Oversight mechanisms should simplify regulatory works instead of making them more complex


February 04, 2020

Though Nepal Electricity Authority has eliminated load-shedding from the country, the power utility has been facing major problems of power tripping due to the low capacity of its distribution and transmission system. The country will have excess energy from next fiscal year when 1,000 megawatts of electricity will be added to the national grid, along with the completion of the 456MW Upper Tamakoshi hydroelectric project. At the moment, NEA is working to reinforce and upgrade the transmission and distribution system for reliable power supply and increased electricity consumption. However, NEA too has not been spared from the impact of the coronavirus outbreak, as most of the projects, including generation and transmission and distribution systems, are being handled by Chinese contractors. In this context, Umesh Poudel, caught up with Kul Man Ghising, managing director of NEA, to learn what the power utility has been doing in terms of making reliable its distribution and transmission system, among other issues. Excerpts:

NEA has eliminated load-shedding from the country. However, power supply is still unreliable due to some constraints in distribution and transmission system. How long will it take to address such issues? 

Our distribution system may seem unreliable owing to some technical issues. This is because the entire distribution system has not been upgraded, while the consumption of electricity is increasing. While dust pollution is a major problem in Nepal, the power insulation process becomes more affected due to the rain. Coupled with increased demand in the winter season, all the transformers, feeders and cables are overloaded. Because of this, we have been facing the problem of power-tripping. Hence, we have accorded high priority to instal, repair and maintain the entire transmission and distribution system. We are now installing double-circuit high-voltage transmission line network in the problematic areas to supply reliable electricity to the customers. We have recently added more than 500 transformers in Kathmandu Valley and more than 7,000 transformers across the country. This is the transition phase. So, after the upgradation of transmission and distribution systems is completed, we will be able to supply reliable power to the consumers. However, it will obviously take some time. Additionally, after we urged the consumers to increase the use of electricity — which was aimed at gauging the actual demand in the country — we have witnessed the problem of power tripping in certain areas. But this will eventually lead to a power saturation phase, and consequently reliable supply. Currently, NEA is working to add more substations, transformers, and expand multiple high-voltage transmission line networks. However, there are certain challenges. For example, we are facing some opposition in certain areas related to land acquisition and other social issues, where the locals are not providing the land and right of way for the transmission line. Regarding power tripping in Kathmandu Valley, it is primarily because the locals of Lalitpur district are obstructing the construction of Lapsiphedi-Matatirtha-Chapagaun transmission line.

The country is scheduled to generate surplus energy from next fiscal year. How is NEA planning to manage the surplus power and increase power consumption?

From next fiscal year, additional 1,000 megawatts of electricity will be evacuated in the national grid. Basically if we are unable to upgrade the existing transmission and distribution lines, customers will be unable to consume as much electricity as they want. We have already formulated a master plan for generation, transmission and distribution of power. So, we need more financial support to implement the plan so that our capacity can be enhanced and reliable supply of power can be ensured. At present, the distribution lines in most of the industrial corridors and major cities are overloaded. So, we need to instal alternative transmission lines in those areas, but we are facing problems related to funds and land acquisition. The federal, provincial and local governments should cooperate with us so that our plan can be materialised. Once our transmission and distribution lines have been made robust, we can focus on increasing local consumption. Since energy consumption is high in urban areas, we have been focusing on them. Currently, 80 per cent of the population has access to energy. As per the government’s vision, we need to complete rural electrification within next two years and we are also working towards realising that vision. We recently sought expression of interest from global contractors to instal 50 electric charging stations across the country. The number of stations will be increased in the future, as per demand. Actually as the country is on the cusp of generating surplus energy, we should also consider shifting our mass transportation system from fossil fuel to clean energy. However, this may take some time. We have submitted a proposal to Nepal Electricity Regulatory Commission to lower the power tariff for general consumers so that they can be encouraged to use induction stoves, electric vehicles, among other electric appliances. The government must also raise the price of cooking gas. However, as industries are the biggest consumers of electricity, I believe the government should provide incentives to establish new industries across the country. Currently, the demand for electricity in the country goes up during the day and drops at night. So, we are going to synchronise our grid system with that of India to supply excess power to the Indian power market. As per the concept of energy banking with India, we will supply excess energy to India in the wet season and import equal quantum of energy in the winter season through the Dhalkebar-Muzzaffarpur cross-border transmission line.

Subsidiary firms of NEA that have been assigned different projects often miss the deadline. What is causing the delay?

As we all know, a number of projects led by NEA were affected by the earthquake in 2015 for almost two years. Similarly, some projects were affected owing to issues of contractors. However, construction of most of the NEA-led projects at present is efficient. Some projects have been delayed due to different geological issues, while some are due to weaknesses of contractors. It takes time to cope with geological issues while NEA will sort out issues related to contractors to ensure smooth project development. The primary cause of delay in NEA-led projects are the different geological surprises in the project sites and natural calamities while inefficiency of contractors and consultants has also led to delay of a few projects. Sadly, there is no instance of any hydropower project in the country being constructed on schedule.

The country has not been able to start any reservoir hydel projects. Why is it so?

Compared to run-of-the-river (RoR) and peaking run-of-the-river (PRoR) projects, reservoir projects take more time. We have finalised the 635-megawatt Dudkoshi reservoir project and we are currently dealing with the financing aspect of the project. Similarly, other reservoir projects, including Tanahu Hydro, are being constructed. However, some projects have been delayed due to social issues. Such issues have been addressed immediately through collective efforts.

The power purchase agreement of different hydel projects has been halted for almost nine months. Where actually is the problem?

The NERC must give approval to every PPA. Though NEA could take a decision regarding PPA earlier, everything related to the PPA today needs approval and authentication from the commission. Project developers have to undergo a longer procedure to get the PPA approved by the commission. The process could be expedited if the commission dealt with the policy- and tariff-related issues, while allowing NEA to deal with basic issues related to PPA on its own. Personally I believe that oversight mechanisms should simplify regulatory works instead of making them more complex.

The coronavirus outbreak has hit not only China but is spreading across the globe, including Nepal. How do you think will this affect our power generation, transmission and distribution projects as most of the contractors and equipment are from China?

The coronavirus outbreak has become a major concern for us. Most of the contractors and necessary equipment — including transformers and gas-insulated high-voltage switchgear systems being used in our hydropower projects, transmission lines, substations and distribution lines — are from China. At present, we have not been able to send our technical team to China or call the Chinese technical team to inspect our projects as per the contract agreement. As per the Chinese officials, factories have been closed down due to the fear of the coronavirus. So, it will hit our equipment supply system and there will be delays in our projects. Most of the Chinese who were working in our projects had gone home for the Chinese New Year and now they cannot return as the Chinese government has not authorised people to go abroad without their prior permission. Our projects will be affected due to shortage of technical manpower and equipment.

You are in the last year of your four-year tenure at NEA. How far have you accomplished your plans and commitments?

The day I joined NEA as its managing director, I had expressed my commitment to focus on three things — end load-shedding, make NEA profitable and make Nepal self-reliant in electricity. Interestingly, the problem related to load-shedding has been ended, NEA has started making profits and the country is almost self-reliant in hydroelectricity. Nepal is self-reliant in electricity in the wet season, while it will take some more time for the country to be self-reliant during the dry season. The import of electricity from India is in a decreasing trend — and this is despite the fact that there has been a significant rise in demand of electricity in the country. Nepal will start exporting electricity during wet season from next year while import of electricity during dry season next year will be minimal. Now the challenge remains to make Nepal’s hydropower sector reliable. Reliability of any sector depends on the reliability of the entire system in the country. Construction of transmission lines should go in line with the production of hydroelectricity. Similarly, we also need to ensure reliable distribution of electricity by developing necessary substations at different places and upgrade existing substations. The other challenge is to ensure access of every Nepali to electricity. When I joined NEA three years ago, access to electricity was at around 62 per cent of the population, against 80 per cent at present. We are preparing to announce 40 districts as districts with 100 per cent access to electricity this year. Ensuring every district with 100 per cent access to electricity is a challenge that we should focus on today.


Source: The Himalayan Post