PRAKASH CHANDRA LOHANI
This is not just the winter season but the dark season as well. For a traveler from a South East Asian or even a South Asian capital coming to Nepal in an evening flight, the capital city looks dark and gloomy. Welcome to Nepal, one of the richest country in the world in hydro resources. This year the government has proudly announced that it is going to limit load-shedding to 12 hours a day. The Nepal Electricity Authority may be able to honor this commitment provided India is generous and sells some more power to Nepal. Ironic as it may seem, Nepali politicians like to offer all kinds of dreams about power exports to India. However, the facts are different: if the Indians decide to cut exports to Nepal for any reason, Nepal will quickly head towards an 18-hour daily load-shedding. But rest assured, the NEA management will duly publish its load-shedding schedule as a relief to the people!
Load-shedding in Nepal is not a recent phenomenon. It has been continuing for the last seven years since Prachanda became the prime minister. During those days the government even thought of declaring an “electricity emergency” even though nobody was sure what it meant in practice. This was to be expected. The leaders of all the big parties determined to build a ‘New Nepal’ were so busy in the heroic task of mudslinging that a serious crisis affecting the overall economy and the lives of the people was of no consequence. But the NEA boldly declared in its 2007/2008 annual statement that by 2013/14 Nepal will have surplus energy to sell.
The last time there was a rough match between demand and supply of electricity was in 2005. Since then shortages have been the norm. And yet for the last seven years the problem has been consistently ignored. In fact at one point the crisis was almost being used to import diesel plant, knowing very well that it is the most expensive option (Rs 30-40 for one unit of power, in comparison to Rs 7-10 for coal and hydro and Rs 12-16 for solar) of power generation in the world. It is worth noting that even India is planning to generate as much as 20,000 MW of grid-based solar power by 2022 along with sixty solar cities across the country. And yet in Nepal we were just about ready to opt for the most costly system in the world under a government headed by a PM for whom the “liberation” of the people was the primary political goal.
Demand of electric power in Nepal is increasing at the rate of 80-100 MW a year. The demand will be higher in the future if we are serious about achieving seven percent growth. The per capita consumption of electricity in Nepal is probably one of the lowest in the world; just 71 units Kwh in 2006 and is probably around 100 at present. For many developed countries it is easily over 7,000 units Kwh. What this means is that if Nepal is serious about rapid economic development the whole idea of exporting electricity needs a review, but this is something our planners and politicians seem to avoid. The idea of getting rich by exporting power has been an essential political rhetoric. The possibility that all the commercially exploitable hydro-potential of Nepal, around 50,000 MW, may in fact not be enough to achieve the living standard of a middle income country (US $5000-$7000) is always overlooked. No one wants to spoil the dream of affluence the easy way.
From a long term perspective there is no question that Nepal should try to exploit its water resources for the rapid development for manufacturing, service and agro-based industries. But in the next two to three years we should look for alternative sources like solar and coal that can be installed in a relatively short time. Simultaneously, Nepal and India must seriously consider trading in electricity, with the market and the private sector acting as the main agents of transformation. This can create a win-win situation for both the countries.
Solar energy is a much talked about topic in Nepal but never taken seriously as an alternative source of energy on a relatively big scale. The cost of solar energy has been decreasing rapidly over the years; one solar cell cost US $77 in 1977, at present the cost is less than US $1. In India solar energy producers have been willing to supply power at rates not exceeding INRs 9 per unit (around Rs 14). Our government however has never seriously considered this option as a short to medium term solution. For example a project to produce 2 MW solar power to meet the requirements of Singh Durbar was declared with great fanfare a few years ago. But no one seems interested in the project any more. It seems that unless a donor comes along, we are not interested in solving our own problems.
The other short to medium term option to tackle power shortage is to construct a coal fired plant, preferably in Birgung since there is a dry port on the border. The cost of coal-fired plant compares favorably with hydro and is in fact the main source of power in most countries including China and India. A 200 MW plant could probably be constructed within a year if the government and the private sector get their acts together. In winter, the plant would supply power in Nepal while it may be used to export power to India during the summer when their power needs are at a peak. As for raw materials, this is not an insurmountable barrier. Even India imports high quality coal from Indonesia. Nepal could import high quality coal from Indonesia and hand over the same to India at Kolkata to receive an equal quantity from coal mines in India close to the Nepali border. This was the model that was followed until a few years ago in the import of petro products.
An agreement on power trade was signed by the finance secretaries of Nepal and India almost 17 years ago when I was the foreign minister. Unfortunately that agreement has been in a limbo. Bureaucracies both in India and Nepal have ignored it. Over the years many economic policies have changed, including the perspective on electricity generation and distribution. In India private sector is being encouraged to enter power generation and the power is being viewed as a commodity whose price should be determined by the market. This trend will gain momentum in the future and it means that the power trade agreement between Nepal and India signed almost two decades ago needs to be reviewed and implemented with the goal of allowing the market to determine power exchange between the two countries.
A common market model in the power sector will definitely encourage Indian as well as companies from other countries to invest not only in power generation but also in building new transmission lines between India and Nepal. I suspect there will be opposition to this idea from both the Indian and the Nepali bureaucracy for it limits their discretionary authority in this sector that has always been seen as full of possibilities for rent (kut) collection. But it is in the interest of the people of both Nepal and India to make the move. It is not even a new concept since it was somewhat formalized almost two decades ago.
The writer is a senior leader of Rastriya Prajatantra Party
Source : Republica