KATHMANDU, Aug 26:
At a time when the Nepal Electricity Authority (NEA) is hesitating to sign power purchase agreement (PPA) with developers, experts have urged the state-owned energy distributor to increase hydropower generation for substituting cooking fuel and other petroleum imports as well increasing per capita electricity consumption.
Presenting a paper on ´Power Requirements in Future Energy Scenarios of Nepal´ at the Power Summit 2013 on Monday, Prof Amrit M Nakarmi said Nepal has lowest per capita consumption electricity consumption in Asia.
Per capita electricity consumption of Nepalis is 93 units, far below the per capita electricity consumption of Asia which stands at 806 units.
India´s per capita electricity consumption stands at 644 units compared to 2,942 units of China. Per capita electricity consumption of Bangladesh, Sri Lanka and Pakistan stands at 279, 445 and 457 units, respectively.
“Nepal is the poorest country in Asia in terms of energy consumption,” Nakarmi, who is associated with Center for Energy Studies at the Tribhuvan University, said. “If hydropower projects are commercially viable, NEA should develop it as consumers will pay for it. They will choose cheaper electricity than the costlier fossil fuels.”
Despite having immense hydropower potential, hydropower has only 2 percent share in the energy mix which is heavily dominated by bio mass (85 percent). Petroleum products has 9 percent share in the energy mix, according to Nakarmi.
“As the price of LPG and petroleum products is rising, customers would have chosen the cheaper electricity. Unfortunately, NEA has no adequate power supply,” he added.
Industrial sector is consuming more than 60 percent of diesel imported in the country for power generation. It can be displaced by generating sufficient power. Nakarmi said it will also save Rs 3 billion a year from going outside the country to purchase generators.
Statistics shows the price of kerosene has increased multifold over the past 15 years. Similarly, price of LPG has increased three-fold during the review period. However, electricity price has increased by only 50 percent. Nepal imports LPG worth Rs 17 billion every year.
Nakarmi projected domestic energy demand to climb to 4,000 MW by 2020, 11,000 MW by 2030 and 31,000 MW by 2050.
Speaking at the Summit, Sher Singh Bhat, chief of Power Trade Section of NEA, said the state-owned energy distributor is in need of reservoir type projects in which energy can be generated as per the demand. “As electricity for cooking purpose is needed only during peak hours, NEA shouldn´t buy electricity of run-of-river projects for the purpose,” he added.
NEA has declined to sign PPA with many projects including the Super Six Projects which were awarded to private developers through open competition.
Inaugurating the event, President Ram Baran Yadav underlined the need to increase per capita energy consumption by at least five times. “We should adopt innovative technology and engineering to reduce the cost of electricity production,” he added.
Minister for Energy Umakanta Jha urged participants of the summit, including foreign power developers, to choose storage type projects for investment in Nepal.
Addressing the Summit, Subarna Das Shrestha, chairman of organized by the Independent Power Producers´ Association – the organizer of the event, said his association hopes the Summit energize the energy sector which has slowed down since 2008. The summit has been organized after a hiatus of four years.
Source : Republica