The Nepal Weekly 
June 12, 2023
Prime Minister Pushpa Kamal Dahal”Prachanda” has said that his recent India visit was focused on economic development and prosperity.
Giving a statement on the matters of public importance the other dayat a meeting of the National Assembly, Prime Minister Dahal mentioned that his India visit was successful to build mutual trust between the two countries and put economic development in center.
The third visit of Dahal as Prime Minister, power trade, agriculture, dry port and transit were in the focus.
“An agreement has been reached for power trade with Bangladesh via Indian territory. Indian Prime Minister Modi has said India will import 10,000 MW of electricity in next 10 years. It has created an environment to export power produced from different hydropower projects including Upper Tamakoshi”, Prime Minister Dahal mentioned.
Prime Minister Dahal added that the market of electricity generated from hydropower projects has been guaranteed and it has paved the way for further investment in the country’s energy sector, as well as understanding has been made to complete detailed project report of Pancheshwar Project within three months and to determine implementation model within a year.
Following to the Prime Minister’s visit to India, Independent Power Producers’ Association, Nepal (IPPAN) has appreciated the visit stating that the visit was historical and focused on long-lasting national interest.
The association had organised a meeting with media in Kathmandu to share its opinions and expectations out of the agreements took place during the Primie Minister’s India visit, the IPPAN termed the PM visit was successful for long-term energy development with lasting importance. Exporting 10,000 megawatts of power in 10 years to India is a step to welcome.
Chairperson of IPPAN stressed that now the government should immediately give approval for power purchase since the foundation for power trade has been built. “Historical agreement has been signed during Prime Minister’s India visit. Now, the government and its agencies should work to implement the agreement,” he added.
The association is also demanding with the Government to create conducive environment for private sector to involve in electricity trade.
Moreover, electricity generation in Nepal is increasing and it has been able to export electricity generated by various hydropower plants to India in the ‘wet season’. The dry season runs from December to April while the wet season lasts from May to November.
In the last wet season, Nepal exported electricity worth of 8.4 billion to India. That was the time when Nepal exported 364 MW. Now, a serious home work is going on these days to export 1,200 MW in the coming wet season of the year 2023 as in the long run, India will buy 10,000 MW from Nepal.
Electricity generation from hydropower plants in Nepal has reached 2,300 Mega Watt so far and present demand in the country is around 1,700 MW. It is expected that the electricity generation will reach 3,000 MW in the coming wet season, and 7,300 MW by 2025. This is also to be noted that the installed capacity of the plants generate in their full capacity in the wet season as most of the plants are ROR (run-of the river) type. That means they generate electricity as per water flowing in the river. In the dry season, water flowing in most of the rivers decrase to around 30 per cent and electricity generation also decrease accordingly. More to be note is, Nepal has imported electricity paying a significant sum of money from India in the following dry season as total electricity generation in the country was not enough to meet the demand.
The politicians, policymakers and private sector are excited with the opportunities created by the narrative of India to buy electricity that will be big opportunity for Nepal to support narrowing the balance of trade. That means more export of electricity to India will result significantly narrowed trade gap in the coming years.
In the past, the technical and economically feasible hydropower potential of Nepal has been estimated at 83,000 and 42,000 megawatts (MW), respectively. But the technical development in the later phase indicates that the said potential amount will be in folds.
Interestingly, in the Nationally Determined Contributions (second) Nepal has mentioned that by 2030, it will generate 30,000MW of electricity from hydropower plants and 5% to 10% of electricity from Solar PV and other than technologies. Out of the determination 5,000 MW is an unconditional target. The other segment is dependent upon the provision of funding by the international community. Thus, this is to plainly understand that Nepal commits to reduce consumption of fossil fuels and biomass for domestic, industrial and transportation uses to support climate actions.
It is true that Nepal needs to reduce imports especially fossil fuels and food materials. The hydropower generation and ot he electricity generation from Sola PV and other technologies will replace use of fossil fuels and biomass (mainly firewood). This will also contribute to reduce airborne diseases.
The Government says that electricity facilities will be provided to all citizens within the next two years. Those who will remain inaccessible by the national grig will be provided electricity through mini and micro hydro, solar, and wind energy. That will bring result per capita electricity consumption increased to 450 kWh per year. The Government also has announced that free electricity consumption up to 50 kWh in wet season and 20 kWh in dry season will be provided freely to a category of consumers who consume low amount of electricity.
The Government of Nepal has recently announced the annual budget of the Fiscal Year 2080/81. A total budget of NRs. 1.751 trillion has been announced by Finance Minister, of which NRs 87.45 billion has been allocated for the energy sector. NRs 1.74 billion has been allocated for renewable energy promotion. 100 % of population access to electricity in two years, promotion of electric vehicles, private sector investment on charging stations are the highlights of budget in energy sector. Similarly, Green Economy and Sustainable Development and environment conservation and climate change assessment of development projects are priority actions. Hence, Nepal if prioritise electricity exports, what will be the contribution to the climate action as a big portion of clean energy generated in the country will be exported to consume in other country/countries. That means electric mobility, electric cooking and electrifying industries will possibly remain in the shadow due to wider gap between actions and commitments. The momentum will not far slower than thought before.
