Key Factors Behind Load-shedding In Nepal

By Arnav Rajbhandari

In a layman’s term, load-shedding is an unmet demand of power. The problem of power outage emerges when the demand for electricity exceeds the supply. In Nepal, the total current supply of electricity is 689 MW, while the peak time demand stands at 813 MW.

There is not a single person, institution or factor that can be blamed for the load-shedding. However, the Nepal Electricity Authority (NEA), government’s policies, private hydropower companies, technical factors, poor infrastructure and consumers deserve certain portion of blame.

NEA has not been able to work independently. The organization fails to resist the decisions made by the government as it has been like a government puppet. If the government tells the NEA not to increase the price of electricity, they have to agree on it without any reason; if government tells them to hire more people, they have to accept it irrespective of their capacity to hire. This has resulted in NEA’s selling price being lower than its cost price. Their cumulative loss by the end of fiscal year 2009-10 was noted to be around Rs. 12 billion.

To gain favoritism, politicians have been forcing NEA to decrease load-shedding immediately. The only way NEA can do so is by buying electricity from India. To do so, NEA has to increase the price of electricity, but politicians do not allow the Authority to increase the price. This further adds up to the losses of NEA. The price of everything is increasing day by day but the price of electricity has been the same since past eight years.

Political instability also plays a crucial role in regard to load-shedding. The construction of Middle Marsyangdi Project was badly affected by political instability in the country. Because of insecure working conditions owing to local conflict, the army refused to provide them with sufficient explosives and did not allow them to work in night shifts. This delay doubled the cost of this project. The project was scheduled to be completed in four years in 2005 but it was completed only in 2009. The estimated cost for this project was Rs. 13 billion while the completion cost came around Rs. 27 billion. One more example of the impact of politics on hydro power projects can be seen in the case of Arun III. Arun III was promoted during the Panchayat period but the Nepali Congress delayed it by one year. Later, when communists came to power, they did not show full commitment. Environmentalists also protested to prevent its construction as it might have killed some species of fishes and birds in that region. Because of these reasons, donors backed out. This shows how political instability discourages the foreign as well as domestic investors to invest in power sector in Nepal.

The other factor is government policies. Sanctioning a new project is a very long and tedious process. It has to undergo a series of formalities before it is ready for construction. After identification of the project, license is obtained to carry out feasibility study of the project. During the feasibility study, environmental clearance should be obtained from the line ministries. For the project up to 50 MW, Initial Environmental Examination (IEE) should be carried out whereas for projects exceeding 50 MW, Environmental Impact Assessment (EIA) must be carried out. Any project located in conservation area must undergo full fledge EIA. IEE is approved from the Ministry of Energy whereas EIA will be approved from the Ministry of Environment. The entire feasibility study may take 2 to 4 years. Once the project is technically and financially feasible, the investors are approached for the financing of the project. Only after obtaining full commitment from the investor and promoter, the project enters construction phase. The construction period varies from three to five years depending upon the size of the project. Hence, total time period required for a project to commence is about 7 to 10 years after its identification. This long and tedious process discourages the foreign investors and developers to invest in this sector. The Forest Act prevents cutting trees, which hinders and sometime stops the construction of hydro power projects.

Private hydropower companies should also take some blame for long hours of load-shedding in Nepal. They pledge to produce certain amount of electricity but they fail to met the target. They produce less than 10 per cent of power they had promised to generate. The Department of Electricity Development has issued licenses to 322 different companies to build 10,353 MW of power, but only 158 MW of power is being generated from the private sector. Private companies, after getting the license, have been unwilling to construct the project because of political unrest, their financial condition and time lag of studying and approving the project.

It is necessary to understand different types of projects in the system, generation and demand pattern of Nepal before understanding the technical factors behind load-shedding. Nepal power system is dominated by hydro plants. The share of the plants other than hydro is very nominal. There are three types of hydro power projects in Nepal according to its operational pattern. They are Run of River (ROR), Pondage Run of River (PROR) and Storage Plant. In a ROR hydro power plant, continually flowing water of river gets into turbine and generates electricity. This type of plant cannot store water when the demand is low in order to use it when demand is high. Whatever gets into turbine is used to generate electricity, the rest is allowed to flow away. A PROR hydro power plant stores water behind its dam when the demand is low to use it during peak hours. A storage plant has a big reservoir where the water is collected throughout the wet season to be used during the dry season. Most of the major rivers of Nepal originate in the Himalayas. Hence they have high discharge during summer season when most of the snow melts down and low discharge when there is minimum contribution from snow and rainfall. July, August and September are considered as wet season because of maximum snow as well as rainfall recorded during these months. The storage plants start to store water to use it during dry season. February, March and April are considered as dry season because of minimal contribution from snow and rainfall. In general, the generation is reduced to around one-third during dry season.

This is the time when the water from storage plants is set loose to produce power. The seasonal demand pattern of Nepal power system is more or less constant. During the dry season (winter), the water level in river decreases by 60 per cent while the demand increases by 10 per cent. The total supply of power during wet season is 700 MW while it goes down to 300 MW during dry season. Here you can notice that when the generation is at its full throttle the demand is relatively low while when the demand increases the generation decreases. However, there is a wide range of fluctuation in hourly demand of the power. Two distinct peaks are observed in the system. The morning peak lasts for about two hours starting from 6:30 AM whereas evening peak lasts for four hours starting from 5:00 PM. The demand during morning peak is about 60 per cent of the demand during evening peak whereas demand during off peak hour is only 40 per cent of the demand during evening peak. Therefore, to cope with this demand, different types of plants should be implemented in the systems which are capable of peaking the power during peak hours.

Poor infrastructure of a developing country like Nepal has also hindered the process of constructing projects. Usually project sites lie in remote, isolated places with no connection to roads. The project developers should not only build the project but also the access road to the project site. This increases the project cost as well as project time. Tama Koshi hydro power project is a perfect example of this. They started building access road four years ago and it has not been completed till this day. In addition to that, old and wearing transmission lines, transformers and machineries in power plant have decreased the efficiency.

Consumers are also responsible for load-shedding in Nepal. Whether it is not paying the bills, consuming more than needed or stealing electricity, consumers have been making the case of load-shedding worse. NEA gets 42 per cent of revenue from domestic consumers. It is estimated that 8 per cent of energy is stolen. If the domestic consumers don’t pay their bill on time, then it will add up as a loss to NEA. The NEA staff get beaten up when they enter certain communities to read the meter. Also, many people turn on light carelessly, even in places where lights are not required. We can see big hoarding boards flashing with lights and malls all glittered and decorated with lights. This increases the demand of power. This way, the consumers can also be seen responsible for degrading the financial health of NEA and fueling load-shedding.

Gorkhapatra 2010-05-23