From Power Cuts to Prosperity: Nepal’s Electrifying Journey Over Eight Years

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KATHMANDU, August 20: Eight years ago, until 2015, Nepal struggled with over eight hours of daily power cuts due to electricity demand surpassing supply. Citizens could not even meet essential electricity consumption needs.

Until 2018, the Nepal Electricity Authority (NEA) had issued a notice to the public to consume less electricity. Now, the situation has changed, and there is no longer a need for scheduled power cuts except for interruptions in transmission and distribution lines.

By the end of the fiscal year (FY) 2022/23, a total of 2,684 MW of electricity has been connected to the national grid from various hydropower and solar projects. It also has a share of electricity produced by the private sector. The private sector’s contribution amounts to 1,545 MW, with 661 MW from NEA projects and 478 MW from NEA subsidiary companies.

Kulman Ghising, Managing director of the NEA, says that most of the indicators in the electricity sector have turned positive. “Through our continuous efforts over the past seven years, the NEA has been consistently profitable,” he states. “In the previous fiscal year alone, we earned a net profit of Rs 12.33 billion, accumulating a total profit of Rs 36.67 billion.”

According to the officials at the NEA, the financial situation of the NEA has not only improved over the past seven years but has also shown significant improvements in other indicators. The NEA has consistently been profitable over the past seven years.

The NEA has also made significant progress in electrification over the span of seven years. NEA has been able to provide electricity to 27 percent more households out of the total population. There has also been a notable improvement in per capita energy consumption over this period. Currently, there is a power outage during the rainy season.

In winter, the NEA has been importing electricity from neighboring India, but domestic demand has been falling. During the dry season of the last year, when the water level in the river channels of Nepal decreased, the NEA imported electricity worth 1.83 billion units, i.e. Rs 19.44 billion, from India.

The NEA has imported 18.79 percent more electricity from India in the last year than in the previous year (2022/23). Nepal has also increased the electricity export share last year compared to the previous year. In the previous year, the NEA exported 493 million units of electricity and earned an income equal to Rs 3.88 billion. Last year, the NEA exported 1.34 billion units of electricity and earned Rs 10.45 billion.

But even now, the NEA has not been able to supply regular and quality electricity. Due to the lack of quality transmission and distribution lines, the problem of intermittent electricity supply is still present. Apart from this, the authority has shown signs of improvement in seven years. In half a decade, there has been a significant change in many indicators related to Nepal’s electricity.

Impressive Profitable Streak 

The NEA, which had a net loss of Rs 8.89 billion till FY 2015/16, has been continuously profitable since FY 2016/17. With the arrival of Ghising in leadership, the profit journey of the NEA has remained impressive.

The NEA made a profit of Rs 1.47 billion in FY 2016/17 and Rs 2.85 billion in FY 2017/18. The NEA earned a net profit of Rs 7.20 billion in FY 2018/19, while it earned Rs 6.10 billion in FY 2020/21 and Rs 13.37 billion in FY 2021/22. In FY 2022/23, the NEA made a profit of Rs 12.33 billion. The profit of NEA decreased by Rs 1.40 billion in that year as it had to import a large amount of electricity from India.

95 Percent of Households Have Electricity By FY 2015/16, only 62 percent of the total population had access to electricity. By the end of the fiscal year 2018/19, 78 percent of the total population had access to electricity. In FY 2018/19, the total number of electricity consumers reached 4.5 million, adding the number of domestic, community, and industrial customers.

By the year 2020/21, electricity reached 89 percent of the total population. By the year 2022/23, electricity has reached 95 percent of the total population’s households through the NEA’s central transmission system. Electricity service has reached 3 percent of households through small and micro hydropower and solar schemes. Based on this, it seems that electricity service has reached 98 percent.

According to the NEA, Madhesh, Bagmati, and Gandaki provinces have basically been completely electrified. 95 percent electrification has been done in Koshi Province, 98 percent in Lumbini Province, 67 percent in Karnali Province, and 82 percent in Sudurpaschim Province.

Out of 753 local levels, 505 local levels have basically been fully electrified through the NEA’s system. Similarly, electricity has reached most of the 227 local level places. Most of the 21 local level places have been electrified through solar and small and micro hydroelectricity.

In the year 2021/22, there were 47.7 million electricity customers. This number increased by 7.76 percent in the year 2022/23 and reached 51.3 million. With 510,000 customers using community rural electrification, the number of people using electricity from the national grid has reached 5,640,000. The NEA is working with a plan to electrify the entire country within the next two years.

Per Capita Annual Energy Consumption Reaches 380 Units 

In the year 2015/16, annual energy consumption per capita was 150 units. In the year 2018/19, the annual energy consumption per capita was 245 units, but in the year 2079-080, the annual energy consumption per capita reached 380 units. In the last seven years, electricity consumption seems to have doubled on average.

Presently, there has been an expansion in individual electricity consumption capacity as well. According to the NEA, the network of electricity transmission lines was 2,911 circuit kilometers during the year 2015/16.

By the year 2022/23, the total length of transmission lines of 66 KV to 400 KV voltage level has reached 5572 circuit kilometers. Similarly, the total capacity of substations is 8,243 MVA.

Reduced Electricity Leakage 

The NEA has also reduced electricity leakage in an encouraging manner during the last seven years. In the year 2015/16, the electricity leakage was 25.78 percent, and it decreased to 15.32 percent in the year 2018/19.

In the year 2020/21, the leakage increased slightly and reached 17.38 percent. By the year 2022/23, the leakage has come down to 13.46 percent. “By limiting transmission and distribution leakage to 13.46 percent, we have succeeded in setting a new record in the history of the NEA,” said Ghising, Executive Director of the NEA.

Prospects of Electricity Trade with Bangladesh 

Prime Minister Pushpa Kamal Dahal has announced that there will be electricity trade between Nepal and Bangladesh during this monsoon season. Addressing the 38th-anniversary program of Nepal Electricity Authority on Friday, Dahal said that the relevant bodies of Nepal, India, and Bangladesh are in the final preparations to sign the agreement so that electricity trade between Nepal and Bangladesh can start during this fiscal year.

“Nepal-Bangladesh electricity trade will be gradually boosted after reaching a tripartite agreement on the construction of international transmission infrastructure,” Dahal said, “I am confident that a far-reaching and important agreement will be reached in the energy sector during my visit to China next month.”

Prime Minister Dahal said that although the history of hydropower development in Nepal is more than 112 years old, it has not been able to fully take advantage of the water resources. “It is an ironic situation that the rivers continue to flow, but we are not able to reap benefits from them,” he said.

Currently, a number of projects are being carried out for the development of hydropower projects in rivers and streams across the country. Prime Minister Dahal said that everyone should be honest and unite without political influence in development work for a promising future.

Source: Republica