Tuesday, December 23, 2008

Dire Electricity Crisis in Nepal : Darkness grows beneath the Everest

Electricity has been playing a game of cat and mouse in Nepal . Out of the 24 hours, it is on only for 16 hours. Nepalese are forced to live without electricity for 8 hours, six days a week – 48 hours per week. Just imagine yourself living without electricity for such a long time in New York , Seoul , London and Sydney , and then realize how much the Nepalese are suffering. Is Nepal returning towards the Stone Age? Well, this is Nepal, a nation with huge hydropower potentials (this is limited to the papers only), where the electricity supply has been overrun by simple of simplest demand of a meager 720MW peak load demand and this has led The Nepal Electricity Authority (NEA) to rationing power (load shedding) to its customers all over Nepal. Never- ending Political uncertainties, terai unrest, acute fuel shortage, and now this mammoth electricity crisis has stolen smiles from the face of ordinary Nepalese, whose nation had started producing energy from water resources through Pharping hydro power plant much ahead than China. But look at Nepal today and look where China today is terms of energy security. Fearing the possible future power crisis, China is investing $125 billion in power plants over the next five years and another $130 billion in distribution paths for the power they produce according to the media reports. But China is a big and populous nation, and it needs these massive investments to keep the nation floating, you might argue. Yes, it is, but yet it shows how serious is China about its future power needs. In the interim, let us turn back to Nepal . The recent load shedding has not sprouted all of a sudden. The possible occurrence of the load shedding had been forecasted by the experts few years ago, but the government, completely occupied by other complex issues such as signing the peace deal with the Maoists turned deaf ear towards these forecasts. They either did not care or did not have the necessary vision to solve the energy problem. And on top of this they are giving lame excuses about the weather. It’s the best option chosen by them because if you blame the weather, then the weather won’t retaliate back. What a scapegoat the authorities have chosen. There is a shortage of power during winter and recent load shedding suggests the need for storage projects as the system is dominated by run- of- the river projects. Thus, instead of blaming the weather, had they build storage projects then this inevitable would been at least minimized. But unfortunately it was not to be so. Normal life has been crippled by the load shedding. Ordinary people have to make plans according to the schedule of the electricity, a perfect example of man being the servant of the technology. You want to study but you cannot because there is no light; your computer never works when you want it to; your refrigerated goods get rotten; in the kitchen rice cooker is just a show pot; your TV is just another useless tool; every now and then you get irritated by the power failure and economically speaking constant blackouts deteriorates your production level and hampers your country’s economy. The power cuts in Nepal are not good for its growth. Lower productivity means higher costs for finished goods and people will feel that in their pockets when they visit the market. So what’s going on? And why isn’t it getting sorted out? The problem is grave: shortage of supply caused by a huge rise in demand. Nepalese businesses, enterprises, communications, industries, education and service sectors have been so much hit that overall capacity utilization of the industrial units due to load shedding has come down to about 40-50 per cent. This has already crippled Nepalese economy and this is not a good sign for a nation that is trying hard to sprout out from the vicious circle of poverty. In the midst of this electricity drought, you feel depressed at times. And you feel like immigrating abroad. You curse your government, your leader and your fate and you want to go, where there is light, 24 hours a day. But wait, it is not just Nepal where power is a problem. There is massive power problem is South Africa . And in recent months there have been endless reports of shortages in various countries such as Cuba , Argentina , some African nations, Iraq , Bangladesh , India , and in Thirteen Chinese provinces. And not to forget Queens, a city in New York , and its 100,000 or so people who were left to live without electricity for nine days in 2006. And experts fear that there is every chance of Britain being next South Africa if immediate action is not taken. The reason is simple: Out of 59 coal-powered plants, 15 or so are out of order according to the reports. Meanwhile, we don’t need an expert to tell us that electricity demand is soaring all over the world and there is a narrowing gap between usage in the developing and the emerging world. The reality is right before our eyes. Electricity demand has risen all over the world and it will continue to rise. British Petroleum forecasts electricity demand to double by 2030, and now the Kyoto protocol is encouraging countries to focus on alternative power generation. Regionally speaking, just imagine how much power is needed to afloat the Chinese – Indian economy? Together China and India are the home to world’s 40% population and this means world need’s more energy than it thinks to roll these nations. Imagine, how much power is needed for every family in China and India , and remember, economically they are growing dramatically. In the year 2007, India grew by 8.5% and China by 11.4%. These are good signs but also remember that growth means more prosperity and more prosperity means more power consumption. Hence, considering so, Nepal needs less power than these rising giants. Judging by the GDP growth of its last five years which hovered around an unhealthy average of 2.1 %, and given the political crisis, there are every chances of its economy hovering around that average for years to come. Thus, there shall be a slight change in our total winter peak load demand of 720 MW as of today. But Nepal will surely grow in the future and for Nepal to grow, energy security is the ultimate precondition. In the course of time, our economy will definitely creep toward a healthy average of 3.5 – 4%, given that our political uncertainties are solved. Hence, if prompt action is not taken today, then Nepal will suffer from massive power cuts in the future too. Nepalese policymakers and leaders must wake up from their slumber to solve this mammoth crisis because Nepal has the prime resource needed to generate the electricity - water. There is some comfort in the fact that Nepal has more than 6000 rivers and majorities of them are capable to turn the turbine and generate electricity. What Nepal needs is capital and there is a dearth of capital in Nepal hence considering so Nepal needs foreign investment. But finding investors is not easy and even if you find one, they may abstain from investing in the hydropower because it is costly and time consuming. They got to wait for several years to refill their invested capital and then few years more for profit. And there is this never ending political uncertainty in Nepal followed by our lackluster policy. Being pessimist is a waste of time, so let us think from an optimistic point of view. But even so the picture is not that rosy. Take this example for instance, recent figures show that 154 MW of energy in Nepal is generated by private sectors, and the Nepal Electricity Authority (NEA) 400W. And add to these figures another 80MW which is in the process of being added from India . That leads to the total of about 634 MW. Or in other word, Nepal ’s total electricity capacity is 634 MW. But the problem for Nepal is this: During the winter season, the peak load demand for Nepal is estimated at about 720 MW whereas the production is only half the total demand. There is a huge difference between its supply and demand. It’s not that Nepal is running out of the solution. We have some reliable and lasting solution but for this we have to wait. But for how long, no one knows. And in the long run, as Keynes said we all are dead. You might say, why this heights of pessimism. The truth however is this: No ones knows the fate of much published and talked about hydro power projects such as West Seti (720 MW), Upper Karnali (300 MW), Arun III (400 MW), Tamakoshi (309 MW), Budhi Gandaki (660 MW), Likhu (125 MW) and Super Marsyangdi (275 MW). Let’s play a mind game. If you add these all, then it would lead to 2789 MW. That’s a healthy increase from 634MW or 554 MW (minus 80MW expected from India ) and we can sustain somehow with this increment at least for a decade or less. But these scenarios are now limited to the papers only. No one knows when these projects shall be completed as these projects in aggregate require huge investments and time. But unfortunately Nepal doesn’t have both of these privileges. And what makes the future scenario gloomy is the current policy strategy framework. No one knows what the government’s Electricity policy is nor does one know the real motive of the NEA. And the investor’s policies are also debatable on various grounds and the risk - political, social or infrastructural - remains enormous. All this means that load shedding won’t go away any time soon. Article by: Bhuwan Thapaliya

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