This article appears in the current issue of ‘NEA-JC News Letter’ (Year 2: Issue 2; April 2009) which is the publication of Nepal Engineers Association Japan Chapter (NEA-JC). In fact, this write-up is a revised version of the post entitled ‘The power politics in new Nepal’ posted on September 18, 2008. I am posting the revised article especially for those who have not read it before. The complete issue of the ‘NEA-JC News Letter’ is available here.
"Nepal ko paani, pragati ko khani" (which means, the key to Nepal's development lies in the extensive harnessing of its water resources) is a popular catchword in Nepal, but ‘paani’ (water) never got a strategic place on the developmental agenda, till the nation was left with no other choice but to impose a load shedding of 16 hours a day. The government's policies & programmes passed by the present constituent assembly focus its curricula in the hydropower development. It acknowledges the fact that economic revolution in Nepal is not possible without the development of its water resources. However, sincerity in the efforts made by the government to achieve its ambitious target of producing 10000MW of electricity in the coming decade continues to be under scanner.
Nepal has more than 6,000 rivers and rivulets from which an overall average annual run of 225 billion cubic meters of water flows towards south (India). The gradient of Nepal, which rises all the way up to 8,848m in the north, enriches it with the tremendous hydropower potential. However, these facts are good only for the academic purpose unless we seek a vision to tap this huge hydro-potential for electricity generation. We have been talking tirelessly about the possibility of exporting electricity to India but the truth is that we are on the threshold of moving to the darker days. The electricity supply is not enough to meet even the existing demand and the annual demand is increasing with a rate of over 10%. It is clear that we are in desperate need of electricity not only to meet the current demand but also to boost up the developmental plans. The possibility of establishing the heavy industries like cement, steel etc. and launching the advanced means of transportation systems like trolley bus, rail network and cable cars, can not be ruled out if the nation is to transform itself into a developed state. This will further increase the demand of electricity.
There can not be any alternate to the need to develop hydropower on a greater scale in order to gear up for a dream sustained economic growth in Nepal. And, the fact that we have a power hungry giant neighbor, India, provides more than enough reason to give a second thought to the speed and volume of electricity that we should plan to produce. India’s total electricity installed capacity is around 135,000 MW with a peak demand of around 105,000 MW. However, the peak availability of only about 86,000 MW indicates the huge gap between demand & supply. Furthermore, the annual demand growth of about 8-9% is widening this gap every year. Nepal can thus take advantage of the prevailing power situation in India.
We discussed the need to tap our hydro resources for electricity generation both to meet our domestic energy requirements, as well as to speed up our economy through the sale of 'excess' energy to India. However, it's easier said than done. Where are we going to get the investments from? We need to seek the answers to this question. There is a significant capital in the domestic market which remains under-utilized due to the lack of proper infrastructure required for facilitation of the economic activities. This money can be attracted for the investment in some small to medium type projects. However, to realize the dream of generating 10000 MW in next 10 years, we need big investors (possibly foreign players). At this point, we can't neglect the role India can play. We may obtain investments from or outside India but, we will have to bargain with India when it comes to selling the generated electricity.
Despite several water-sharing agreements (such as the 1954 Koshi treaty and the 1996 Mahakali treaty), lack of mutual trust between India and Nepal prevented effective utilization of Nepal's huge hydro resources. As far as water is concerned, India constantly cites the Bhutan example and wonders why Nepal can’t follow the Bhutanese footsteps. It is important to mention here that Bhutan has allowed India to build several dams over its rivers that produce electricity. And, the surplus electricity is sold to India. As a result, Bhutan’s per capita income has become only second to Sri Lanka in the South Asian region. However, the Bhutan comparison is, probably, a bad diplomacy by India simply because it annoys Nepal each time India makes it. It’s worth mentioning that there exists an anti-Indian sentiment in Nepal, thanks to the various border disputes and other existing geo-political scenarios. The negative opinion of India blazes up every now and then in India’s relationship with Nepal.
The feelings apart, we have to live with the reality that Nepal is and will remain surrounded by India (particularly, in the south) and, India is the ultimate buyer of our produced power. Does it mean that we have to sacrifice our self interest and honor while dealing with India on the energy front? The answer is: no! Nepal can tactically play its cards before arriving on any sort of agreement. India may be a big player in the region, owing to its huge economy and territory; but, at the same time, it has got some problems that can only be solved through Nepal's co-operation. For example, the Koshi flood problem (the recent Koshi floods created more havoc in India than in Nepal). Any future agreement should be based on give & take principle: a win-win case for both sides.
Few months back, the government came up with a vision on hydropower development and I hope that it’s not a mere 'slogan'. If Nepal could fast-track its hydro resources to produce 10,000MW in next 10 years, of which it exported the surplus power to India, it could earn billions of money every year. The policy makers are required to deal tactfully with India on the energy front and act in the country's highest interest. If we really strive to fight against the prevailing ‘darkness’, we need to have an honest vision and the firm commitment. It’s been said that "with a hammer in hand, everything looks like a nail".
Nepal has more than 6,000 rivers and rivulets from which an overall average annual run of 225 billion cubic meters of water flows towards south (India). The gradient of Nepal, which rises all the way up to 8,848m in the north, enriches it with the tremendous hydropower potential. However, these facts are good only for the academic purpose unless we seek a vision to tap this huge hydro-potential for electricity generation. We have been talking tirelessly about the possibility of exporting electricity to India but the truth is that we are on the threshold of moving to the darker days. The electricity supply is not enough to meet even the existing demand and the annual demand is increasing with a rate of over 10%. It is clear that we are in desperate need of electricity not only to meet the current demand but also to boost up the developmental plans. The possibility of establishing the heavy industries like cement, steel etc. and launching the advanced means of transportation systems like trolley bus, rail network and cable cars, can not be ruled out if the nation is to transform itself into a developed state. This will further increase the demand of electricity.
There can not be any alternate to the need to develop hydropower on a greater scale in order to gear up for a dream sustained economic growth in Nepal. And, the fact that we have a power hungry giant neighbor, India, provides more than enough reason to give a second thought to the speed and volume of electricity that we should plan to produce. India’s total electricity installed capacity is around 135,000 MW with a peak demand of around 105,000 MW. However, the peak availability of only about 86,000 MW indicates the huge gap between demand & supply. Furthermore, the annual demand growth of about 8-9% is widening this gap every year. Nepal can thus take advantage of the prevailing power situation in India.
We discussed the need to tap our hydro resources for electricity generation both to meet our domestic energy requirements, as well as to speed up our economy through the sale of 'excess' energy to India. However, it's easier said than done. Where are we going to get the investments from? We need to seek the answers to this question. There is a significant capital in the domestic market which remains under-utilized due to the lack of proper infrastructure required for facilitation of the economic activities. This money can be attracted for the investment in some small to medium type projects. However, to realize the dream of generating 10000 MW in next 10 years, we need big investors (possibly foreign players). At this point, we can't neglect the role India can play. We may obtain investments from or outside India but, we will have to bargain with India when it comes to selling the generated electricity.
Despite several water-sharing agreements (such as the 1954 Koshi treaty and the 1996 Mahakali treaty), lack of mutual trust between India and Nepal prevented effective utilization of Nepal's huge hydro resources. As far as water is concerned, India constantly cites the Bhutan example and wonders why Nepal can’t follow the Bhutanese footsteps. It is important to mention here that Bhutan has allowed India to build several dams over its rivers that produce electricity. And, the surplus electricity is sold to India. As a result, Bhutan’s per capita income has become only second to Sri Lanka in the South Asian region. However, the Bhutan comparison is, probably, a bad diplomacy by India simply because it annoys Nepal each time India makes it. It’s worth mentioning that there exists an anti-Indian sentiment in Nepal, thanks to the various border disputes and other existing geo-political scenarios. The negative opinion of India blazes up every now and then in India’s relationship with Nepal.
The feelings apart, we have to live with the reality that Nepal is and will remain surrounded by India (particularly, in the south) and, India is the ultimate buyer of our produced power. Does it mean that we have to sacrifice our self interest and honor while dealing with India on the energy front? The answer is: no! Nepal can tactically play its cards before arriving on any sort of agreement. India may be a big player in the region, owing to its huge economy and territory; but, at the same time, it has got some problems that can only be solved through Nepal's co-operation. For example, the Koshi flood problem (the recent Koshi floods created more havoc in India than in Nepal). Any future agreement should be based on give & take principle: a win-win case for both sides.
Few months back, the government came up with a vision on hydropower development and I hope that it’s not a mere 'slogan'. If Nepal could fast-track its hydro resources to produce 10,000MW in next 10 years, of which it exported the surplus power to India, it could earn billions of money every year. The policy makers are required to deal tactfully with India on the energy front and act in the country's highest interest. If we really strive to fight against the prevailing ‘darkness’, we need to have an honest vision and the firm commitment. It’s been said that "with a hammer in hand, everything looks like a nail".
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8 Comments:
nice article. I like the end when you write "with a hammer in hand, everything looks like a nail". keep it up.
by the way, I could not find the News-Letter at the website of NEA-JC.
gud article...
people says Nepal has possibility of 86K mw hydro-electricity and water resource counts rank II in the whole world. but still we are experiencing the huge power cut. just like the gold is in lahsa, my ear has nothing...
hydro electric projects costs a lot which our existing GDP cant bear at all. so in my opinion - such big projects should be fully opened for foreign investment practically..but yes, as you said it should be win-win solution for all side.
otherwise our ear cant get any ornament forever... and gold in lahsa remains in lahsa forever...
Deependra ji, very nice and relevant article! We need to generate a lot more electricity even to meet our domestic demand, let alone export to india and so. May the catchword "Nepal ko paani, pragati ko khani" someday come true!
Ramesh
Though I have very less knowledge about this very matter, I still feel that there is sufficient liquidity in market, and if we are determined, constructing some small and middle scale hydel projects in our own (both technically and financially) won't be a big problem.
At the same time, I also feel that our leadership will be able to get maximum possible benefit, if the cards are played 'tactically' as you have mentioned in this post.( But 10000 mw will still be a dream, even the cards are played magically)
Very nice article based in the practical grounds.
very nice and valuable article dependra je. keep it up .
Thanks to Deependra ji for a nicely written article.
I will like to add few things. We all agree that utilization of Nepal's water resources will lift our economy. India will be the ultimate buyer of our electricity if large hydropower stations with aim of selling electricity are constructed in the future. India will not only benefit from electricity produced from our rivers but also benefit from regulated flows in their rivers which is very crucial to solving India's long term food security and drinking water supply problem. We have to act cautiously and must get reasonably good value from India for the development of water resources in Nepal. Nepal has to lobby hard so that India agrees to share downstream benefits from the large storage dams that are built in Nepal to generate electricity. This is a well established practice (similar agreements exists between US and Canada, South Africa and Lesotho which is surrounded by South Africa, to name few) worldwide. One of the contentious issues that has blocked large scale hydropower development in Nepal is reluctance by India to share downstream benefits which in few cases are estimated to be higher than the benefit from sale of electricity. Nepal has already lost out in 750 MW West Seti project which is storage type. So, we must act carefully and cautiously. Regarding the current prime minister's vision(?) of generating 10000MW in the next 10 years, it is possible only if we are ready to sacrifice many things like less benefit from sale of electricity, less royalty, low or no downstream benefit, ignorance to environmental protection, apply force to acquire land and resettle the displaced populace, etc. Our country lacks honest and competent leaders who can provide stimulus to our bureaucrats and technocrats who are the ultimate people responsible for preparing the draft of any such agreements that will open the door for "Ujyalo" to Nepal's power sector development.
The question you raise about India seems very genuine. Nice and relevant article. Keep it up.
Very nice and intresting article.
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