NEA employees slam government plan to install 80MW diesel plant

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    KATHMANDU, NOV 23 –

    Employees unions at the Nepal Electricity Authority on Thursday slammed the government’s plan to set up an 80 MW diesel plant saying that it would be financially unviable. The NEA Employees Association and the NEA Employees Union have announced they would launch a protest if the government went ahead with its plan to install the power station.

    The Ministry of Energy (MoE) and the NEA have planned to set up the diesel plant in a bid to ease the power shortage as part of the government’s Load-Shedding Action Plan (LSAP).

    A board meeting of the NEA decided to install the generating plant in two phases. The station will have a capacity of 36 MW and another station with 44 MW will be added. The scheme is expected to enable the NEA to limit load-shedding to 10 hours daily during the approaching winter. NEA sources said it would cost Rs 9.80 billion to set up the power plant.

    NEA said that it would cost around Rs 30 to generate one unit of energy from diesel plant while NEA has been selling power at an average rate of Rs 7 per unit. The proposed plant will result in an additional loss of Rs 23 per unit to the NEA . “The plan of purchasing a diesel plant in itself is not feasible,” said Janardan Bhattarai, president of the NEA Employees Association, “Moreover, preparations are underway to bring a diesel plant with a capacity of 80 MW instead of 30 MW.”

    It takes Rs 8 to import one unit energy from India and the NEA purchases energy from independent power producers at an average rate of Rs 6.88 per unit.

    “At a time when the NEA is bearing a loss of Rs 2.39 per unit, the move will further increase the per unit loss and will eventually worsen the NEA ’s financial health,” he said. “Even if the diesel plant is operated for 10 hours a day, it will result in a total loss of Rs 15 billion annually,”

    he added.

    According to an NEA source, if the government spends an additional Rs 250 million to increase the capacity of the Kushaha-Kataiya cross-border transmission line, it will help to import another 75 MW of energy from India which only costs Rs 3 billion. “Though there are options to reduce power cuts at less financial cost, the government has been adopting an expensive means,” said Sam Prashad Rimal, president of the NEA Employees Union, adding that the move was a sole commission game.

    Moreover, there will be sufficient energy to meet local demand within two years as several hydel projects with a combined capacity of around 1,000 MW are under construction, according to trade union officials. “Why invest such a huge amount of money for just two years?” added Rimal.

    Meanwhile, NEA officials have also opposed the idea saying that at a time when the price of diesel had been surging continually and its regular supply was uncertain, the idea of importing a diesel plant would backfire in the long run.

    A source at the NEA said that as the government had not been able to operate the existing multi-fuel plants, the country would not be able to benefit by importing a diesel plant.

    There are currently two diesel plants in operation in the country, a 39 MW plant at Duhabi and a 14.4 MW at Hetauda. However, the power station in Hetauda has been generating only 6 MW of electricity. The NEA requires Rs 2.80 billion a year to operate its thermal plants at present while a litre of diesel can generate only 3.65 units of energy.

    However, the MoE said that the diesel plant was only an immediate measure to address the projected power shortage in the winter.

    “As no big hydropower projects under construction will be generating power any time soon, the only way out is to import a diesel plant for now,” said Energy Secretary Hari Ram Koirala. He added that the diesel plant should be imported for a temporary period until the country is able produce sufficient energy to fulfil its requirement.

    Source : The Kathmandu Post