Nepal Heading To Become Power Exporter

Hydropower is a cheap and sustainable source of energy with negligible environmental impacts. Despite having huge potential in hydropower, Nepal has been unable to tap its resources at the desired pace.

In 112 years since the construction of the country's first ever Chandrajyoti Hydro-electric power station in Pharping in 1911, Nepal has generated only 2,800 MW power, over 75 per cent of that only in the last half-a decade.

However, the pace of hydropower development in the last one decade has significantly increased. As a result, the country that has been reeling under an 18-hour load-shedding 

a day, has now started exporting power to India during the rainy season. However, in a dry season, the country still has to import power to meet domestic demand.

The country added 541 MW power in the national grid in the last one year, totaling the national power production to 2,858 MW. Besides, 564 MW hydropower projects are under testing and commissioning.

The present government has given top priority to the power production, both hydro and solar, in the participation of the private sector.

Currently, the construction process of the large reservoir and semi-reservoir hydropower projects 1,200 MW Budhigandaki and 635 MW Dudh Koshi reservoir hydroelectric projects and 1,063 MW Upper Arun semi-reservoir hydropower projects are advancing.

Other hydropower projects, including 900 MW Arun III, are also in construction phase.

Access to electricity 

The government and the Nepal Electricity Authority (NEA) are working to provide electricity to all citizens within one year. Now, the population with access to electricity has increased by 5 per cent and reached 98 per cent. With the improvements in electricity services, per capita energy consumption has increased to 380 units.

Grid electricity has reached 76 of 77 districts, with only Humla lacking it. Three of the seven provinces and 48 districts have been fully electrified. The Madhes, Bagmati and Gandaki provinces have been completely electrified. Similarly, around 95 per cent of electrification has been completed in Koshi Province, 98 per cent in Lumbini Province, 67 per cent in Karnali Province and 82 per cent in Sudurpaschim Province. The maximum daily electricity demand is now around 1,700 MW.

Power export

With the progress made in the construction of hydropower projects, Nepal has started exporting power to India since last year. After the operation of 456 MW Upper Tamakoshi Hydropower, the country's largest hydropower constructed under its own investment, Nepal was able to export power to India and improve the electricity supply.

About 1.74 billion units of electricity worth Rs. 15.24 billion were exported to India in six months of rainy season this year. The export of electricity increased by 31.28 per cent this year compared to last year. So far, the NEA has received approval for the export of 657 MW electricity to the Indian market.

The government has a plan to generate about 30,000 megawatts of electricity within the next 10 years.

During Prime Minister Pushpa Kamal Dahal 'Prachanda's visit to India in May this year, an agreement was reached between Nepal and India, according to which India will buy 10,000MW of electricity from Nepal in 10 years. This is expected to be a milestone for Nepal's hydropower development and electricity export. However, the seasonal export of power has stopped after the advent of the dry season.

Electricity export could contribute to the foreign exchange reserves while helping to narrow down the trade deficit between Nepal and India.

According to the Nepal Electricity Authority (NEA), the country will be a net exporter of energy within one year and stop the import of power to meet the national demand even during the winter season within the next two years.

This fiscal year, about 900 megawatts will be added to the national transmission system, and the NEA has expected to export electricity worth Rs. 25 billion to Rs. 30 billion next year.

In order to expand Nepal's electricity market to Bangladesh, necessary preparations have been completed to export 40 megawatts of electricity to Bangladesh in the initial phase. For this, the Government of India has already agreed, while the Government of Bangladesh has already given in-principle consent. This agreement has opened up a regional market beyond India.

Transmission lines

By adding about 500 circuit km of transmission line and substation capacity of about 2,400 MVA, the transmission line has reached about 6,000 circuit km and the capacity of the substation has reached about 9,500 MVA.

Transmission lines along various river corridors, including the Kaligandaki, Modi, Khimti, Dordi and Koshi corridors, have been completed to bring electricity generated from private sector projects to the national grid system. Construction of the Hetauda-Bharatpur-Bardghat 220 kV transmission line and Marsyangdi-Kathmandu 220 kV transmission has been completed.

Similarly, a 400 kV capacity Inaruwa substation constructed in Bhokraha Narsingh Rural Municipality-4 of Sunsari district was inaugurated on Friday. It is the second-largest substation in Nepal after the Dhalkebar substation. Construction of the third 400 kV has reached the final stage in Hetauda.The 132 kV Kushaha-Kataiya Third Circuit, Raxaul-Parwanipur Second Circuit and Mainhia-Sampatia transmission lines connecting Nepal to India have been completed and are operational, while the construction work of Butwal-Gorakhpur 400 kV cross-border transmission line has started. It has been agreed to proceed with the construction of Lamki-Bareli and Inaruwa-Purnia 400 kV transmission lines.

During PM Prachanda's visit to China, it was agreed to advance the Chilime-Kerung 220 kV transmission line connecting Nepal to China. It is expected that, with the completion of the construction of this transmission line, Nepal will also start electricity trading with China.

Challenges

Even with an increase in power generation, there is still the problem of power tripping and low voltage. It would be more challenging for the authority to improve the electricity supply. NEA has to invest billions of rupees in the construction of transmission and distribution lines.

The first challenge is the management of the market for the produced electricity. Secondly, the challenge is to increase regular and quality electricity supply.

Meanwhile, some under-construction transmission lines are affected due to delay in the permission of the Ministry of Forest to cut trees and local obstructions. There will be a disaster in the electricity sector if we are unable to complete the transmission lines which are under construction and planned in time.

The issue of carrying a river in bags has been in the news for a long time. Taking a license, holding it but not working is fatal for the country. Such practices should be scrapped, as instructed by Prime Minister Prachanda recently.

Opportunities

Nepal's water resources are not only the basis of Nepal's prosperity but also the source of green energy for South Asian countries. Currently, green hydrogen is being developed as a major source of fuel in the world. As there is a great possibility of using Nepal's water and hydropower to produce green hydrogen and ammonia and export it to the world market, the government has prepared and implemented a green hydrogen development policy. Under this, a policy has also been taken to produce chemical fertilisers necessary for food security in the future.

The hydropower could be a major source of foreign currency earnings by exporting power. The government has made and implemented an electricity consumption action plan so that the hydropower generated within the country is consumed more within the country. According to which, customs concessions on the import of electric vehicles and electric stoves, tax concessions for charging stations and incentives for the private sector to install charging stations across the country have also been provided.

At present, 51 fast charging stations have been installed by the Authority alone, while around 200 charging stations have been installed by the private sector. According to the government's policy of installing sufficient charging stations, there is an action plan to install 500 more charging stations.

The country has been spending over Rs. 350 billion annually for petroleum products, including liquefied petroleum gas. If the country substitutes the import of cooking gas by electric and uses electric vehicles, a huge amount for the consumption of petroleum products can be saved. Besides, the use of electricity will help keep the environment clean by controlling carbon evasion.

(Kafle is a journalist at The Rising Nepal.)