Nepal Makes Strides In Electrification

Nepal is a country where people are struggling to have access to basic needs such as education, healthcare, drinking water and transport. But the energy sector has made big strides over the last few years. It is encouraging to note that 99 per cent of the households have now been electrified. If we look at the data, there was 58 per cent electrification in the fiscal year 2072-73, which jumped to 99 per cent in the fiscal year 2080-81. That there is an increase of 41 per cent within a span of eight years is not a small deal. 

Out of the 99 per cent electrification, 97 per cent is from on-grid sources, whereas two per cent is from off-grid sources. But geographically challenged and remote hilly and mountainous areas of Karnali and Sudurpaschim provinces are yet to be electrified. However, the people living in these area are using energy from micro-hydel projects and solar energy. Out of the 753 local bodies, 539 local bodies are fully electrified, while 196 local bodies have partial electricity supply. The remaining 18 local bodies are yet to be connected to the national grid. Province-wise, the Madhes province has 100 per cent electrification, whereas the Karnali province has the least electrification at 74.38 per cent. The Sudurpaschim province has 86.58 per cent electrification. The rest of the provinces have electrification at over 99 per cent.

 Installed capacity

The total installed capacity of electricity is 3,157 megawatts (MW) in the country. An amount of 1,706 MW has been added to the national grid over the last three years. Electricity is produced by the NEA, its subsidiary companies and the private sector. Hydropower has the lion’s share at 95 per cent (2,991 MW), followed by thermal energy (53 MW), solar energy (107 MW) and biomass (six MW). The supply of electricity to the vast majority of people has been possible through an increase in domestic production and imports of electricity from India. Over the last three years, there has been an increase of 9.3 per cent in electrification. Now, the NEA is serving 5.953 million customers. The number of customers was 2.97 million during the fiscal year 2072-73. 

The per capita consumption of electricity has jumped to 400 units from 131 units eight years ago. In terms of annual units consumed, eight years ago the consumption amounted to 3.72 billion units, which is now 10.23 billion units.  One of the Sustainable Development Goals, announced by the United Nations in 2015, pertains to the energy sector. As per Goal 7, Nepal has to ensure access to affordable, reliable, sustainable and modern energy for all by 2030. As the NEA is working to electrify the remaining areas (one per cent) within this fiscal year, the goal of attaining cent per cent electrification by 2030 is likely to be fulfilled within this fiscal year.   

Before Kulman Ghising assumed the mantle of the Nepal Electricity Authority (NEA), there was load-shedding for up to 18 hours a day. Under the dynamic leadership of Ghising, the NEA also began making profits, turning the “white elephant” into a reliable and profitable entity. Now, the NEA earns billions of rupees in profit annually. It is a matter of gratification that Nepal has been able to produce a surplus of electricity. Nepal and India have a trade compact on mutually buying and selling electricity. Last fiscal year, the country exported Rs. 17.07 billion worth of 1.94 billion units of electricity to India. Likewise, the country imported 1.91 billion units of electricity worth Rs. 16.93 billion. There was a net income of Rs. 140 million in the power trade with India last fiscal year. 

Despite commendable progress in the energy sector, there is still something to be improved. Factories and industries are complaining that there is an erratic supply of electricity. Reliable power supply needs to be delivered to factories, industries and business houses. Even the supply of electricity to households is not smooth. There are daily power cuts, although brief, in Kathmandu and other cities. There may be problems with transformers and other equipment. The NEA should pay assiduous attention to this. One of the praiseworthy jobs of the NEA is slashing electricity leakages. The rate of such leakages was high in the past. Now, such leakages have been drastically slashed. 

The NEA is encouraging people to increase the consumption of electricity by using electric appliances such as induction stoves at home. Electricity is cheaper than kerosene and LP gas. But the supply of electricity is not reliable. Unless there is an uninterrupted supply of electricity, we cannot fully depend on electricity for cooking purposes. Moreover, most households in rural areas are still using firewood for cooking purposes. The use of firewood would stretch forest resources besides affecting the health.

Consumption 

There is scope of consuming more and more electricity in Nepal. Electric vehicles are gradually increasing in number. However, the government policy of heavy taxation has discouraged the satisfactory growth of electric vehicles. The construction of the East-West Railway is in the works. Such railways can be replicated in other parts of the country. Electrification of the transport sector would jack up the consumption of electricity, thus reducing the cost involved in the import of petroleum products. 

As stated above, Nepal and India have a power deal. But the terms of the deal are dictated by India. India has its own policy of buying electricity. It does not buy electricity produced by projects financed by non-Indian companies. So the government should hold negotiations with the government of India on the purchase and sale of electricity on a win-win basis. Besides, the government should take the initiative in selling electricity to other South Asian countries. This will boost the economy to a certain extent.     

(Maharjan has been regularly writing on contemporary issues for this daily since 2000.)