuli would ensure an uninterrupted power supply through the Nepal-China cross-border transmission line.

“This will open new avenues in terms of the electricity market in Nepal as the rising demand for electricity shall be fulfilled by importing from China when needed and to export surplus energy after a few years in the near future,” the power utility body said in its recent Annual Report 2020-21.

According to the report, as of July 2021, the detailed survey works for the project are being carried out and the final report of Phase-I (transmission line) and draft report of Phase-II (substation) have been prepared.

A new route alignment of the transmission line has been optimised as per the Geological Information System, which means the new alignment would be shorter and construction costs would come down by Rs1 billion.

“A field survey is underway,” said Shrestha.

The proposed new alignment would however go through the Langtang National Park and getting forest clearance could be problematic. According to the authority, a load flow analysis on the Nepali side of the transmission line has been conducted.

The forecasted power capacity and energy balance report of the Integrated Nepal Power System has been sent to the State Grid Corporation of China, Beijing, which is the Nepal Electricity Authority’s counterpart in building the transmission line. A similar report of the Tibet Electric Grid has also been received which is necessary for future cross-border power supply, according to officials at the authority.

As the country aims to boost domestic electricity consumption by improving availability of energy, increase investment through reliable power supply and maximise government revenues, by exporting surplus electricity, authorities need to be careful about its plans getting affected by geopolitical factors, observers say.

Shankar Sharma, a former vice-chairperson at the National Planning Commission, says geopolitical influence on the implementation of development projects cannot be ruled out but foreign resources should be mobilized based on national priorities.

“The issue of a new substation alone does not prove that geopolitics has played a greater role in shaping our development priorities,” he said. “We have to avoid the influence of foreign countries in determining our priorities.”

The government has kept the construction of transmission projects on high priority amid risk of power wastage, as Nepal looks set to have surplus energy.

The transmission lines and substations to be built under the MCC will also facilitate Nepal’s planned India interconnection—from Butwal to Gorakhpur, India.

But the implementation of the projects under the MCC as well as Nepal-China cross-border transmission line is still a long way to go.

An official at the authority said that the power utility would not accelerate the work on the substation at Trishuli immediately as it wants to be sure whether the cross-border transmission line moves forward on both sides of the border.

The MCC on the other hand remains stuck in Parliament. The current dispensation in Kathmandu led by Nepali Congress’ Sher Bahadur Deuba, however, is keen on getting the MCC through the House.

Kul Man Ghising, who returned to the Nepal Electricity Authority as the managing director earlier this month, replacing Hitendra Man Shakya, said he was not aware of why the new substation was planned in Trishuli.

“I have to take a briefing before I could make a statement on the matter,” Ghising told the Post.

He said the planned substation could be to connect the several hydropower projects along the Trishuli river with the Ratmate substation

“But I can say for sure only after I inquire about this,” said Ghising, who was appointed managing director for a second time on August 11 after serving from September 2016 to September 2020. “There was no plan to set up a substation in Trishuli when I was leading the Nepal Electricity Authority last time.”

Asked if geopolitical factors could be the reason for building a separate substation, Ghising said, “I am not sure about any such thing.”

The Post’s repeated attempts to speak with Shakya, the erstwhile managing director at the state-owned power utility, went unanswered.