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Vidhyut Utpadan Company Limited: Hydropower Projects in Nepal

Posted by Suman Budhathoki on May 30, 2017 at 6:45 AM Comments comments (0)

Vidhyut Utpadan Company Limited (VUCL) was formally established on November 20, 2016 following Government of Nepal’s decision. Mr. Mohan Raj Panta has been appointed as the CEO of this company. The authorized capital of VUCL is Rs. 20 billion and its issued capital is Rs. 10 billion, while the paid-up capital is Rs. 2 billion. Out of its total paid-up share capital, 71% is promoters' share and 29% is public share. Its major shareholders and shareholding pattern is as follows. S.N. Shareholders Amount [NPR] % of Total Share Capital 1 Ministry of Energy 400,000,000 20% 2 Ministry of Finance 100,000,000 5% 3 Ministry of Law, Justice and Parliamentary Affairs 100,000,000 5% 4 Nepal Electricity Authority 200,000,000 10% 5 Employees Provident Fund 200,000,000 10% 6 Citizen Investment Trust 100,000,000 5% 7 Jalvidhyut Lagani Tatha Bikas Company Limited 80,000,000 4% 8 Nepal Doorsanchar Company Limited 200,000,000 10% 9 Rastriya Beema Sansthan 40,000,000 2% 10 General Public 340,000,000 17% 11 Project-affected local people* 200,000,000 10% 12 Under-privileged people 40,000,000 2% Total 2,000,000,000 100% *Open to the general public in the main company, structure applicable only for subsidiary projects The Initial Public Offering (IPO) for public subscription of shares is yet to happen. VUCL has applied for Survey License to Department of Electricity Development (DoED) for the following Hydropower Projects on May 19, 2017 with an intention to complete the feasibility studies within 2 years. • Bheri 1 HEP 617 MW • Lower Arun HEP 627 MW • Jagdulla HEP 307 MW • Kimanthan Arun HEP 450 MW


Posted by Suman Budhathoki on May 30, 2017 at 6:45 AM Comments comments (0)

National Priority Project: Upper Tamakoshi: NPR 50 crore budget has been allocated. Completion period within upcoming FY. Budhigandaki HEP: NPR 10 arba 17 crore has been allocated. (However, the Cabinet has approved China Gezhouba Group on May 23, 2017 to construct this Project in EPC+F model). Energy Sector (NPR 62 arba 47 crore) • Under “Ujjyalo Nepal” program 17,000 MW will be generated within 7 years • Fund from Civil Service employees, Nepal Army, Nepal Police Armed Police Force, Teachers and including Government employees will construct at least 500 MW Hydropower Project • Chameliya HEP (30 MW) and Kulekhani III (14 MW) within upcoming FY • Peaking and storage Projects will get new tariff • Nalsing Gad (410 MW), Bheri 1 (617 MW), Jagdulla (307 MW), Uttarganga (300 MW), Naumure (300 MW), Sunkoshi-2&3 (1110 MW), (536 MW), Dudhkoshi (300 MW), Tamor (662 MW) will be developed in parallel • In order to attract private companies in the construction of Transmission Line, PPP model will be implemented • Dhalkebar Substation to be upgraded to 400 kV • Butwal to Gorakpur X-border Transmission Line will be started in upcoming FY • Under Construction 400 kV Hetauda-Dhalkebar-Duhabi will be completed within 2 years • Underground power cable laying will be done in some of the parts in Kathmandu • Smart meter will be installed in Households for Distributed Energy Generation • Kathmandu Valley Distribution System will be upgraded

Posted by Suman Budhathoki on May 9, 2017 at 11:05 PM Comments comments (0)
PPA rate of HPPs Nepal

Nepal: 2016 Hydropower report: IHA

Posted by Suman Budhathoki on May 15, 2016 at 5:45 AM Comments comments (0)

Nepal is also expected to become a net exporter to the Indian market, but Nepal currently suffers energy shortages and frequent blackouts. For example, the shortfall in electricity supply to meet domestic load requirements was about 410 MW in late 2013, when peak demand reached 1,202 MW. This led to blackouts of up to 14 hours a day. Nonetheless, Nepal is blessed with significant hydropower resources. Nepal’s theoretical hydropower potential has been estimated to be around 84,000 MW, of which 43,000 MW has been identified as economically viable. Currently, Nepal’s installed hydropower capacity is 753 MW. Although Nepal suffers from regular energy shortages, the available hydropower resources could provide a large surplus if strategically developed with a view to foster regional energy trade. Therefore, Nepal will follow a similar path to Bhutan, with the view of becoming a net exporter to the Indian market, as well as Bangladesh. The first large-capacity interconnection between India and Nepal (1,000 MW) was completed in February 2016, and is now importing 80 MW at 132 kV. The Nepal Electricity Authority (NEA) plans to charge the capacity of the line to 220 kV in the next five to six months, and the line is expected to be charged at its full capacity of 400 kV by September 2017. The project is being supported by the World Bank, which has committed USD 138 million in financing. 2015 saw Nepal connect over 45 MW of hydropower to the national grid, including the Mai Khola hydropower (22 MW), Nau Gad Khola (8.5 MW), Upper Hugdi Khola (5MW), Andhi Khola (4.3 MW; capacity addition), Jiri Khola (2.4 MW), Upper Puwa 1 (3 MW) and Belkhu Khola (0.5 MW). This project will provide relief from load-shedding in the eastern region of the country. The Nepal Electricity Authority (NEA) is also developing the 7 MW Mai cascade hydropower project, which is nearing completion. The Mai Khola plant will discharge into the intake of the Mai cascade hydropower project, which ultimately discharges back into the Mai Khola River. A further seven projects in Nepal are scheduled to be completed in the first half of 2016. Many of these projects were expected to come online in 2015, but were delayed due to the April–May earthquakes in the country. The delays were further exacerbated due to the border blockade and Madhesi movement, which is limiting muchneeded fuel to complete construction works. The projects expected to be completed are: Upper Marsyangdi (50 MW), Chameliya (32 MW), Upper Made (19 MW), Kulekhani III (14 MW), Hewa Khola (14 MW), Thapa Khola (11 MW) and the Pikhuwa Khola (2 MW). In February 2016, Nepal’s government declared 2016–26 the “national energy crisis reduction and electricity development decade”, with ambitious targets to end the current power shortages within three years and to spearhead further development in the hydropower sector. POPULATION 28,175,000 INSTALLED HYDROPOWER CAPACITY 753 MW GDP USD 20 BN HYDROPOWER GENERATION 3,635 GWh Source: IHA 2016

Total Existing Hydropower Projects in Nepal, 2014/2015

Posted by Suman Budhathoki on August 13, 2015 at 6:20 AM Comments comments (0)

Projects under Operation

S No Project Installed Capacity [MW] Promoter District

1 Khimti -I 60 Himal Power Limited (Dolakha & Ramechhap)

2 Devighat 14.1 Nepal Electricity Authority (Nuwakot)

3 Gandak 15 Nepal Electricity Authority (Nawalparasi)

4 Kulekhani-I 60 Nepal Electricity Authority (Makawanpur)

5 Kulekhani-II 32 Nepal Electricity Authority (Makawanpur)

6 Marsyangdi 69 Nepal Electricity Authority (Tanahu)

7 Panauti 2.4 Nepal Electricity Authority (Kabhrepalanchok)

8 Seti 1.5 Nepal Electricity Authority (Kaski)

9 Sun Koshi 10.05 Nepal Electricity Authority (Sindhupalchok)

10 Tatopani 2 Nepal Electricity Authority (Myagdi)

11 Tinau 1.024 Nepal Electricity Authority (Palpa)

12 Trishuli 24 Nepal Electricity Authority (Nuwakot)

13 Andhi Khola 9.4 Butwal Power Company (Syangja)

14 Jhimruk Khola 12.5 Butwal Power Company (Pyuthan)

15 Puwa 6.2 Nepal Electricity Authority Ilam N.P. (Ilam)

16 Modi Khola 14.8 Nepal Electricity Authority (Parbat)

17 Kali Gandaki A 144 Nepal Electricity Authority (Syangja)

18 Upper Bhotekoshi 45 Bhotekoshi Power Company (Sindhupalchok)

19 Chilime 22 Chilime Hydropower Company Limited (Rasuwa)

20 Indrawati -III 7.5 National Hydropower Company Pvt. Ltd. (Sindhupalchok)

21 Madhya Marsyangdi 70 Nepal Electricity Authority (Lamjung)

22 Piluwa Khola 3 Arun Valley Hydropower Development Company Pvt. Ltd. (Sankhuwasabha)

23 Sunkoshi Small 2.5 Sanima Hydripower Pvt.Ltd (Sindhupalchok)

24 Mailung Khola 5 Mailun Khola Hydropower Company Pvt. Ltd (Rasuwa)

25 Chaku Khola 3 Alliance Power Nepal P.Ltd (Sindhupalchok)

26 Khudi Khola 3.45 Khudi hydropower limited (Lamjung)

27 Thoppal Khola 1.65 Thoppal Khola Hydropower Company (Dhading)

28 Mardi Khola 4.8 Gandaki Hydropower Development Co. P. Ltd (Kaski)

29 Ridi Khola 2.4 Ridi Hydropower Development Co P Ltd (Palpa)

30 Mai Khola 4.5 Himal Dolkha Hydropower Co Ltd (Ilam)

31 Hewa khola 4.455 Barun Hydropower Development Co. Pvt. Ltd (Sankhuwasabha)

32 Lower Chaku Khola 1.8 Laughing Buddha Power Nepal Pvt. Ltd (Sindhupalchok)

33 Sipring Khola 9.658 Synergy Power Development P Ltd (Dolakha)

34 Lower Modi -1 10 United Modi Hydropower Pvt. Ltd. (Parbat)

35 Bhairab Kund Khola 3 Bhairabkund Hydropower Pvt. Ltd. (Sindhupalchok)

36 Siuri Khola 4.95 Nyadi Group Pvt Ltd (Lamjung)

37 Ankhu Khola - 1 8.4 Ankhu Jalvidut Co. Pvt. Ltd (Dhading)

38 Baramchi Khola HPP 4.2 Unique Hydel Pvt Ltd (Sindhupalchok)

39 Bijayapur-1 4.41 Bhagawati Hydropower Development Company (Kaski)

40 Charnawati Khola Hydroelectric Project 3.52 Nepal Hydro Developer Pvt Ltd (Dolakha)

41 Middle Chaku Khola 1.8 Laughing Budha Power Nepal (Sindhupalchok)

42 Radhi Khola 4.4 Radhi Bidyut Co. Ltd (Lamjung)

43 Tadi Khola (thaprek) 5 Aadi Shakti Bidhut Bikash Co. P. Ltd (Nuwakot)

44 Syange Khola 0.183 Syange Bidyut Company Ltd (Lamjung)

45 Rairang Khola 0.5 Rairang Hydro Power Development Co. (P) Ltd. (Dhading)

46 Sisne Khola 0.75 Gautam Buddha Hydropower (Pvt) Ltd (Palpa)

47 Sali Nadi 0.25 Kathmandu Small Hydropower Systems Pvt. Ltd. (Kathmandu)

48 Pheme Khola 0.995 Khoranga Khola Hydro Power Co. Ltd. (Panchtar)

49 Pati Khola 0.996 Unified Hydropower (P) Ltd. (Parbat)

50 Seti-II 0.979 Task Hydropower Company (P) Ltd. (Kaski)

51 Upper Hadi Khola 0.991 Centre for Power Dev. And Services (P) Ltd. (Sindhuplachowk)

52 Lower Piluwa 0.99 Baneshor Hydropower Develoopment Pvt. Ltd. (Sankhuwasabha)

53 Chotte Khola 0.993 Pashupati Environmental Eng. Power Co. Pvt. Ltd. (Gorkha)

54 Upper Puwa-1 Hydropower Project 3 Joshi Hydropower Development Company Pvt. Ltd. (Illam)

55 Mai Khola 22 Sanima Hydripower Pvt.Ltd (Illam)

56 Jiri Khola 2.2 Bojini Company Private (Dolkha)

57 Upper Hugdi Khola 5 Ruru Jalbidhyut Pariyojana Pvt. Ltd. (Gulmi)

58 Pharping*** 0.5 Nepal Electricity Authority (Lalitpur)

59 Sundarijal 0.64 Nepal Electricity Authority (Kathmandu)

60 Fewa 1 Nepal Electricity Authority (Kaski)

61 Jomsom 0.24 Nepal Electricity Authority (leased to Private) (Mustang)

62 Chatara 3.2 Nepal Electricity Authority (Sunsari)

63 Baglung*** 0.2 Nepal Electricity Authority (Baglung)

64 Khandbari 0.25 Nepal Electricity Authority (leased to Private) (Sankhuwasabha)

65 Surnaiyagad 0.2 Nepal Electricity Authority (Baitadi)

66 Ramechhap 0.15 Nepal Electricity Authority (Ramechhap)

67 Terathum 0.1 Nepal Electricity Authority (leased to Private) (Terathum)

68 Doti*** 0.2 Nepal Electricity Authority (Doti)

69 Gamgad 0.4 Nepal Electricity Authority (Mugu)

70 Phidim 0.24 Nepal Electricity Authority (leased to Private) (Panchtar)

71 Belkhu 0.518 Prime Hydropower Co. Pvt. Ltd. (Dhading)

Total 766.032

Isolated NEA Projects

S No Project Installed Capacity [MW] Promoter District

1 Dhankuta*** 0.24 Nepal Electricity Authority (Dhankuta)

2 Jhupra*** 0.345 Nepal Electricity Authority (Surkhet)

3 Gorkhe*** 0.064 Nepal Electricity Authority (Illam)

4 Jumla 0.2 Nepal Electricity Authority (leased to Private) (Jumla)

5 Dhading*** 0.032 Nepal Electricity Authority (Dhading)

6 Syangja*** 0.08 Nepal Electricity Authority (Syangja)

7 Helambu 0.05 Nepal Electricity Authority (Sindhupalchowk)

8 Darchula 0.3 Nepal Electricity Authority (leased to Private) (Darchula)

9 Chame 0.045 Nepal Electricity Authority (leased to Private) (Manang)

10 Taplejung 0.125 Nepal Electricity Authority (leased to Private) (Taplejung)

11 Manang 0.08 Nepal Electricity Authority (leased to Private) (Manang)

12 Chaurjhari 0.15 Nepal Electricity Authority (leased to Private) (Rukum)

13 Syaprudaha 0.2 Nepal Electricity Authority (leased to Private) (Rukum)

14 Bhojpur 0.25 Nepal Electricity Authority (leased to Private) (Bhojpur)

15 Bajura 0.2 Nepal Electricity Authority (leased to Private) (Bajura)

16 Bajhang 0.2 Nepal Electricity Authority (leased to Private) (Bajhang)

17 Arughat 0.15 Nepal Electricity Authority (Gorkha)

18 Okhaldhunga 0.125 Nepal Electricity Authority (Okhaldhunga)

19 Rupalgad 0.1 Nepal Electricity Authority (Dadeldhura)

20 Achham 0.4 Nepal Electricity Authority (Achham)

21 Dolpa 0.2 Nepal Electricity Authority (Dolpa)

22 Kalikot 0.5 Nepal Electricity Authority (Kalikot)

23 Heldung 0.5 Nepal Electricity Authority (Humla)

Total 4.536

Isolated AEPC Funded and IPPs' Projects

SN Type No. Installed Capacity [MW]

1 Pico Hydro (≤ 5kW) 1626 3.70446

2 Micro Hydro (>5 kW & ≤100 kW) 1152 22.83062

3 Mini Hydro (>100 kW & ≤ 1MW) 40 14.948

Total 2818 41.48308


a. Nepal Electricity Authority, Annual Report 2014

b. Nepal Electricity Authority, PPA Department

c. Department of Electricity Development

d. Alternative Energy Promotion Centre

The Main Reason For Power Crisis in Nepal Is Because

Posted by Suman Budhathoki on May 17, 2015 at 6:35 AM Comments comments (0)

Sujit Acharya is the CEO of IDS Energy – Nepal’s only integrated hydropower company in Joint Venture with one of the world’s largest hydropower development and consulting companies and the only hydropower company in Nepal to have developed a hydropower project in India. He recently served as the youngest board member of the Nepal Electricity Authority and is a student of special studies in Management of Harvard University, USA. He graduated from Bentley College, USA with a degree in Finance. He can be contacted at [email protected] What may be the role of private sector in hydropower in Nepal? The role of the private sector in hydropower sector is immense – especially when we talk in the context of Nepal because we have 200,000 MW of hydro potential. Hydropower in Nepal cannot be built optimally and effectively without the private sector. Even today, in this absolutely horrible economic climate with no friendly policies and incentives to the private sector, it has generated more than 40% of the total hydroelectricity of Nepal. Additionally, most of the major hydropower projects in Nepal are now being constructed by the private sector – with the exception of the Upper Tamakoshi project. The private sector does things for a profit – and to make profit one must be cost effective. Therefore, the hydropower plants it builds are very cost effective – which means the cost of generating electricity from its hydro plants will be lower and this lower cost means the consumer gets to enjoy electricity for a lower price. The reason electricity is costly in Nepal is solely because of the Government’s complete incapability to manage its costs and make terrible decisions like buying energy from private sector projects like Khimti and Bhotekoshi at an unreasonable price. Secondly, while the private sector will create lots of jobs, it is the high quality of hydropower professionals it will churn out that is vital for the proper growth of hydropower sector. Smart, thorough and intelligent decision makers will arise from the private sector versus from the Government where it seems politicians and bureaucrats are competing with each other for being more corrupt than the other. What role the government has then? This does not mean that the Government has no role in hydropower – it has a very important role too. For example, the private sector will never build very costly hydropower plants unless there are incentives. In such circumstances, it is the responsibility of the Government to build such plants because the citizens in that area also need electricity – even if it costs more to generate that electricity. There is a school of thought that thinks the role of the private sector compared to the government is not important – and another school of thought thinking exactly the opposite. Both mindset groups are extremely mistaken. Both have very important, distinct and non-competing roles. Do you think that the Nepalese private sector can construct the national demand? What incentives should they get from the government side during this upcoming supplementary budget? Only the private sector can construct the national demand and exceed it. This is the fact. This is the 100th year of birth of hydropower in Nepal – and we are facing load shedding because of the government’s bankruptcy in vision and incapability in rapid implementation. The private sector stepped in approximately 20 years ago and has almost equaled what the government has done in the last 100 years. Imagine if proper incentives had been introduced – I would not even have to answer this question. The upcoming supplementary budget can only provide short term relief – it is not the proper tool to encourage hydropower development in Nepal sustainably. This must be done by correcting the absolutely horrendous version of a draft Electricity Act that is currently tabled in Parliament. If the current version passes, the hydropower sector of Nepal will be doomed. However, as short term relief, the new Finance Minister needs to immediately waive off both VAT and Customs Duties or offer complete reimbursement of such taxes and duties. I know the finance ministry currently houses high level decision makers who think this will reduce the government’s budgeted revenue from tax collections. Such people are the ones bankrupt in vision and holding this nation hostage to development. If this school of thought prevails, very soon such decision makers will be writing the upcoming budget speeches under candle light. These people need to know that the globally accepted norm is that hydropower is taxed after it is constructed and pays off its loans by governments – and not before it takes off. Maybe they never read the story of the man who killed his goose that laid golden eggs. These duty and tax waivers can only happen if the new Finance Minister has the guts to overrule these bankrupt decision makers and make the right call. As an entrepreneur, what are the major problems faced by the private sector in hydropower in Nepal? The private sector is fed up dealing with people in the government and lawmakers that are bankrupt in vision, ideas and knowledge. Their ignorance has held hostage the development of hydropower in Nepal. At this juncture, the most important problem of the private sector is amendment of the draft Electricity Act to ensure it is also private sector friendly. This Electricity Act is the constitution for hydropower in Nepal – and if the lawmakers pass the wrong version, hydropower development is bound to be doomed once again. All lawmakers are requested to read the latest copy of the Electricity Act in India and in Bhutan (who will compete with Nepal to get private investment) and then ratify an Electricity Act that is at least at par with these countries. If they cannot get their hands on these Acts, I will personally make it available. Secondly, we request the Government to get its collapsing house in order. As the NEA is bankrupt and about to collapse, it is most urgent a new separate Transmission Line Authority is set up immediately to ensure transmission lines are built. If this is not done, and the NEA collapses, who will build transmission lines in Nepal? – Without which hydropower projects cannot be developed which in turn means more load shedding for all of us. Nepal is reeling under power crisis and it is learnt that this will continue for some time. What are the major reasons for this? The main reason for power crisis is because there is Vision Crisis of how to properly develop the power sector of Nepal within the Government. How else can we explain a country like Nepal having approximate 200,000 MW of hydroelectric potential developing less than 0.5% of this potential in the last 100 years when the first hydropower station began operation in Pharping? How else can we explain the Government continually leaving the entire development of the hydropower sector at the mercy of a bankrupt monopoly utility i.e. Nepal Electricity Authority which has never built even one power project on time, within the stipulated cost or generated the estimated energy it is supposed it generate? And how else are we to explain a Government that continues to look helplessly at its students are not being able to study properly because of no electricity for their SLC exams thereby scoring poorly or even failing and destroying their careers or a patient dying in a hospital which cannot administer treatment through medical equipment because of load shedding – are these not tantamount to crimes committed by the Government on its citizens? Why is hydropower so important for Nepal? Electricity is the backbone of any nation’s economy. You cannot do anything without electricity in today’s world. You cannot build roads without providing electricity – neither can you impart proper education to your citizens without having electricity. None of your tourism plans will become successful without electricity; neither will you be able to provide health services to sick citizens without electricity. Your industries will not run, you cannot watch TV’s, neither can you pump water into your farmlands without electricity. For every 1% economic growth to happen, it must be supported by 1.5% energy growth. The importance of having electricity today is above politics, which is why you see even adversarial nations like India and China joining hands to secure various forms of energy from even the most troubled regions of the world. How important hydropower is? Because hydropower so far is the only form of commercially feasible electricity in Nepal, it cannot just be labeled as so important for Nepal but rather as the single most important sector for Nepal. Besides providing electricity to power our entire nation and its development, the mass abundance of hydropower here has the ability to completely uproot poverty from the life of each and every Nepali citizen – because we can sell this abundance of electricity for billions of dollars on a yearly basis to the two largest economies desperately in need of this commodity i.e. India and China. But so far this has not happened because of the bankruptcy of vision that exists in terms of developing our hydropower within our government, the ability of politicians to continually fool us that we need political resolution before economic development and the inability of us Nepali’s to realize that we are being completely fooled by them. How can you say that Nepali citizens are being fooled by politicians? I want to first ask every Nepali citizen reading this interview whether they want to continue to remain poor for the rest of their lives? Secondly, I want to ask them if they want to continue to see this poverty transferred in the lives of their children? If the answers to both these questions are NO, then they should understand one thing clearly – we cannot wait for our lives to be held hostage to politics. Arthik Kranti has to happen now and not later on. Have you not seen for years on your TV screens news about a country like Israel facing tremendous political turmoil for years continually progressing economically – so why do we have to wait? But Nepalese politicians continually fool us common Nepali’s that economic development can only happen after political resolution – and we allow them to fool us. Please tell me if a man in his late 70’s is Syangja with no electricity can wait for politicians to resolve their disputes in order for electricity to reach his house – he might die waiting for their disputes to end. An industry in Biratnagar employing thousands of workers cannot wait for politicians saying “Arthik Kranti” will happen after the nation sees a political change – because the livelihoods of those thousands of workers and their children depend on that factory running properly NOW and not later on after political resolution. Why electricity is matter? Without electricity reaching that factory now, it will not run properly and those workers will be laid off. The mind of the entire nation has been held hostage with politics. And this is the main reason why we are poor – it is because we continue to allow politics to seep into our lives on a daily basis. That is why we suffer from no electricity, no water, no jobs, no good roads, and no self esteem. The biggest problem facing Nepal is poverty – this is the root of all major problems and uprooting this will be the solution to many problems. Therefore, I appeal to all Nepali’s to ask themselves whether the flag they are holding in their hands shouting for change is the right one? The flag I want to hold in my hand is of economic change – and this flag has no political color. Holding this flag ensures my children will not have to use candles to study for their SLC exams, that we will have proper roads built through which our farmers can transport their products throughout the country and internationally to sell it at the best prices, that we do not have to ever act as beggars in front of foreign countries for loans and grants at their terms and conditions – because the spirit of a Nepali is much more than this…it is about being independent, self sufficient and wanting to always win. So if this is the case, how can we as a nation develop our hydropower rapidly and successfully to transform our lives out of poverty? Generally speaking we need to bring about 3 types of transformation immediately i.e. Understand that hydropower is the backbone of our economy and main ticket item out of poverty Understand that our government and political parties are completely bankrupt in their vision and abilities to develop hydropower Apply pressure to bring about complete change in developing these resources systematically and inclusively but without obstructing any activity that consists of development of hydropower (which should be labeled as a severely punishable crime) Technically speaking, the following 5 things need to be addressed immediately: The upcoming Electricity Act tabled in the Parliament needs to contain key changes that ensures hydropower will develop rapidly and inclusively; An independent Transmission Line Authority needs to be set up immediately; The licensing policy at the Department of Electricity Development needs to change to attract upfront premiums from the highest bidder to prevent brokers (key obstacles to hydropower development) from hijacking the nations single most important economic resource; The energy planning data of Nepal needs to be updated to address today’s market situation; Nepal Electricity Authority needs complete transformation so that it can run as a profit-making entity. Can you please explain what needs to change in the proposed Electricity Act? The drafters of the proposed Electricity Act and parliamentarians need to understand that if it is implemented in its current form it will fail just like its predecessor because it is almost a carbon copy of that act albeit a few changes. This proposed Act if passed in its present form in parliament will lead Nepal again into darkness just as the past 100 years have done so. Therefore, lawmakers need to do a lot of work in ensuring hydropower is not doomed again. The major changes to be inculcated are: (i) project licenses needs to be given for at least 40 years from C.O.D on a BOOT basis (ii) All taxes and duties exempt for 10 years after C.O.D (iii) Capacity Royalty should be calculated from the day the project starts generating electricity (iv) A minimum 5 year non-bail able jail term handed out swiftly to anyone obstructing the construction and operation of hydropower and transmission line projects and (v) Transmission lines to be built solely by a new government owned Transmission Line Authority of Nepal and not the NEA. These minimum changes are required because Nepal’s competitors like India and Bhutan offer these and better incentives to all parties interested in developing hydropower in their countries. If we do not offer these minimums why should any investor (foreign or domestic) want to develop a hydropower project in Nepal when they can simply do it in India or Bhutan? Our proposed Act is not even at par with these competitor countries. This is what I meant by bankruptcy in vision of our policy makers in drafting this proposed Electricity Act – they have not even read our competitors current electricity acts. Why do you think we need an independent Transmission Line Authority? What one needs to understand is that a transmission line is like a road – on which electricity travels. Therefore, just like we cannot drive cars if there are no roads we cannot use the generated electricity without developing transmission lines. An independent Transmission Line Authority needs to be immediately set up because this is the major implementation hurdle to hydropower development. There are not enough transmission lines up in the country to evacuate power from various hydropower projects that can be developed right now – which means that while we can bring more electricity online faster we are not being able to do it because of transmission line unavailability. We don’t even have a transmission line available to import electricity right now to immediately solve our load shedding problems The Nepal Electricity Authority had proven it is unable to developing transmission lines rapidly because it also other areas of focus too i.e. to develop projects like Tamakoshi and distribute generated electricity from such projects to various retail consumers. That is why we have load shedding today. Therefore, leaving the development of transmission lines in the hands of a utility that has other areas to focus on is simply continuing to put the brakes on the pedal of hydropower development. Why do we need independent Transmission Line Authority? If an independent Transmission Line Authority is set up it will only have one focus area i.e. to develop transmission lines throughout the country. This will ensure the rapid development of transmission lines – which means that developers of hydropower can bring their shelved projects online faster. Even the NEA could operate more efficiently as it would have a less diluted focus. Of course, the organizational set up of the Transmission Line Authority needs to be very different from the setup of the NEA to ensure it will not be another debacle like the NEA. While the ownership of the Transmission Line Authority should be 100% government owned, the Board of Directors should consist of people who understand how to run a Transmission Authority profitably, each member of the board should have an equal voting right on decisions, the chairman of the board should be appointed by the board members on basis of the vote and the C.E.O of the Authority should be selected through international competitive bidding under a strict terms of reference for a specific term by the board. Most importantly, no politician or minister should be a part of this authority and all political appointments should be banned. Finally, can you expand a little on the changes you propose in the licensing policy, the energy planning date and the NEA? I have spoken at lengths about how the current licensing policy at DOED is causing billions of dollars of loss to our nation. My point was recently proven right when the DOED finally decided to tender 8 projects and allot them to technically qualified bidders who offered the highest money for these licenses to the DOED. One successful bidder bid 26 crores for a 40 MW project and the minimum price a successful bidder paid was 20 lacs per MW. The DOED should take this minimum price of 20 lacs per MW it received and tell all the applicants who have applied for licenses that this is the new price they need to pay for the projects they have applied. This will fetch the DOED more than 8000 crores (more than the entire budgeted income of the country) and also get Nepal rid of the hydropower license brokers who have placed their bets on hijacking these licenses and then reselling it to the real developers. The recent tender by the DOED has proven 8000 crores of revenues through licensing can be made – and if they still do not use this example to modify the policy, I hope the monitoring bodies of Nepal like the CIAA can direct them to make such changes immediately. How do you see energy planning data? Regarding the energy planning data, who says we have 83,000 MW? Please show me one document that states this. Who says we have 6000-8000 rivers in our country…please provide me one document that proves this. These data are all either incorrect or from another era decades ago. We need to update our data to current levels to understand exactly how much hydropower resources we have (in my opinion 200000 MW but a general survey of Nepal’s hydropower resources need to be conducted) so that we can devise strategies to develop these resources optimally (updated basin planning and allotment of licenses based on these updated basin plans, etc) and market them strategically to investors. What do you want to say about NEA? Finally, as I have served as a board member of NEA recently, I understand that two kinds of changes are required to transform this entity from a bankrupt, corrupt and incompetent one into a profitable, transparent and efficient one. Externally, the Govt. of Nepal needs to stop interfering with the NEA so that it can make its independent decisions thereby actually running as an autonomous institution that it was supposed to be. Cabinet decisions like waiving-off demand charges that had to be implemented by the NEA caused it a 1 billion rupee loss instantly. The Finance Ministry acting like a commercial bank by taking soft loans at a lower interest rate and lending it back to NEA at a higher interest rate needs to also stop. Internally, the Board of Directors of NEA should not be political appointees but rather selected from different sectors based on strict evaluation, each board member should have equal voting right on the decision, the chairman of the board should be appointed by a majority vote of the board members and the managing director selected via international competitive bidding. And most importantly, the Energy minister or any politician should not be a member of the board or its chairman. It has to be left in the hands of techno-commercial people to ensure it runs as a profit making entity. Source : Spotlight Nepal

Proposed tariff for PPA>25 MW

Posted by Suman Budhathoki on January 5, 2015 at 1:55 AM Comments comments (0)

News २५ मेगावाट माथिका आयोजनामा पीपीए दर सिफारिस काठमाडौं : विद्युत् प्राधिकरणले २५ मेगावाटभन्दा माथिका जलविद्युत् आयोजनाको विद्युत् खरिद दर सिफारिस गरेको छ। यसअघि दुईपक्षीय वार्ताका आधारमा खरिद दर निर्धारण गर्ने प्रावधान रहेकोमा विद्युत् प्राधिकरण सञ्चालक समितिका सदस्य मनोजकुमार मिश्रा संयोजक रहेको समितिले २५ मेगावाटदेखि सय मेगावाटसम्मको विद्युत् खरिद सम्झौता (पीपीए;) दर सिफारिस गरेको हो। मिश्राले ऊर्जामन्त्री राधा ज्ञवालीलाई आइतबार मन्त्रालयमा बुझाएको सिफारिस प्रतिवेदनमा हिउँदयाममा प्रतियुनिट आठ रु पैयाँ ४० पैसा र बर्खायाममा चार रुपैयाँ ८० पैसा हुनुपर्ने उल्लेख छ। यस्तो दरमा प्रत्येक पटक तीन प्रतिशतका दरले आठ पटकसम्म मूल्यवृद्धिको सुविधा हुनेछ। आयोजनाको लागतअनुसार पहिलोपटकको पीपीएमा मूल्यवृद्धि हुने वा घट्ने गरी प्रावधान राखिएको छ। यसअनुसार आयोजनाको लागत प्रतिमेगावाट १८ करोड ४० लाख रु पैयाँलाई आधार मानेर आठ पटकसम्म मूल्यवृद्धि गर्न दिइने गरी सिफारिस गरिएको संयोजक मिश्राले जानकारी दिए। स्वतन्त्र ढंगले स्थापित नियमनकारी संयन्त्रले आयोजनाको लागत पुनरावलोकन गरी त्यसअनुसार पीपीएमा मूल्यवृद्धिको दिने/नदिने सिफारिस गर्ने प्रावधान राखिएको छ। मिश्राका अनुसार १६ करोड रुपैयाँ प्रतिमेगावाट लागत रहेको निक्र्योल नियमनकारी संयन्त्रले उल्लेख गरेमा त्यस्ता आयोजनाले पाँच पटकसम्म मात्र मूल्यवृद्धि पाउनेछन्। '१८ करोड ४० लाख प्रतिमेगावाट नाघेमा थप तीनपटक गरी पीपीए अवधिभरि बढीमा ११ पटक मूल्यवृद्धि पाउनेछन्', मिश्राले अन्नपूर्णसित भने, 'यस्तो प्रावधान पीपीएकै इतिहासमा पहिलो पटक हुनेछ।' यसैगरी प्राधिकरणले व्यापारिक उत्पादन भइसकेपछि प्रसारण लाइन निर्माण नगरे ४५ प्रतिशत क्षतिपूर्ति तिर्ने समितिले सिफारिस गरेको थियो। समितिले यस्तो क्षतिपूर्ति ५० किस्तामा तिर्न सकिने सुविधा पनि सिफारिस गरेको छ। नेपालमा विद्युत् ऊर्जाको एकमात्र क्रेता प्राधिकरणले हालसम्म निजी क्षेत्रसित गरेको पीपीएबाट दुई सय ५३ मेगावाट बिजुली उत्पादन भइरहेको छ। प्राधिकरण सञ्चालक समितिले पारित गरेपछि यस्तो प्रावधान लागू हुनेछ। यसअघि प्राधिकरणले प्रवद्र्धकको अवस्था, हैसियत, उसले ऊर्जा मन्त्रीलाई पार्न सक्ने प्रभावका आधारमा क्षतिपूर्ति दर तय हुँदै आएको छ। प्राधिकरणसित कनेक्सन एग्रिमेन्ट गरेर पनि के कति दरमा पीपीए गर्ने भन्ने अन्योल भएका कारण एक दर्जन आयोजनाका लाइसेन्स खारेजी हुने प्रक्रियामा छ। प्राधिकरणले विगतमा पहुँच र प्रभावका आधारमा 'नेगोसियसन' गरेर २५ मेगावाटभन्दा माथिका आयोजनाको पीपीए गर्दै आएको थियो। प्राधिकरणले २५ मेगावाटभन्दा मुनिका आयोजनाको पीपीए दर पनि हिउँदयाममा प्रतियुनिट आठ रुपैयाँ ४० पैसा र बर्खायाममा चार रुपैयाँ ८० पैसा तय गरेको छ। २५ मेगावाटभन्दा माथिका आयोजनाको पीपीए दर तय नभएका कारण अनौपचारिक तवरले पीपीए गराउनुपर्ने गुनासो जलविद्युत् प्रवद्र्धकले गर्दै आएका थिए। नेपालमा विद्युत् ऊर्जाको एकमात्र क्रेता प्राधिकरणले हालसम्म निजी क्षेत्रसित गरेको पीपीएबाट दुई सय ५३ मेगावाट बिजुली उत्पादन भइरहेको छ। यस्तै पीपीए भएकामध्ये उसका आफ्नै सहायक कम्पनी माथिल्लो तामाकोसी, चिलिमेका सहायक कम्पनी रसुवागढी, मध्यभोटेकोसी, माथिल्लो साञ्जेन, साञ्जेनसहित निजी क्षेत्रसित एक हजार २६ मेगावाटका आयोजना निर्माणाधीन छन्। सञ्चालनमा रहेका, निर्माणाधीन र विभिन्न अवस्था गरी प्राधिकरणले हालसम्म एक हजार नौ सय ६४ मेगावाट आयोजनाको पीपीए गरिसकेको छ। नौ सय २७ मेगावाटका आयोजनाको पीपीएका लागि प्राधिकरणमा निवेदन परेको छ। स्रोत: अन्नपुर्ण पोस्ट

Only 23.55 MW connected to national grid last year

Posted by Suman Budhathoki on August 18, 2014 at 2:25 AM Comments comments (0)

Source : Republica

August 17, 2014

Only 23.55 MW of hydropower generated by six projects was connected to the national grid in fiscal year 2013/14.


The annual report of Nepal Electricity Authority (NEA) prepared on the occasion of the state-owned power utility´s 30th anniversary states that power generated from Lower Chaku Khola (1.76 MW), Ankhu Khola-1 (8.4 MW), Bhairab Kunda (3 MW), Radhi Khola (4.4 MW), Mailung Khola (5 MW) and Chhote Khola (900 KW) was connected to national grid in the last fiscal year.


However, power generated from Lower Chaku Khola and Bhairab Kunda have been left unused due to damage in transmission line.


The addition of a meager 23.55 MW to the national grid means the nation will have to face long load-shedding hours in the dry months as energy demand rises by an average of 100 MW every year.


Speaking at the program, trade union leaders of NEA blamed the NEA management and NEA board, led by Minister for Energy Radha Kumari Gyawali, of hampering the work progress of three projects promoted by three subsidiary companies of Chilime Hydropower Project by removing Kul Man Ghising from Chilime.


Minister Gyawali, in turn, blamed the trade unions of disobeying the decision taken by the management.

NEA not to sign PPA with new HPPs

Posted by Suman Budhathoki on April 27, 2014 at 5:40 AM Comments comments (0)

The Nepal Electricity Authority (NEA) will not sign Power Purchase Agreement (PPA) with new projects stating that electricity will be wasted during the rainy season after five years. NEA has taken the decision stating that billions will be lost with a surplus of 775 MW in the system during the rainy season after 2018 while there will still be load-shedding during the dry season. NEA, however, will procure electricity during the dry season. It has projected that there will be a surplus of 775 MW during the rainy season due to completion of 456 MW Upper Tamakoshi Project and a few other projects constructed by the private sector. The investors are disappointed after NEA said that it will procure electricity from mid-November to mid-April but not during the rest of the year. NEA has projected that there will be load-shedding of six to eight hours a day during the dry season even though there will be surplus electricity during the rainy season as all the completed and under-construction projects apart from Kulekhani are run of the river (ROR) types. Generation in ROR projects fall to up to 30 percent of the installed capacity during the dry season due to fall in water level. The NEA decision will ensure that new projects will not be constructed. Over three dozen projects with combined installed capacity of over 1000 MW are waiting for PPA with NEA. NEA has a monopoly over transmission and distribution of electricity in Nepal and also generates most of the electricity. “We have taken the decision to not sign PPA with new projects as there will be a state of imbalance with surplus electricity during rainy season and scarcity during the dry season,” Director at the Power Trade Department of NEA Hitendra Shakya said. “We will now sign PPA only with the promoters of projects with whom we have signed power connection agreement and not with new projects,” he added. He claimed that the decision has been taken under recommendation of the System Operation Department of NEA. NEA has signed power connection agreement with 20 projects with combined capacity of around 750 MW. Shakya stated that NEA will no longer sign PPA on take or pay basis and PPA will only be signed with new projects once market for electricity is ensured following construction of transnational transmission line. “This decision of NEA is a matter of concern for the private promoters,” President of the Independent Power Producers’ Association, Nepal (IPPAN) Khadga Bahadur Singh said. “Investment will not arrive for projects to sell electricity only during the dry season. Domestic and foreign investment in the hydropower sector will be stopped if the decision is implemented,” he added. He recommended that demand and supply of energy should be projected by establishing an independent energy consumption projection unit, and electrification should be intensified to increase electricity consumption. “To refuse to sign PPA due to projection that there will be surplus energy during the rainy season is to bring energy development in the country to a grinding halt. Demand of electricity will rise if it is supplied regularly by maintaining a balance between demand and supply,” he claimed. Joint Secretary at the Energy Ministry Keshav Dhwoj Adhikari, however, argued that NEA has not said it will not sign PPA and claimed that it plans to sign PPA only with projects whose construction is certain. Promoters state that the policy of procuring electricity only during the dry season will not make projects financially lucrative and stop flow of investment. NEA has signed PPA with 153 projects with combined installed capacity of 2000 MW until now. Installed capacity will rise to 1700 MW by 2016 if all the projects with whom PPA has been signed are completed in time. Though these projects will generate 1700 MW during the rainy season, it will fall to around 800 MW during the dry season due to receding water level as all of them are ROR projects. Demand of electricity rises by around 10 percent every year, according to NEA. The ministry has issued license to 86 promoters for generation of 2229 MW until now. Source : Karobar Daily

Budi Gandaki Hydropower Project

Posted by Suman Budhathoki on March 6, 2014 at 12:25 AM Comments comments (0)

KATHMANDU, March 4 Consultant Tractebel Engineering of France has projected the cost price of electricity from the reservoir-based Budi Gandaki Project to be Rs 10 per unit. The concept design report submitted by Tractebel to the Budi Gandaki Hydropower Project Development Committee has stated that the project is financially and technically viable, and its generation cost will be 9.58 cents per unit. This rate is cheap as it is a reservoir based project. Generation of electricity will be cheaper if the US dollar were to weaken a bit. The Nepal Electricity Authority (NEA) has taken a decision to procure electricity from the export-oriented projects to be completed after 2020 at Rs 10.60 per unit during the dry season. The project is also scheduled to be completed after seven years. Budhigandaki “The concept design has showed that the project is cheap. We must develop Budi Gandaki anyhow,” executive chairman of the committee Laxmi Prasad Devkota said. He revealed that Tractebel has advised to design the project either to generate 630 MW or 945 MW. The estimated project cost while designing it for 630 MW is Rs 200 billion and Rs 225 billion while designing for 945 MW. Tractebel is currently preparing the detailed project report (DPR). The report has showed that the project will generate 2.50 billion units of electricity a year. Feasibility study for the project had started in February, 2013. Tractebel has recommended that project cost will be lowest among the three proposed models if the power house is kept at the dam site without constructing the tunnel. “The design has not been approved. We will take appropriate decision holding discussions with the government, experts and different committees as the consultant has submitted the report to us,” he revealed. He stated that the first alternative looks appropriate from the perspective of time and energy. Another proposed alternative is constructing an under-ground power house in Ghyalchowk by digging a 1.50-kilomtere from a little above the dam while the other alternative is constructing the dam at Dabung by building a 10-kilometer tunnel and constructing the power house in between by taking water to Fishling through the tunnel. The report states that the powerhouse should be constructed just below the dam and another re-regulated dam below that as per the first alternative. Devkota explained that a re-regulated dam is necessary to prevent impact on human settlements and nature and environment in the vicinity of river as the water coming out of the project while operating at full capacity during the peak hours can take proportion of flood. He revealed that such dam will block the massive water flow and gradually dump the water into the river. The committee has prepared a schedule of starting generation from March, 2021. Construction will be completed in five years after finishing feasibility study, resettlement and rehabilitation, financial management and awarding contract in two years. The committee plans to bring foreign investment for the project and also manage investment through the Employees Provident Fund (EPF), different banks and financial institutions and commoners. The country is expected to be free of load-shedding once the project is completed. The consultant has been handed responsibility of completing DPR and preparing bid documents to take the project to the stage of construction. The committee stated that the dam will be around 225 meters high. The project will be among 36 projects with big and high dams in the world and will affect 23 village development committees (VDC) of Gorkha and Dhading districts. A lake will be created up to 50 kilometers upstream. Source : Karobar Daily