Dependence on India for energy to worsen by 2017

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    Annual electricity import bill likely to jump five-fold to Rs 50 billion per year 

    KATHMANDU, Feb 1: Nepal will become a net electricity importer by 2017 if things go as stated by Indian ambassador to Nepal, Ranjit Rae. Rae on Friday said that Nepal can import an additional 940 MW of electricity via three cross-boarder transmission lines by the end of that year.

    Electricity import will by that time outstrip domestic power generation. This will be just the opposite of what everyone has been stressing, ie, taking ‘energy as a strategic commodity’ and avoiding dependence on a single country in view of the Indian blockade that has been continuing since September.

    Importing more electricity than it produces will not take Nepal in the direction of trade diversification, considering that Nepal’s trade is more than 64 percent with India, including petroleum imports worth over US $ 1 billion every year.

    Speaking at an interaction on the topic ‘Enhancing Nepal-India Energy Cooperation’, organized by the Nepal India Chamber of Commerce and Industry on Friday, Rae had said that ‘if all goes well’ India will be able to export 940 MW of electricity to Nepal through three different cross-border transmission lines.

    Talking to Republica, Secretary at Nepal’s Ministry of Energy, Suman Prasad Sharma, said that the country has no alternative to importing as much electricity as possible.

    “We know it is a strategic commodity, but we should work toward importing only for the short-term until the country becomes self-reliant in electricity generation,” he added.

    This is as per the vision, shared by Indian Prime Minister Narendra Modi, of supplying power to Nepal for the short term, with Nepal in the long run feeding power to the Indian economy.

    “Importing power will make load shedding in Nepal history,” added Ambassador Rae. Nepal will start importing 80 MW through the partial operation of the cross-boarder Dhalkebar- Mujaffarpur Transmission line within the next three weeks, according to a press release issued following a meeting of the Joint Steering Committee held in Kathmandu of Friday and Thursday. The committee is co-chaired by the energy secretaries of Nepal and India.

    Nepal’s current installed capacity at its hydropower plants is less than 800 MW while the import from India stands at 200 MW at present. NEA paid a bill of Rs 10 billion (for 1.36 billion units) to different power companies in India for electricity imports in Fiscal Year 2014/15. This figure indicates that the electricity bill will skyrocket to about Rs 48 billion annually.

    No domestic hydropower plants of above 100 MW will come stream by the end of 2017, so that a country rich in water resources will be producing less power than it imports. The earthquake coupled with the Indian blockade have pushed the Upper Tamakoshi Hydropower Project of 456 MW capacity into time overrun of more than a year. Project officials say the project is hardly likely to see completion by the end of 2017.

    Meanwhile, independent hydropower developers are of the view that Nepal should focus on generating its own hydropower instead of importing power from India as this should be taken as a matter of strategic energy security. “Politicians, policymakers and bureaucrats should not think in terms of an easy way of meeting electricity demand but should rather go for a strategic approach in order to make the country energy-independent,” Narendra Prajapati, a hydropower developer, told Republica.”Hydropower plants may be a bit expensive in the beginning but it pays in the long run, unlike purchasing petrol or even electricity from India,” he added.

    However, government officials are looking to importing more electricity from India to reduce the load shedding hours rather than focusing on generating the country’s own power. Prime Minister KP Sharma Oli has repeatedly spoken of ending load-shedding within a year and his aim is to import as much as possible from India, making the country more vulnerable in terms of energy security.

    However, there is also a positive side in the short run to importing electricity as country’s ailing economy and manufacturing sector that have lost competitiveness due to rolling power outages can see a rebound.

    Source : Republica