Rs 30 b went abroad for thermal energy

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    KATHMANDU, Sept 2

    energy_moneyAt least Rs 30 billion went abroad for production of electricity through captive generation (thermal energy) in the last fiscal year as the country faced up to 14 hours of load-shedding a day.

    A 200 MW project can be constructed with that amount at the rate of Rs 150 million per MW. The industrialists/entrepreneurs imported thermal plants with capacity of around 69 MW spending around Rs 5 billion in the last fiscal year alone. Around Rs 18 billion went out of the country through import of diesel and furnace oil required to operate such plants. Similarly, Rs 4.64 billion was spent on import of 746.07 million units of electricity from India, and Rs 1 billion on import of batteries, emergency lights and inverters. Import of electricity from India and thermal plants will further rise in the current fiscal year as the Nepal Electricity Authority (NEA) has projected 14 hours of load-shedding a day during this dry season. It will import 240 MW of electricity from India during the upcoming dry season. It had imported 175 MW during the last dry season.

    Thermal plants worth Rs 25 billion with capacity of around 250 MW have been imported in the past four years—56 MW in 2009, 61 MW in 2010, 64 MW in 2011 and 69 MW in 2012–due to the worsening energy crisis, according to the Trade and Export Promotion Center (TEPC). Thermal plants with capacity of around 650 MW are in operation across the country, according to the Federation of Nepalese Chambers of Commerce and Industry (FNCCI). Not just the big industries but even medium and cottage industries have started to invest in thermal plants due to the fall in production owing to the rising power cuts. Hospitals, colleges, banks and financial institutions, and public enterprises have also started to install thermal plants.

    “Over Rs 30 billion has gone abroad in import of thermal plants, diesel, furnace oil, electricity, and batteries, emergency lights and inverters for power back-up due to the worsening energy crisis,” Chairman of the Hydropower Committee of FNCCI Gyanendra Lal Pradhan stated. “Trade deficit rose by Rs 30 billion in the last fiscal year due to load-shedding,” he claimed and revealed that Rs 25 has to be spent on generation of a unit of electricity through thermal plants. “The industrialists have been forced to buy thermal plants due to the extended period of power cuts. The cost will further rise this year due to the appreciation of US dollar,” he added. “Importing electricity from India will be a cheaper option than spending on such plants,” he reasoned.

    Pradhan attributed the rise in import of thermal plants to cement factories and claimed that a cement factory requires a thermal plant of at least 10 MW capacity. “Construction of hydropower projects is the long-term solution of this problem,” he stated. “Load-shedding can be reduced as more investment can be attracted to the hydropower sector if the projects were given discount on value-added tax (VAT) and more returns through power purchase agreement. But the state has not paid attention toward that,” he complained.

    Professor at the Energy Study Center of Tribhuvan University (TU) Amrit Man Nakarmi stressed on the need for increasing investment on energy and said that billions of rupees go abroad every year from Nepal as much less investment is made in the sector in comparison to our South Asian neighbors Bhutan and India. He revealed that 16 percent of the gross domestic product (GDP) of Bhutan has been invested in the sector, 3.4 percent in India and mere 0.3 percent In Nepal. He said that traditional forms of energy contribute more to energy consumption in the country and claimed that 87 percent of energy we consume is still obtained from firewood and other organic materials.

    Source : Karobar daily