Earnings From Electricity

With a water volume that can generate a total of 80,000 megawatts of electricity but with the technical viability of producing about 42,000 MW, hydropower energy can become a strong vehicle for advancing our country's economy. Though the nation has not yet achieved the optimum level of power generation capacity, it has gradually been installing new hydropower projects in various parts of the nation where rivers run round the year. A Nepal Electricity Authority (NEA) report suggests that the country currently has an installed capacity of 2,200 MW of power generation. The peak demand for domestic consumption of electricity stands at 1,660 MW. It suggests that we have a surplus of electricity.

Nepal has long been mulling selling its electricity to neighbours, where a power crunch created by increasing demand is a reality. Despite several hindrances, the country's electricity governing body, the NEA, has been able to build up transmission lines and power grids so that the power can be exported and sold to neighbouring India at competitive prices. It is heartening to note that the NEA recently sold electricity worth Rs. 1.72 billion to Indian companies and plans to export around 364 MW of surplus power daily to the southern neighbour. The NEA received approval from the Central Electricity Authority of India's Power Ministry to sell 364 MW electricity generated through six hydropower plants in the Indian Energy Exchange markets. The NEA sources have claimed that the country could earn around Rs. 20 billion in the coming fiscal year by selling surplus electricity to India. 

The sale of electricity to India and elsewhere would spell a better time for Nepal's electricity generation capacity. The revenues and earnings generated from electricity export can be invested in constructing new hydel projects or in upgrading the power generation capacity of the existing projects. Since our neighbours are always in search of energy because of their swelling economy and growing population, Nepal can benefit a lot from surplus generation of power through its snow-fed Himalayan rivers, which, in turn, help boost our overall economy. It will also help in utilisation of our water which will go to waste if we fail to harness it in time.

Despite the huge benefits, production and supply of electricity are easier said than done. Hydel projects demand heavy investments, which is very hard to come by. Risks of environmental damage pose another difficulty in promoting such projects.  Building adequate and sound transmission lines is required for a smooth supply of electricity reliably. Likewise, our river-based hydropower projects cannot always produce the same amount of power as they can during the monsoon season when rivers flow at their full capacity helping a high level of power generation. 

However, the country must not be bogged down by these problems and move ahead with the construction of new electricity projects such as Budigandaki and many other plants that will generate enough power for domestic consumption that can replace our excessive dependency on fossil fuels for which we need to spend billions of rupees every year. Let us hope Millennium Challenge Corporation (MCC) Nepal Compact signed with the US to build transmission lines and upgrade road networks will do wonders in generating and selling more electricity abroad. The income from the sale of electricity will certainly boost our development and living standards.