Kathmandu: Minister for Energy, Water Resources and Irrigation, Kulman Ghising, has said that electricity production should not be halted by showing market scarcity.
On Thursday, after the Independent Power Producers’ Association, Nepal (IPPAN) extended congratulations and best wishes to the newly appointed Energy Minister Ghising and presented their demands, he said that since the country still requires much more electricity, production should not be stopped.
“The country still needs a lot more electricity; 20–30 thousand megawatts of electricity are required. If the private sector invests, the government won’t even need to invest,” he said. “It’s not that there is no market for electricity; the market has to be created. If we move toward halting production now, we will face a huge problem after 10 years.”
IPPAN Chairman Ganesh Karki said that recently the Nepal Electricity Authority has been withholding Power Purchase Agreements (PPAs) for a long time, claiming there is no electricity market. He urged Minister Ghising to create an investment-friendly environment that would boost the morale of private sector investors.
Responding to this, Minister Ghising said that the private sector would be further encouraged to invest. “If the regulations or guidelines need to be changed, we will do it through the Council of Ministers; even if the law itself has to be amended, we will do it through an ordinance.”
He said that without resolving the issue of forest areas, it seems impossible to develop the energy and other infrastructure sectors. For this, he stated that, in consultation with the Prime Minister, work would move forward ranging from amending regulations and guidelines to revising the law itself.
Minister Ghising also urged IPPAN to move forward with concrete problems and solutions regarding conflicts with forests in the energy and infrastructure sectors. During the meeting, Minister Ghising clarified that he was appointed as a minister with the determination to bring about some changes, and now that he is in a position to make decisions, he will not shy away from problems by making one excuse or another.
He stated that they are aware of issues related to PPAs, RCOD extensions, contingencies, and so on, and that they would take initiatives to resolve these problems. During the meeting, IPPAN Chairman Karki outlined, point by point, the tasks that the ministry, the Department of Electricity Development, and the Nepal Electricity Authority need to undertake for the development of the energy sector.
These included demands such as: the Ministry of Energy facilitating the EIA/IEE processes in coordination with the Ministry of Forests, preparing plans to increase electricity consumption, involving the private sector in transmission line construction, taking immediate steps to issue shares of hydropower companies that have been pending at the Securities Board for a long time even after approval by the Electricity Regulatory Commission, and opening pathways for the private sector in electricity trading.
Similarly, the demands regarding the work of the Department of Electricity Development included: extending the validity of licenses to 50 years as per the Electricity Act 2049, aligning the duration of the generation license with RCOD, and discouraging arbitrary fines and penalties by amending the guidelines related to licenses.
The demands regarding the work of the Nepal Electricity Authority, where the private sector faces many hurdles, included: moving forward with PPAs for projects that have already applied for connection agreements and PPAs, extending the RCOD deadline by 3 years, immediately processing PPAs for projects up to 10 MW, abolishing the contingency provisions, removing hydrology penalties, arranging for the revision of the energy table, and continuing the provision whereby projects under construction can automatically receive a PPA without entering the queue if their capacity increases by up to 25%.
Source: Annapurna Post
