When electricity supply returned to normalcy after years of load-shedding, people were naturally euphoric. But they had no idea what made the uninterrupted power supply possible. While household consumers are getting uninterrupted power supply today, such is not the case with the industrial sector. The Nepal Electricity Authority (NEA) has started cutting power supply to industries. It is ironic that the industrial sector is seeing load-shedding at a time when NEA is under the leadership of the same person who had received accolades for freeing the country from load-shedding in his earlier term. It is now clear what happens if we don’t import electricity from India. This should open the eyes of the NEA and the government.
The number of new industries starting operations is very low. Imports are skyrocketing due to a lack of manufacturing activities. Given the high cost of production, Nepali products are already losing their competitive edge against imported products. The situation will aggravate further if factories are forced to use expensive diesel plants due to load-shedding as it will increase the cost of production further. As we have already seen that electricity import is not a dependable solution, there is no option but to increase hydropower generation. Therefore, the government and the NEA should leave no stone unturned to add more power to the national grid.
NEA should have encouraged the private sector to complete the projects on time, while also balancing the supply of Indian electricity. Had it been done, many megawatts of electricity would have been added to the national grid over the past four years. However, the government took the wrong policy. First, it was not clear how the load-shedding ended. There was no proper facilitation and incentives for hydropower developers to complete their projects in time. Our consumption is very low. Even at the peak hour, we consume only around 1,500 MW. NEA seems more worried about finding a market for energy going to waste in the rainy season, than ensuring an uninterrupted power supply in the dry months. It simply doesn’t have any plan for the dry season. The talks of exporting electricity to India and Bangladesh seem like a distant dream as we have surplus energy only in the wet season. We need to import power to meet the domestic demand in the dry months. The situation will remain the same until more hydropower projects start generation and their energy is connected to the national grid. Also, transmission infrastructure needs to be overhauled to control leakage.
Of course, the current problem cannot be solved immediately. However, there are some alternatives that NEA can take immediately. Diesel plants, which were shut down following the end of scheduled power cuts some years ago, can be operated. If the government provides tax-free diesel for these plants, electricity can be produced at a cheaper price compared to energy imported from India. Similarly, tax-free diesel can be made available to industries that have captive power plants. Also, transmission infrastructure should be built for power plants where energy is going to waste. Also, hydropower plants should be encouraged to increase their production capacity. Plants are still not seeing a rise in generation even though the snow melting season has already begun. The long-term solution is to generate more electricity. For this, there shouldn’t be any delay in the construction of reservoir-based projects. Likewise, the confusion seen in the development of Budhi Gandaki Hydroelectric Project should be ended immediately. The government should finalise its development modality at the earliest. Similarly, peaking-run-of-river projects should be encouraged to boost supply during peak hours. The NEA should also think about resuming the signing of power purchase agreement (PPA) with hydropower developers which has stalled for a long time.
NEA does not seem to have done sufficient study on the supply and demand situation. While it talks about increasing energy consumption, it is also enforcing power cuts when it cannot balance the demand-supply situation. It is not worthwhile to play on issues of strategic importance like energy in this way. Although there is great potential for hydropower development in Nepal, the problem is compounded by the government's failure to adopt a strong policy. The current problem can be solved by taking diplomatic initiatives with India. For that, we have to take the needful initiatives, solve the immediate problem and move towards finding the long-term solution.