IHA 2013 World Congress: Nepal Hydropower Association: Hydropower Development in Nepal
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The document outlines the hydropower development landscape in Nepal, emphasizing its significant potential of 83,000 MW, with 43,000 MW being economically viable. It discusses current initiatives, opportunities for private investment, and challenges faced in the sector, such as political instability and insufficient funding. Despite these challenges, the government has prioritized hydropower development and established frameworks to facilitate investments and regional cooperation.
IHA 2013 World Congress: Nepal Hydropower Association: Hydropower Development in Nepal
- 1. Bhanu Pokharel Nepal Hydropower Association Hydropower Development in Nepal Presented at the IHA 2013 World Congress
- 2. HYDROPOWER DEVELOPMENT IN NEPAL CURRENT INITIATIVES AND TAKE HOME THEMES • BACKGROUND • PRESENT SCENARIO • OPPORTUNITIES • CURRENT INITIATIVES • CHALLENGES • SOME TAKE HOME THEMES Nepal Hydropower Association Bhanu Pokharel General Secretary Nepal Hydropower Association
- 4. Background • Nepal, situated in the foothills of Central Himalayas, is a country having extreme physiographic and climatic contrasts compared to its small area of 147,181 sq. km. • The steep topography and the high run-off (225 B M3/yr.) offer opportunities of generating hydropower in the corridors of Nepal Himalayas. • Young Republic with a Population of 27 M • Total estimate Potential for Development of Hydropower 83,000 MW; 43,000 MW is economically viable • First Hydopower Project was built in 1911 (500 kW)
- 5. MAJOR RIVER BASINS AND PROPOSED PROJECTS KOSHI BASIN GANDAKI BASIN KARNALI/MAHAKALI BASIN Karnali Chisapani 10,800MW Pancheshor 6480MW Upper Karnali 900MW West Seti 750MW Kali Gandaki-2 600MW Buri Gandaki 600MW U/ Marsyangdi 600MW U/Tamakoshi 456MW Tamakoshi -3 650MW Saptakoshi 3000MW Arun-3 900MW
- 6. Present Scenario • 693 MW HP Developed in 101 years, < 2% of economically viable potential • Nepal Electricity Authority (NEA) - a state owned utility responsible for Generation, Transmission and Distribution of electricity in Nepal Indicators Now In Yr. 2017 Installed Capacity Energy Hydro 746 MW (Hydro/Thermal 693/53 MW) 4200 GWh 693 MW 2500 MW 7604 GWh 2450 Peak Demand 1163 MW 1770 MW Total PPA Signed by NEA 1650 MW / 1450 MW under various stage of Development ~ 2650 MW (incl. 150 MW import from India) Demand / Supply Match Huge un-served demand/ load shedding upto 16hrs/day Surplus for seasonal export / still deficit in dry season
- 7. Opportunities • > 98 % of The Viable Hydropower Potential (43,000 MW) Available For Development. Portfolio of Project Ranging from Few Hundred Kw to 10,800 MW • Domestic Demand In Nepal By 2030 : 5000 MW • Huge Potential Available For Development to Cater the Regional Demand of South Asia • Geographic Proximity of Hydropower Sites In Nepal With Major Load Centers In India – Low Transmission Cost • Regional Cooperation For Long Term Energy Security – India’s Thermal Dominated System, B’desh Natural Gas Resources and Nepal and Bhutan’s Hydro Potential to Ensure Optimal Generation Mix
- 8. Nepal’s Initiatives for Development of The Sector • Govt. of Nepal (GoN) has given high priority for private sector investment in the electricity sector • National Plan has identified export of power along with the expansion of national and cross border/regional grids as a national priority projects. • HP sector open for development to Private sector in 1990. Investment friendly policy and regulatory frameworks are in place Hydropower Policy - 1992 Electricity Act - 1992 Electricity Regulation - 1993 Foreign Investment and Technology Transfer Act - 1992 Foreign Investment and One Window Policy - 1992 Environmental Protection Act (1996) and Regulation (1997) National Environmental Impact Assessment Guidelines - 1993 Industrial Policy – 1992 Industrial Enterprises Act - 1992 Land Acquisition Act Company Law ETC
- 9. Key Agencies Involved Ministry of Energy Policy / Planning and Approvals Department of Electricity Development Government Interface with Private Sector Water and Energy Commission Policy, Monitoring and Coordination Nepal Electricity Authority Monopoly vertically Integrated Power utility, Sole Power Purchaser, Grid Owner/Operator Tariff Fixation Commission Fixes the tariff Ministry of Environment ESIA Approvals/Clearances and Monitoring Investment Board Promote HP Projects > 500MW Private – Sector Financers Banks , Financial Institutions (Fis) Private Developer Mainly Generation
- 10. Current Initiatives • Up to 100 % FDI • One Window System For Environmental Clearance And Licensing • Establishment Of Nepal Electricity Regulatory Commission To Regulate The System And Create Level Playing Field For All – Awaiting Legislative Approval • Proposed Open Access To Transmission System • Legal Provision w.r.t. Acquisition Of Land For Construction • Fiscal incentives Repatriation of profit and investment Guarantee for non-nationalization of property Concession in import duties Rebate on government royalty amount for first 15 yrs Full Income Tax holiday for first 10 yrs. of CoD and at 50% for next 5 yrs. (for domestic supply projects)
- 11. Current Initiatives • GoN has already allocated>300 Licenses, total capacity over 18,000 MW • Key International Players in Nepal Power Sector • Various projects with total capacity > 5000 MW are ready for embark in construction: Bankable documents are in place BRASSPOWER KWater
- 12. Current Initiatives • Development of 1st Indo-Nepal 400 kV Cross Border Transmission Line (D- M) in advance stage : SAARC Regional Grid • Upgrading/new construction of domestic transmission grids (to 220 kV and 400 kV level) • Formation of Nepal Investment Board to facilitate development of large infrastructure projects, including hydropower project > 500 MW capacity • Establishment of Hydropower Investment and DevelopemntCompany to fund small/medium hydropower projects • Indo-Nepal Mutual interest on: Karnali Chisapani MP Project (10,800 MW) Mahakali Treaty (6,800 MW) Koshi High Dam (3000 MW – preparation of DPR ongoing In April 2013, Major Political Forces Inked a Strong Joint Commitment for the Development of Hydropower Sector
- 13. Challenges Despite high priority for the development of hydropower sector by recent Governments; meaningful development of the sector is yet to realize: • Sudden Demise of Arun 3 (402MW) Project in 1990 ensued a prolonged set back to the sector • Subsequent decade long insurgency and Political Transition post 2007 • Consolidation and Fine Tuning of Existing Policies, Acts and Regulations – Learning Phase • Insufficient Local Fund and Low Tune of Foreign Investment • Increasing ESIA Scrutiny • High Seasonal generation variation due to domination of RoR type projects in NEA Grid • Transmission Bottlenecks in National Grid • Delays in Cross Border / Regional Interconnection and Cooperation
- 14. Some Take Home Themes from The Congress • Nepal ranks no 1 across the globe among the “Small Countries with Big Hydro Potential” • Sustainable Hydropower for Regional Development - Eliminate “Energy Poverty” of your own people - Bring Market to the Resources (already in place) - Regional Interconnections (drivers in places) - Bring Power to the Market for Fuel Replacement - Energy Security with better energy mix - “Landlocked” vs “Landlinked” - “Unbundling of the bilateral legacy” • National Energy Policy addressing sale as: - a raw material - or Final Product, linking generation with low carbon energy supply industry (Iceland, SCORE)
- 15. Some Take Home Themes from The Congress • De-structure the conventional mindset that political stability is a pre-requisite for Hydropower Development in Nepal • “Sustainable Hydropower” Development can be the catalyst for building political consensus in Nepal; Regional cooperation can go hand in hand Unbundling the issues and focusing on the Hydro sector Recent political commitment was a private sector initiative • What is Sustainable for Nepal ? • How can the international community, particularly WB, ADB, IFC support us to establish the definition of “Sustainable Hydropower” for Nepal • NHA will be honored to take this initiative in collaboration with IHA and other stakeholders
- 16. Thank You!