Private sector seeks more role in energy sector

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February 27, 2020

Kathmandu:The country’s private sector has asked the government to clearly define its role in the upcoming law.

Speaking at an interaction on the draft of Electricity Bill organized by Energy Development Council (EDC) and USAID’s Nepal Hydropower Development Project (NHDP) in Lalitpur on Wednesday, Guru Prasad Neupane, chairman of Api Power Company Ltd, said that the government should clearly define private sector’s role in hydropower developing in the upcoming act. “There are no forums where the private sector can put forward their concerns. Active participation of private sector should be ensured in each and every part of the hydropower sector,” he added.

The draft bill mentions about electricity generation, but is silent on other issues like transmission, distribution and trading, participants of the interaction said. Stating that there is monopoly of Nepal Electricity Authority (NEA) in transmission line sector, they said the upcoming law should unbundle it from the NEA.

As the country is preparing for energy trading with Bangladesh and China along with India, they said that the private sector wants to play an effective role in energy trading as well.

Neupane said that the draft bill fails to differentiate between domestic and foreign investors. “Though the bill proposes handing over licensing rights of projects below 20 MW to provincial government, there are no infrastructures at the provincial level yet,” he said, adding: “We will have to face problem as soon as this law comes into effect. It will be impossible to work that way.”

As per the bill, the concerned authority will have to decide on the license for electricity generation within 15 days of receiving applications and supporting documents. Similarly, timeframe for deciding on licenses for electricity transmission or distribution electricity trade is 120 and 45 days, respectively.

Also speaking at the program, Ram Prasad Dhital, spokesperson at Electricity Regulatory Commission, said that the draft bill has tried to introduce competition in power generation sector. “Electricity is both an essential service and a tradable commodity, so it should be treated accordingly,” he said. “Licensing mechanism should be taken care by an independent organization, whereas the government system should prepare a framework for legal policy to protect the investment,” Dhital added.

Kedar Karki, a hydropower developer, said that the provision to lower license validity period will put public investment at risk. “Why did the government feel it necessary to reduce validity period?” he questioned.

The draft bill has proposed to lower license validity to 40 years which is 10 years lower than what has been provisioned in Electricity Act, 2049 BS. The licensee generating energy from sectors other than hydropower can operate the project for 25 years.

According to the existing act, the term of license to be issued for generation, transmission or distribution of electricity is a maximum of 50 years.

 

Source: My Republica