Nepal declares energy emergency to end power crisis

Kathmandu, Feb 19 (IANS) The Nepalese government has declared an energy emergency in the country targeting an end to the ongoing power crisis within the next two years.

It is the third time that the government has declared energy emergency in the last eight years — the previous declarations have ended in disappointment. Nepal is currently facing load-shedding of 13 hours a day, Xinhua reported.

The cabinet on Thursday endorsed “The National Energy Crisis Reduction and Electricity Development Decade plan” which aims to make available 1,850 MW of electricity during the dry season in the next two years.

The government is confident that it will end the load-shedding in the country completely during the period as the peak hour power demand during the period is expected to remain at 1,550 MW.

The country’s installed hydropower energy capacity currently stands at 780 MW in peak hour which drops to 300 MW during the dry season. In order to meet the energy demand, Nepal has been importing 280 MW from India.

Import from India will play a crucial part in meeting Nepal’s power demand during the period as the Nepalese government aims to import 580 MW of electricity from the southern neighbour in the first year.

The import will be reduced to 92 MW in the second year when domestic production is expected to rise, according to the Energy Emergency Plan.

As per the plan, there will be production of 200 MW from solar and wind energy and storage hydropower projects will produce 930 MW of electricity during the period.

Currently, there is a single storage-type hydropower project with capacity of just 32 MW. There has also not been any proper feasibility study for big-scale wind energy projects and the country lacks policy and regulatory frameworks in this regard.

“The energy emergency has been declared in order to lessen the impact the severe energy crisis has made on the general lives and economy,” said the country’s Energy Minister Top Bahadur Rayamajhi on Thursday.

At a time when the country has been producing far less than required energy, the April 25 earthquake last year hit a number of operating and under-construction hydropower projects.

Given this context, the plan also talks about extending licences of quake-hit under-construction projects and facilitating loans to them.

In order to attract foreign investors in the power sector, the Nepalese government has also announced signing of power purchase agreement (PPA) with hydropower developers in US dollar terms till payback period of loans.

Signing PPA in US dollar terms has been a controversial issue here because Nepal’s only power utility body, the Nepal Electricity Authority, has been incurring huge losses from the 60 MW Khimti and 36 MW Bhote Koshi, the two projects with which it has signed PPA in US dollar term.

The plan has eased lending criteria for banks to provide loans to hydropower projects in order to mobilise more domestic resource for the hydropower projects.

Under the scheme, banks can now inject 50 percent of their total lending to hydropower projects.

As many hydropower projects have been facing obstruction by political parties and locals on different pretexts, the plan has talked about mobilising forces for the security of hydropower projects with developers bearing the cost.

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