Electricity problem in Nepal

Electricity in Nepal is on for only 16 hours a day. Nepalese are forced to live without electricity for the other 8 hours, six days a week -- 48 hours per week. Just imagine yourself living without electricity for such a long time in New York, Seoul, London and Sydney, and then realize how much the Nepalese are suffering. Is Nepal returning to the Stone Age?

Well, this is Nepal, a nation with huge hydropower potentials (on paper anyway), where the electricity supply has been overrun by a meager 720 megawatt peak load demand, which has led the Nepal Electricity Authority (NEA) to ration power (load shedding) to its customers.
Never-ending Political uncertainties, Terai unrest, acute fuel shortages, and now this mammoth electricity crisis has stolen the smiles from the faces of ordinary Nepalese, whose nation had started producing energy from water resources through Pharping hydro power plant far ahead of China. But look at Nepal today and look where China today is terms of energy security.

Fearing the possible future power crisis, China is investing $125 billion in power plants over the next five years and another $130 billion in distribution paths for the power they produce according to media reports. But China is a big and populous nation, and it needs these massive investments to keep the nation floating, you might argue. Yes, it is, but it shows how serious China is about its future power needs.

In the interim, let us turn back to Nepal. The recent load shedding has not started all of a sudden. The possible occurrence of load shedding had been forecasted by experts a few years ago, but the government, completely occupied by other complex issues such as signing the peace deal with the Maoists turned a deaf ear toward these forecasts. They either did not care or did not have the necessary vision to solve the energy problem.
And on top of this, they are giving lame excuses about the weather. It's the best option chosen by them because if you blame the weather, then the weather won't retaliate. What a scapegoat the authorities have chosen. There is a shortage of power during winter and recent load shedding suggests the need for storage projects as the system is dominated by run-of-the river projects. Thus, instead of blaming the weather, had they built storage projects then the situation would have been at least minimized. But unfortunately it was not to be so.

Normal life has been crippled by the load shedding. Ordinary people have to make plans according to the schedule of the electricity, a perfect example of man being the servant of technology.

You want to study but you cannot because there is no light; your computer never works when you want it to; your refrigerated goods rot; your rice cooker is just a show pot; your TV is just another useless tool; every now and then you get irritated by the power failure. Economically speaking constant blackouts deteriorates your production level and hampers your country's economy.

The power cuts in Nepal are not good for its growth. Lower productivity means higher costs for finished goods and people will feel that in their pockets when they visit the market. So what's going on? And why isn't it getting sorted out? The problem is grave: shortage of supply caused by a huge rise in demand.

Nepalese businesses, enterprises, communications, industries, education and service sectors have been so much hit that overall capacity utilization of the industrial units due to load shedding has come down to about 40-50 percent. This has already crippled the Nepalese economy and this is not a good sign for a nation that is trying hard to rise above poverty.

In the midst of this electricity drought, you feel depressed at times. And you feel like immigrating abroad. You curse your government, your leader and your fate and you want to go where there is light 24 hours a day. But wait, it is not just Nepal where power is a problem. There is a massive power problem is South Africa. And in recent months there have been endless reports of shortages in various countries such as Cuba, Argentina, some African nations, Iraq, Bangladesh, India and in 13 Chinese provinces.

And not to forget Queens, a city in New York, and its 100,000 or so people who were left to live without electricity for nine days in 2006. And experts fear that there is every chance of Britain being the next South Africa if immediate action is not taken. The reason is simple: Out of 59 coal-powered plants, 15 or so are out of order according to reports.

Meanwhile, we don't need an expert to tell us that electricity demand is soaring all over the world and there is a narrowing gap in usage between the developing and the emerging world. The reality is right before our eyes. Electricity demand has risen all over the world and it will continue to rise. British Petroleum forecasts electricity demand to double by 2030, and now the Kyoto protocol is encouraging countries to focus on alternative power generation.

Regionally speaking, just imagine how much power is needed to float the Chinese-Indian economy? Together China and India are the home to 40 percent of the world's population and this means the world needs more energy than it thinks.

Imagine how much power is needed for every family in China and India, and remember, economically they are growing dramatically. In 2007, India grew by 8.5 percent and China by 11.4 percent. These are good signs but also remember that growth means more prosperity and more prosperity means more power consumption.

Hence, Nepal needs less power than these rising giants. Judging by the GDP growth of its last five years, which hovered around an unhealthy average of 2.1 percent, and given the political crisis, there is every chance of its economy hovering around that average for years to come. Thus, there shall be a slight change in Nepal's total winter peak load demand of 720 megawatts as of today. But Nepal will surely grow in the future and for Nepal to grow, energy security is the ultimate precondition.

In the course of time, Nepal's economy will definitely creep toward a healthy average of 3.5 to 4 percent, given that our political uncertainties are solved. Hence, if prompt action is not taken today, then Nepal will suffer from massive power cuts in the future too.

Nepalese policymakers and leaders must wake up from their slumber to solve this mammoth crisis because Nepal has the prime resource needed to generate the electricity -- water. There is some comfort in the fact that Nepal has more than 6,000 rivers and that many of them are capable of turning the turbine and generating electricity. What Nepal needs is capital but there is a dearth of capital in Nepal, so Nepal needs foreign investment.

But finding investors is not easy and even if you find one, they may abstain from investing in hydropower because it is costly and time consuming. They have to wait for several years to refill their invested capital and then a few years more for profit. And there is this never-ending political uncertainty in Nepal followed by our lackluster policy.

Being pessimistic is a waste of time, so let us think from an optimistic point of view. But even so the picture is not that rosy. Take this example for instance: recent figures show that 154 megawatts of energy in Nepal is generated by the private sector, and the Nepal Electricity Authority (NEA) 400 watts. And add to these figures another 80 megawatts, which is in the process of being added from India. That leads to a total of about 634 megawatts. Or in other words, Nepal's total electricity capacity is 634 megawatts. But the problem for Nepal is this: During the winter season, the peak load demand for Nepal is estimated at about 720 megawatts, whereas the production is only half the total demand. There is a huge difference between supply and demand.

It's not that we are running out of solutions. We have some reliable and lasting solutions but for these we have to wait. But for how long, no one knows. And in the long run, as Keynes said we all are dead. Why this pessimism? The truth is this: No one knows the fate of the much published and talked about hydro power projects such as West Seti (720 megawatts), Upper Karnali (300 megawatts), Arun III (400 megawatts), Tamakoshi (309 megawatts), Budhi Gandaki (660 megawatts), Likhu (125 megawatts) and Super Marsyangdi (275 megawatts).

Let's play a mind game. If you add all these together, then it would lead to 2,789 megawatts. That's a healthy increase from 634 megawatts or 554 megawatts (minus 80 megawatts expected from India) and this could sustain us at least for a decade or less. But these scenarios are now limited to the papers only. No one knows when these projects shall be completed, as these projects in aggregate require huge investments and time. But unfortunately Nepal doesn't have these privileges.

And what makes the future scenario gloomy is the current policy strategy framework. No one knows what the government's electricity policy is nor does one know the real motive of the NEA. And the investor's policies are also debatable on various grounds and the risk -- political, social or infrastructural -- remains enormous. All this means that load shedding won't go away any time soon.

source: This article is written by Bhuwan Thapaliya (Bhuwan)

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