The government has planned to declare a state of energy crisis in mid-January, and accordingly the Ministry of Energy (MoE) has formed six taskforces to study and recommend a course of action to deal with the crisis. Based on their recommendations, the government will prepare a bill to address the problems impeding the development of energy projects.

MoE Joint Secretary Sanjaya Sharma is heading the taskforce assigned to look after grid solar and the power purchase agreement (PPA) rate as well as power trade. Another Joint Secretary Samir Ratna Shakya has been named

as the head of the taskforce in charge of hydro bonds and project prioritization and investment management.

Director General of the Department of Electricity Development (DoED) Dinesh Ghimire has been given the responsibility of coordinating the taskforce dealing with institutional reform that also covers the issue of licensing hydropower projects and structural reforms.

Deputy Director General of the DoED Nabin Raj Singh will study and recommend measures related to forest and environmental clearance, land acquisition, social issuance and issuance of shares to locals.

Likewise, Deputy Managing Director of the Nepal Electricity Authority (NEA) Ram Chandra Pandey heads the taskforce that will recommend policy measures on electricity distribution management and reforms. Another Deputy Managing Director of the NEA Surendra Raj Bhandari has been tasked to look into procurement issues and managerial reform.

“The taskforces have also incorporated other government agencies such as the Investment Board of Nepal and university scholars,” said Gokarna Raj Pantha, assistant spokesperson at the MoE. “These taskforces will identify the problems and recommend measures to be taken during the crisis period.” According to ministry officials, the taskforces have been given two weeks to submit their reports.

With the country facing a severe energy crisis due to lowered energy production from hydropower plants and the trade embargo by India that has lasted more than three months, the government has planned to declare a state of energy crisis for the third time in seven years. The Maoist-led government in December 2008 and the Jhalanath Khanal-led government in March 2011 had also declared energy emergencies. When the energy emergency was declared in 2011 for four and a half years, the government had planned to generate 2,500 MW of electricity within the crisis period and formed a powerful three-member Energy Crisis Control Commission. The plan also included setting up thermal plants and reducing power leakage by 20 percent within six months.

However, there was not much progress in the development of hydropower projects. The installed capacity of all the hydropower projects currently stands at 787 MW, but output drops by half in the winter due to reduced water flow in the rivers. Nepal’s peak hour demand for energy presently stands at nearly 1,500 MW.

With the country failing to produce enough energy despite declaring an energy emergency on the last two occasions, the government this year has planned to introduce a law to fast-track land acquisition and environmental clearance.

“The government could not adopt a fast-track mechanism to process land acquisition and environmental clearance in the past which delayed many projects,” said Suman Sharma, secretary at the MoE. The government had planned to introduce the law in 2011 too, but the scheme failed.

According to Pantha, a bill was drafted but nothing further was done. “We had planned to take the bill to Parliament but failed to do so,” he added. The government had also aimed to set up an Energy Crisis Mitigation Commission, but that did not happen either.

Beside land acquisition and environmental clearance, long administrative procedures have been problematic for hydropower development, according to the parliamentary Agriculture and Water Resource Committee. A potential hydropower developer has to make the rounds of seven ministries and 23 departments, and comply with 36 different acts to launch a project.

According to the committee, there are a number of projects with a combined capacity of 1,055 MW that can be completed within two years. The DoED has stated that 21 projects with a total capacity of 205.59 MW can be finished within the fiscal year 2015-16, and another batch with a combined capacity of 848 MW by the fiscal year 2016-17.