IHA 2013 World Congress: Nepal Hydropower Association: Hydropower Development in Nepal


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Mr Bhanu Pokharel, General Secretary, Nepal Hydropower Association

For more information about this event, visit: http://ihacongress.org

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IHA 2013 World Congress: Nepal Hydropower Association: Hydropower Development in Nepal

  1. 1. Bhanu PokharelNepal Hydropower AssociationHydropower Development in NepalPresented at theIHA 2013 World Congress
  3. 3. Background• Nepal, situated in the foothills of Central Himalayas, is a countryhaving extreme physiographic and climatic contrasts comparedto its small area of 147,181 sq. km.• The steep topography and the high run-off (225 B M3/yr.) offeropportunities of generating hydropower in the corridors ofNepal Himalayas.• Young Republic with a Population of 27 M• Total estimate Potential for Development of Hydropower83,000 MW; 43,000 MW is economically viable• First Hydopower Project was built in 1911 (500 kW)
  4. 4. MAJOR RIVER BASINS AND PROPOSED PROJECTSKOSHI BASINGANDAKI BASINKARNALI/MAHAKALI BASINKarnali Chisapani 10,800MWPancheshor 6480MWUpper Karnali 900MWWest Seti 750MWKali Gandaki-2 600MWBuri Gandaki 600MWU/ Marsyangdi 600MWU/Tamakoshi 456MWTamakoshi -3 650MWSaptakoshi 3000MWArun-3 900MW
  5. 5. Present Scenario• 693 MW HP Developed in 101 years, < 2% of economically viable potential• Nepal Electricity Authority (NEA) - a state owned utility responsible forGeneration, Transmission and Distribution of electricity in NepalIndicators Now In Yr. 2017Installed CapacityEnergyHydro746 MW (Hydro/Thermal 693/53 MW)4200 GWh693 MW2500 MW7604 GWh2450Peak Demand 1163 MW 1770 MWTotal PPA Signed by NEA 1650 MW / 1450 MW undervarious stage of Development~ 2650 MW (incl. 150MW import from India)Demand / Supply Match Huge un-served demand/load shedding upto 16hrs/daySurplus for seasonalexport / still deficit indry season
  6. 6. Opportunities• > 98 % of The Viable Hydropower Potential (43,000 MW) Available ForDevelopment. Portfolio of Project Ranging from Few Hundred Kw to10,800 MW• Domestic Demand In Nepal By 2030 : 5000 MW• Huge Potential Available For Development to Cater the RegionalDemand of South Asia• Geographic Proximity of Hydropower Sites In Nepal With MajorLoad Centers In India – Low Transmission Cost• Regional Cooperation For Long Term Energy Security – India’sThermal Dominated System, B’desh Natural Gas Resources andNepal and Bhutan’s Hydro Potential to Ensure Optimal GenerationMix
  7. 7. Nepal’s Initiatives for Development of The Sector• Govt. of Nepal (GoN) has given high priority for private sector investmentin the electricity sector• National Plan has identified export of power along with the expansion ofnational and cross border/regional grids as a national priority projects.• HP sector open for development to Private sector in 1990. Investmentfriendly 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
  8. 8. Key Agencies InvolvedMinistry of Energy Policy / Planning and ApprovalsDepartment of Electricity Development Government Interface with Private SectorWater and Energy Commission Policy, Monitoring and CoordinationNepal Electricity Authority Monopoly vertically Integrated Powerutility, Sole Power Purchaser, GridOwner/OperatorTariff Fixation Commission Fixes the tariffMinistry of Environment ESIA Approvals/Clearances and MonitoringInvestment Board Promote HP Projects > 500MWPrivate – Sector Financers Banks , Financial Institutions (Fis)Private Developer Mainly Generation
  9. 9. Current Initiatives• Up to 100 % FDI• One Window System For Environmental Clearance And Licensing• Establishment Of Nepal Electricity Regulatory Commission To Regulate TheSystem And Create Level Playing Field For All – Awaiting LegislativeApproval• 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. (fordomestic supply projects)
  10. 10. 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 inconstruction: Bankable documents are in placeBRASSPOWERKWater
  11. 11. 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 and400 kV level)• Formation of Nepal Investment Board to facilitate development of largeinfrastructure projects, including hydropower project > 500 MW capacity• Establishment of Hydropower Investment and DevelopemntCompany tofund 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 ongoingIn April 2013, Major Political Forces Inked a Strong JointCommitment for the Development of Hydropower Sector
  12. 12. ChallengesDespite high priority for the development of hydropower sector byrecent Governments; meaningful development of the sector is yet torealize:• Sudden Demise of Arun 3 (402MW) Project in 1990 ensued a prolonged setback 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 projectsin NEA Grid• Transmission Bottlenecks in National Grid• Delays in Cross Border / Regional Interconnection and Cooperation
  13. 13. Some Take Home Themes from The Congress• Nepal ranks no 1 across the globe among the “Small Countries withBig 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 energysupply industry (Iceland, SCORE)
  14. 14. Some Take Home Themes from The Congress• De-structure the conventional mindset that political stability isa pre-requisite for Hydropower Development in Nepal• “Sustainable Hydropower” Development can be the catalystfor building political consensus in Nepal; Regional cooperationcan go hand in handUnbundling the issues and focusing on the Hydro sectorRecent 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 “SustainableHydropower” for Nepal• NHA will be honored to take this initiative in collaborationwith IHA and other stakeholders
  15. 15. Thank You!