The protracted progress of West Seti Hydroelectric Project in absence of financial arrangement is again taking a move ahead.

One of the senior project officials informed to start 10 km long access road, connecting project’s site and Seti Highway, to encourage the investors. “To trim down the project’s uncertainty existing among locals, government and investors, we are constructing access road with investment from SMEC,” the official told the Rajdhani.

According to an official at the Ministry of Energy, the promoter, which failed to kick-start the construction works even after a decade of acquiring the project’s license, is going to construct access road in the project’s site when the government started looking for a new investor.

The Energy Minister, Prakash Sharan Mahat informed that the project could not go ahead since the company failed to make financial closing. “The government is not going to delay the project if the construction company approaches us with an official letter regarding financial closure,” he said.

The Minister Mahat admitted the continuity of the same company in the project, although he hinted some preliminary discussions regarding the new investor. “We are analysing some clauses for amendment in the agreement with the existing company,” he said. 

Mahat also informed that the agreement was forwarded to officials at Ministry of Finance and Ministry of Law for giving a second look at some clauses.

Nepal bears a great loss since the construction company failed to make financial arrangement, said Mahat, “The government is committed to begin West Seti soon.”

The project with 750 MW installed capacity exports 90 percent of electricity to India while remaining 10 percent will be granted to Nepal free of cost.

As per the past agreement, 1.6 billion US dollars project engrosses share investment from Australian Construction Company SMEC (26 %), Government of Nepal (15%), Asian Development Bank (15%), China Machinery Imports and Exports Corporation CMEC (15%), Infrastructure Leasing and Financial Services –IL&FS (15%) and the Nepalese financial institutions (14 %) including four percent from the far western local people. The project will have 25 percent equity share and 75 percent as loan investment.

“Investments from others will flow as soon as ADB gets ready,” said the source accusing ADB for its negligence for delayed investment.

Unofficial translation from Rajdhani daily Kathmandu, Nov 17, 2009

काठमाडौं, २ मंसिर: सरकारले विद्युत् महसुल बढाउने भएको छ । ऊर्जामन्त्री डा.प्रकाशशरण महतले हालको घाटा थेग्नका लागि नेपाल विद्युत् प्राधिकरणका सामु विद्युत्शुल्क बढाउनुको विकल्प नरहेको बताउँदै अब केही दिनभित्रैमा महसुल वृद्धि गर्ने तयारी भएको बताए ।

रिपोर्र्टर्स क्लबद्वारा मंगलबार राजधानीमा आयोजित साक्षात्कार कार्यक्रममा ऊर्जामन्त्री महतले विगत नौ वर्षता विद्युत् महसुल नबढाइएको जानकारी दिँदै अहिले बाध्य भएर यो निर्ण्र्ाागर्ने तयारी भएको बताए । मन्त्री महतले महसुल वृद्धि गर्दा र्सवसाधारण जनतालाई मर्का नपर्नेगरी विद्युत् महसुल बढाइने दाबी गरे । हाल  विद्युत् महसुल बढाउनका लागि अध्ययन भइरहेको बताउँदै उनले अध्ययन सकिएलगत्तै यसबारेमा निर्ण्र्ाालिइने बताए  ।

Read full texts from Rajdhani

KATHMANDU: It takes 73 days to fulfil six procedures to get an electricity connection in Nepal, according to a World Bank pilot project. The same can be done in 22 days and four procedures in Iceland but takes 424 days in Afghanistan.

Getting Electricity — the two-and-a-half-year project — presents findings on the constraints entrepreneurs around the world face in getting access to electricity and illustrates patterns in connection processes. The study also tracks all the procedures, the time, and the cost required to obtain an electricity connection for a newly constructed building.

However, in Nepal the cost of not having electricity is higher than the cost of connection, as the country reels under long hours of power outage. World Bank surveys in 89 economies of the world show that electricity tops infrastructure needs of the business entities.

Many businesses lack access to power connections and are prevented from moving into higher-value-added activities that rely on electricity-based technologies. According to International Energy Agency, in 2005 more than a quarter of the world’s population lacked access to electricity. Businesses also care about the cost of both the electricity connection and the electricity supply-because electricity-related expenditure eats up a significant share of their revenue.

Managers responding to World Bank Enterprise Surveys estimated that on average their spending on electricity amounts to four per cent of their annual sales, while combined spending on other infrastructure services like fuel, communication services and water accounts for 6.4 per cent.

Among the 140 economies surveyed for Getting Electricity, Ukraine ranks at the bottom, with 10 procedures required to get new power connection. It’s much easier to do the same in Denmark, Germany, Japan and Mauritius.

The survey details the efficiency and cost of the services provided to commercial customers by distribution utilities, the complexity of procedures, and the resources expended by businesses in obtaining a connection.

“In the 10 economies with fewest procedures, the process of obtaining an electricity connection takes only 56 days on an average, while in 10 economies with most procedures, it takes 215 days,” the report adds.

The Himalayan Times

BIRGUNJ: Minister for Energy Prakash Sharan Mahat said today that the country would face power-cuts for at least three more years.

Speaking at a press conference organised by Nepal Press Union Parsa, he said, “The dark hours will stay here as high capacity transmission line for electricity from India to Nepal won’t be in place before three years.”

According to him, the public was reeling under regular power-cuts as the internal production was not sufficient to meet the energy demands. The minister, however, informed that plans were afoot to repair the thermal plants in Hetauda and Biratnagar. “That could be some sort of a breather for the country,” he said.

He also made revelations that the government had a policy to encourage investors in hydro projects. “The government has prioritised the Upper-Seti Hydro Electricity Project in Tanahun while preparations were on for the construction of Upper-Tamakoshi as well,” he said. The minister also informed that more than a billion rupees has been allocated for rural electrification in this fiscal budget.

He, however, said that the budget deficit of the Nepal Electricity Authority had reached Rs 14 billion. Saying that the electricity in the country was being sold at a price lower than the production cost, Mahat hinted at a possible hike in the electricity tariff.

The Himalayan Times

KATHMANDU, June 1: Nepal Electricity Authority (NEA) is under tremendous pressure to take an immediate decision regarding a 250-MW power purchase from India. A decision in this connection, according to NEA sources, would have to be taken within the next two weeks as the Power Trading Corporation (PTC) of India is becoming ´impatient.´

“A bold decision has to be taken in this regard within two weeks as we are already facing pressure from PTC,” an NEA official told Republica.

NEA is currently undertaking an impact study for the power purchase, which may range anywhere between 200 MW and 400 MW on a long term basis, with the power to be made available by April 2012, the official said.

A high-level agreement between the two countries is also likely before the purchase deal materializes.

“We have said for quite some time now that an agreement on the grid system at government-to-government level should be in place for the project to materialize soon. The government of Nepal can even request the Indian government to construct the 39 km transmission line on the Nepal side of the Dhalkebar-Muzzafarpur corridor,” the source added.

The project is contingent upon completion of the high voltage cross-border transmission lines. As per the proposal, India will construct 140 km of transmission lines up to the Nepal border and Nepal should construct the 39 km this side of the border.

The cost of the proposed project is estimated at Rs 16 billion. Infrastructure Leasing & Financial Services (IL&FS), which had taken the initiative for development of the Indo-Nepal transmission project, is now facing difficulty getting the project financed. Two joint venture companies - Cross Border Power Transmission Company Pvt. Ltd. and Power Transmission Company Nepal Ltd. - were incorporated for implementation of the project.

Asked to comment on the issue, PTC officials said that they are still waiting for a response from NEA. “NEA has not responded to the proposal yet. We are waiting for a final answer soon,” Harish Saran, Vice-President of PTC, told Republica.

500 MW tale:
Meanwhile, the much-talked about import of 500 MW of power from India has turned out to be just rumor, as NEA had never approached PTC with such a proposal.

“PTC has not been approached for the 500 MW power purchase,” an Indian embassy official confirmed.

NEA first corresponded with PTC in October 2008 for the import of 200 MW from India for a period ranging from five to 25 years. PTC then proposed 200 MW for five to 15 years. The cost quoted was IRs 4.50 for five years and IRs 3.25 for 15 years.

“All talk of 500 MW for a period of 25 years has been limited to date to the Internal Development Board of NEA. We never made a formal request in that regard to PTC,” the NEA official said.

KATHMANDU, May 16 - With rivers witnessing a slight increase in discharge due to sporadic rainfall, Nepal Electricity Authority (NEA) is planning to marginally reduce power outage hours from next week, an official said on Friday. The cut in outage hours is yet to be worked out.

On April 17, the state-owned power monopoly had brought down daily power outage to 12 hours from 16.
According to the NEA official, the 144-MW Kali Gandaki ‘A’ project is generating about 100 MW during peak hours, up from 65-70 MW a few weeks ago.

The 70 MW Mid-Marshyangdi Hydro Electri-city project has been operating at full capacity for over a month during peak hours, while water level in the 90-MW Kulekhani Reser-voir, the only storage type hydro power project in the country, has also increased due to precipitation.

However, as the rain is intermittent and less intense, power generation is likely to fluctuate in the coming days if there is no rainfall. NEA said this will ultimately affect power generation.

Source: Ekantipur/May 16

436 tons of waste is generated everyday in Kathmandu, Lalitpur and Bhaktapur. This can generate about 184 MW electricity everyday. Definitely the conversion technology with cleaning mechanism is costly but the cost needs to be looked at the waste management perspective and also the cost of electricity generation. New heat intense processing industrial area can be developed near by such location. This, to some extent, will also lead our metro cities towards a sustainable development.

Nepal is going through severe power shortage at present. This is having a huge cumulative effect on the economic growth of the country itself.The government of Nepal has declared state of emergency in the power sector and has admitted the bitter truth of being unsuccessful to meet the growing power demand. The present alarming situation is not a result of our actions and plans of last few months but it is an accumulation of problems, short-sightedness, political intervention in Nepal Electricity Authority (NEA) and “water politics” in the past. As a result, we have always lacked in terms of long-term plan to cope with the increasing demand of electricity. We have lagged even behind other underdeveloped countries in the supply side option. Moreover, it is not possible to produce the deficit power in the coming few months.

It is so surprising as well as embarrassing to hear the experts who were in responsible positions in the past and now opposing the policy of past and present government. But we should realise this nightmare is not only because of the politicians. The experts and planners who were advisors and guiding the politicians should also take moral responsibility.

The peak energy demand in 1998 was 317 MW which was more than double (722 MW) in 2008. However, the current production capacity is 617 MW including NEA and Independent Power Producers efforts. So even in wet season, it is not possible to meet the demand even when the power plants operate in full capacity. Government should now come up with a detail programme to sort out the problem. Definitely the power crisis need to be seen in a larger perspective, requiring short term, mid term and long term solutions.

Short Terms Measures
The energy issue is related with demand side. The residential sector has large contribution (42%) during the peak hours. So, strong demand management programmes in residential sector can sharply reduce the peak load. Replacement of incandescent light by Compact Fluorescent Lamps (CFL) in a mass scale in the household, and promotion of energy efficient home appliances could be effective measures to reduce demands.

The life of CFL are normally longer than that of filament lamps while its use also substantially reduces the electricity bill but they are susceptible with the voltage and frequency variation and therefore question of maintaining standard voltage and frequency in the consumer end is another big challenge to NEA. As the cost of average CFL is ten times higher than incandescent lamps consumers may be reluctant to quickly shift to these lamps if we are not able to assure the quality of the electricity. So maintaining quality of electricity is must to enforce successful CFL programme.

Electricity is a commodity; the pricing needs to vary with the demand. So, there should also be time of day tariff in urban residential sector. This will encourage people to shift their possible load in off peak hours. If above mentioned two points are implemented properly, the peak load could be reduced by at least 10% to 20%. For this, there should be an integrated effort from NEA, consumer associations and the private sector.

Mid Term Measures: Diesel plants or Energy from Waste
The government had come up with the proposal of installing 200 MWh diesel power plants for immediate solution to the load shedding, which could be a mid term solution. The question is if we have done the feasibility study to identify such locations which could prove best for locating diesel plant considering the transmission losses, local environment etc. There is also doubt on the reliable supply from diesel plants as people have bitter experience of keeping themselves in queue for hours to get few liters of petrol and diesel in the gasoline stations. The installation cost of a diesel power plant is fairly low and also has shorter installation time than hydro but it will be another challenge to compete with its high generation cost and to cope with price dependency on imported fuel. NEA has proposed additional government subsidy to meet the extra per unit cost of generation which is not a realistic plan and solution at all. More in depth exercise is needed before its implementation.

Waste management has always been a big problem in major cities especially the capital Kathmandu. An integrated solution for two different problems could be generate energy from waste. A typical plant with a daily waste input of 830 tons of garbage and 50 MWh of energy generates 400 MWh electricity and 960 tons of steam (thermal power) and 28 tons of ash, which is hardly 3% of the total weight of the garbage which would otherwise has to be dumped in the dumping site.

436 tons of waste is generated everyday in Kathmandu, Lalitpur and Bhaktapur. This can generate about 184 MW electricity everyday. Definitely the conversion technology with cleaning mechanism is costly but the cost needs to be looked at the waste management perspective and also the cost of electricity generation. New heat intense processing industrial area can be developed near by such location. This, to some extent, will also lead our metro cities towards a sustainable development.

Long-term Strategy
Without doubt, our long term strategy needs to focus on hydropower. If we look at the NEA’s annual report, 12.8 Gigawatts has been in plan and proposed power development schemes including ambitious schemes like Pancheswor of 6.5 GW, Karnali Chisapani of 1.1 GW, since quite a long time. Time has come to critically review our power development policy and strategy and the reasons why we have not been successful in hydropower development. Every large hydropower scheme plan has been politicised. We should now be able to move ahead with national consensus in hydropower development.

We should also be able to foresee power surplus situation once large schemes are harnessed. Our strategies in no case depend on India as a single client. So we should advocate for SAARC regional pool concept. We must create an environment to sell our electricity in a free market pool. So that we wont have the “power excess” problem in future.

(Mainali is a researcher at Energy and Climate Studies Division in Royal Institute of Technology, Sweden. Email: brijesh.mainali@energy.kth.se )

Source : NEPALNEWS.COM

By PRAGATI SHAHI

Kathmandu - The production of an additional 200 MW of electricity from thermal plants, as decided by the government on Wednesday, will not only be a huge financial burden but is also challenging logistically and environmentally.

According to Danda Pani Bashyal, spokesman for the Nepal Electricity Authority (NEA), the per unit production of electricity from Nepal’s two thermal plants is Rs. 34 against about Rs. 8 for per unit production of electricity from hydro plant.

There are currently two thermal plants in operation in Nepal — the 39 MW plant at Duhabi and the 14.4 MW in Hetauda. The NEA stopped operation of another one because it was facing a loss of Rs. 27 per unit.

One litre of diesel produces 3 to 3.5 units and at present each of the two plants spends Rs 3.5 million per week.

According to Sashi Sagar Rajbhandari, head of NEA’s maintenance and repair department, the 39 MW thermal plant in Duhabi, established more than a decade ago, has a capacity of only 12 MW due to lack of maintenance and repairing of the damaged parts.

He said, three machine parts each worth Rs 30 million and six spare parts are needed for the thermal plant to work to its full capacity.

“There is a need of minimum Rs 350 million for the thermal plant in Duhabi,” said Rajbhandari. Unable to bear the costs of thermal power generation two years ago the NEA auctioned a 1.5 MW diesel plant.

Dr Jivendra Jha, director of NEA’s civil and planning department, said the government has come up with the decision to set up the thermal plant without any homework.

According Uttar Kumar Shrestha, NEA managing director, the government has not consulted the NEA on the matter of installation of thermal plant and its infrastructure development. If only 200 MW of power is used up to 10 hours a day, two million power units will be generated which will need 700,000 litres of diesel a day. This will need at least 60 trucks to transport the diesel for a day’s energy production.

“This will definitely not only be a huge loss to the NEA but also to the government,” said Jha.

“The NEA is not capable to buy the power unit generated by the thermal plant unless the government provides subsidy,” says Shrestha.

Sources within the NEA said that it is already losing Rs. 7 billion a year.

There is also lack of trained manpower to manage and operate the thermal plant in the country. Transporting diesel will create traffic congestion and add security concerns, said Jha.

Shrestha said either the private sector should buy the thermal plant and sell the units to the NEA or government should provide huge subsidy in diesel to operate the thermal plant.

With no significant hydro power plants dues to start operation in the next few years, if the government wants to reduce the energy problem, thermal power is the only option, said Shrestha.

According to Shrestha, 14 MW Kulekhnai III and 15 MW Chamelia are the only major two hydro project to be completed in coming five years.

Businesspersons say the government has come up with the plan to set up thermal plants.

Kathamndu, December 7: The citizens Investment Trust decided yesterday to provide Nepal Electricity Authority (NEA) NRs 2 billion for Upper Tamakoshi, 39 MW run-of-the-river scheme project in Dolakha district.

The managing director of NEA, Uttar Kumar Shrestha, informed that the construction works of the project would start from mid-2009.

Meanwhile, the director of the trust, Nandan Hari Sharma, highlighted that hydropower was the most important sector for Nepal’s development.

Tamakoshi is the only largest project till date  being commissioned with funds from Nepali stakeholders.