A Glimpse & Challenges

in SHP, NepalBy: Sagar Shrestha

E.no: 14512031

AHEC,IIT ROORKEE

M.Tech 1st Year

Where is Nepal ?

Nepal, g]kfn

INTRODUCTION

Country of Mt.Everest (8848 meter) , with world top 8

tallest mountains.

Birth place of Lord Gautam Buddha.

Country of living god, Greenery ,Jadibutis ,biodiversity.

Location : 26 22’ East longitude, 80 04’ North – 88 12’

North

Land lock country : - India in the East, South and West

and China in the North.

Area : 147181 sq km.

Population :- 26 Million.

Geographical division : Mountain(15%) , Hilly(68%) and

Terai(17%).

More than 6000 rivers originated from Nepal flows to

India.

HYDRO POWER POTENTIAL IN NEPAL

There are about 6000 big and small rivers in three major river

basins namely Koshi, Gandaki and Karnali.

The average annual precipitation is approximately 1700mm

(80% of which occurs during the monsoon season-June to

September).

The total annual average run-off from the nation’s 6000

perennial rivers flowing from high mountains is over 200

billion cu.m.

Estimated water storage potential = 88 billion m3

Estimated theoretically potential hydropower = 83,000MW.

Estimated Technically viable Hydropower = 43,000 MW.

History of Hydro Power

The first Hydro Power plant is Pharping Power

Plant, 500 KW.

Constructed on 22 May 1911,by Rana Prime

Minister Chandra Samsher for the use in his

palace. Supported by British Government.

One of the largest hydro power project in the

South Asia during that time.

Still it is in operation, Government announced it

as “OPEN MUSEUM”.

Classification of Hydro Power

Micro Hydro <1,000KW

Small Hydro 1,000KW – 5,000 KW

Medium Hydro 5,000KW – 30,000KW

Large Hydro >30,000KW

Fuel wood, 77.70%

Hydro energy, 2%

Ag. waste, 3.70%

Animal Dung, 3.70%

Coal, 1.90%Renewable, 0.20%

Imported fuel, 8.20%

0.00%

10.00%

20.00%

30.00%

40.00%

50.00%

60.00%

70.00%

80.00%

90.00%

Fuel wood Hydro energy Ag. waste Animal Dung Coal Renewable Imported fuel

Energy Scenario

Sales

Different Stakeholders in Hydro power Development

Ministry of Water Resource.

Ministry of Energy.

National Planning CommissionFor planning and policy research..

Water and Energy Commission.

Department of Electricity Development(DoED).

Responsible for assisting the Ministry in implementation of overall government policies

related to power/electricity sector. Ensure transparency of regulatory framework,

accommodate, promote and facilitate private sector's participation in power

sector by providing "One Window" service and license to power projects.

Nepal Electricity Authority (NEA).

State owned utility company,

Responsible for Generation , Transmission & Distribution.

Alternative Energy Promotion Center (AEPC).Rural Electrification, Micro Hydro Development

solar ,Biomass and wind energy development.

Nepal Investment Board.

For the projects higher than 500MW.

Independent Power Producer (IPPs). Generation and Distribution

Total Installed Capacity : 757.39 MW

Total Peak Demand : 1095 MW

Imported From India : 130 MW

High generation In winter but less

demand and less generation in dry

season and high demand.

Most of the Power plant are RoR

type.

• NEA supplies only 53.35% , nearly 130MW imported from India.

• Surplus is managed by load shedding.

• System loss of 25%.

Licensing Procedure

The Electricity Act 1992, sets the following time limits.

• Survey license to be issued with in 30 days.

• Validity of such license till 5 years.

• Project license to be issued with in 120 days.

• Validity of such license till 35 years.

Supporting Documents for the license.

Feasibility study report , including• Detailed project report ,description of transmission line.

• Approved IEE/EIA report.

Detailed financing plan ,including

• Estimated cost of the project

• Financial capability of the investors.

• Commitment of the financial institutions.

• PPA document with NEA

Supporting Documents for the license.

Other documents.

• Certificate of registration

• Memorandum of article.

• Memorandum of association.

• Industrial registration certificate.

• PAN(permanent account number) etc.

Challenges in SHP development:-

a) Policy Inconsistency

Changing in policy( National hydropower policy-1992, 2001)

License valid time decreased from 50 years to 35 years.

Scrapping of income tax holiday.

Implementation of VAT.

b) Planning deficiencies:

Policy making institution is supposed to be less charmed , no government

officials want to be a part.

Lack of holistic and strategic planning mechanism.

lack of agency for planning implementing and operation of transmission line to enable wheeling

of Electricity with in the county and to the neighboring country and policy making.

c) Licensing anomalies

Holding license by individuals without technical understanding nor financial Capabilities.

Hoading of license is a serious issue.

d) Constraints related to PPA:

Lack of transparency favorable for purchaser.

Procedure is slow with no time limit.

Not review of PPA rate.

e) Financial constraint:

Priority sector for investment.

Limitation on injecting loans due to central bank policy.

Lack of in-house technical personal to carry out risk analysis & advantages.

f) Environmental constraints:

Governed by Environmental protection act-1991,

Environmental protection regulation -1993

Time consuming IEE/EIA reports.

Unnecessarily concerned with many line dept./ministries.

Bureaucratic hurdle in acquiring land on lease.

g) Physical security concerned:

Social physical insecurity , deal with unnecessary elements.

Have to bear heavy charge on exclusive acquiring ,transportation and use .

Security arrangement should be streamlined , not to pay more on security and

blasting operation.

h) Social problems:

Social insecurity due to local elites. Miss use and excess freedom in the name

of democracy.

Extra demands on infrastructure and due to 1% royalty.

No serious initiation by government in field against any victimization through

Dual taxation or violence.

Insurgency was a tough period for the developers.

i) Rehabilitation and Resettlement (R&R)

Project affected people (PAP).

j) Political instability and Insurgency.

The period of insurgency till 2005 , all the projects were halt.

5 Prime minister within 8 years from 2006.

Policy changes according to the change of government.

Construction time consuming in the name of variations.

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