End of load-shedding

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    BISHAL THAPA

    A Street Vendor selling load-shedding schedule in Kathmandu
    A Street Vendor selling load-shedding schedule in Kathmandu

    Load-shedding or the rolling electricity blackouts that have been in place over the last few years could come to an end with a single stroke of the “Delete” key. For that, we’ll need to take a deep breath, believe in ourselves and strike the “Delete” key with conviction.

    Load-shedding in Nepal could come to an end if Nepal Electricity Authority (NEA) stops doing two things: First, it must stop planning for load-shedding; and second it must “Delete” or stop publishing the load-shedding schedule. This wouldn’t immediately bring demand and supply into balance—after all, the current load-shedding is because of insufficient supply. 

    NEA would still need to resort to load-shedding to bring supply and demand into balance. It would have to continue resorting to load-shedding, except it would have to do it randomly across circles, rather than using a pre-determined rolling weekly load-shedding schedule for each circle.

    If NEA were to actually stop publishing the load-shedding schedule and start to randomly enforce rolling blackout, there is a real risk that a large number of people may gather outside NEA offices around the country in protest. People could pelt stones, barricade NEA offices, even burn it down, in which case there will be no NEA left at all, no electricity supply at all and, therefore, no blackouts to contend with. 

    But the Nepali people are smarter than that. 

    Having lived through a long and violent uprising in the expectation of a better future only to be denied one, they now realize that pointing the gun at each other, or resorting to gunda-gardi (hooliganism) may not always get you what you want. Rather than barricade NEA offices, protest or cause mayhem, the Nepali people will instead groan, moan, curse under their breath and get on with their lives. The cleverer ones will find a way to coax donors into supporting even more conferences on improving electricity supply. Life will go on.

    And that is the point at which load-shedding will begin to disappear and the space for innovative distributed solutions that isn’t reliant solely on NEA will open up.
    Every country goes through shortages and surpluses in electricity markets much like the fluctuations of a business cycle. Nepal is no exception. But different countries have different ways of responding to an imbalance between demand and supply in electricity market.

    In the United States, for example, electricity markets went through a period of sustained shortages in the mid-to-late nineties. This was followed by an equally long and sustained period of surpluses. 

    There are several competitive power markets in the United States. In those markets, shortages were expressed through power prices which routinely exceeded $10,000 per mega-watt hour (or NPR 1,000/unit). Generators demanded this price and buyers paid it. Attracted by these prices many new generators flooded into the market. Within a few years there was excess generation capacity. Electricity prices slumped and generators were unable to recover their costs. 

    US electricity markets responded to the slump, this time with bankruptcies and closures. Many energy companies went broke, others were forced to merge and several billions of dollars of investments sank. There was plenty of heartache, plenty of finger pointing but at the end, the markets had adjusted demand and supply. Life went on.

    Like in the US, a period of shortages in generation as Nepal is experiencing is not abnormal. The question is how we respond to it.

    US has robust competitive markets, at least in some of the key states. Shortages and surpluses are expressed through changes in prices, which provide the incentives to correct the imbalance. On the other hand, Nepal’s response to power shortages was a weekly schedule of load-shedding that said when power would go off and for how long. 

    The purpose of the analogy is not to contrast the market and institutional framework of Nepal against that of the US. That would be irrelevant. The point of the comparison is to illustrate the real tragedy of Nepal’s load shedding. 

    The second worst thing that NEA did was incorrectly judge demand and supply a few years ago. For that it can be forgiven. But the absolute worst thing it ever did—for which it cannot be forgiven—was to have a system of announced rolling power cuts, the weekly load-shedding schedule. The tragedy in Nepal’s power crisis is not that we have electricity shortages. The real tragedy with Nepal’s current power crisis is how we responded to those shortages.

    The load shedding schedule forced consumers to respond. Armed with the weekly schedule, people began to reorient their lives. Batteries and inverters, most of them of poor quality, sold briskly. People woke up at odd hours to iron their clothes. Children were taught by their parents to switch off their computers, stop reading and instead to go to sleep early or loiter in the neighborhood with their friends.

    With the load-shedding schedule, Nepal didn’t respond to the electricity crisis, it simply forced everyone to adapt to it. It snubbed Nepal’s psyche and killed her hopes of a recovery or if not that, set it back several decades.

    Nepal’s ongoing electricity crisis may have cost it several percentage points in its economic growth. But that’s not where it should hurt. Even a flood or an unexpected calamity can cause a large economic loss. The question is how we respond to a crisis and build the basis of a recovery. 

    The easy convenience of a load-shedding schedule has paralyzed our chances for a recovery. People have adjusted. They are willing to wake up at three am to iron their shirts. Businesses have learned to adjust. Hotels are prepared to tell their guests, “Sorry, the air conditioner won’t work because there is no electricity.” 

    There is no urgency for improvement—just a decline to adjustment. With 18 hours of power cuts, an improvement to 16 hours in the next few years will still seem like a good thing—but is it really?

    NEA’s forecast that there will be a surplus supply of electricity by 2017-2018 is in part a direct bias of the load-shedding schedule. The reason there could be a surplus is because there is hardly any demand growth. And the reason there is no demand growth is because everyone—people and industries—have adjusted to life with the load shedding schedule. 

    If you have learned to live with 18 hours of power cuts, nobody can quite imagine what they would do with 24 hours of continuous reliable power supply. If you can’t imagine it, you certainly won’t demand it. 

    Rather than the load shedding itself, it is the use of the load-shedding schedule as the response strategy that has killed Nepal’s long-terms prospects for improvement. 

    In this crisis, the government has missed an opportunity to allow for some fresh out of the box thinking on Nepal’s energy issue. It has continued to promote the same tired-out solutions: more plants, bigger plants, longer transmission lines and deeper grid extension. Nepal needs a broader portfolio of smarter energy use, distributed solutions, micro-grids, smaller-scale diffuse applications, diverse collaborative business models and broader technology options to end load-shedding and address the energy aspirations of its people.

    bishal_thapa@hotmail.com

    Source : Republica