West Seti Hydropower in limbo

It looks like another company is going to pack its bag. China Three Gorges International Corporation, the potential builder of West Seti Hydropower Project (750 MW), showed dissatisfaction over the Power Purchase Rate Policy proposed by Nepal Government. Storage project like West Seti is entitled to receive NRs. 12.40 per kWh and NRs. 7.10 per kWh during dry and wet season respectively.

Soon after the news floated in the media, some nationalists were quick enough to blame India.

Before making any comments, let’s do a simple assessment to find out why Chinese company decided to leave.

The energy production of West Seti Hydropower Project (750 MW) during wet and dry season are 2,485 GWh and 508 GWh respectively (source:- Office of Investment Board). This makes annual revenue of NRs. 31.924 million per MW which is slightly more than RoR projects (just by NRs. 1 million approx.) , and surprisingly less than Peaking RoR projects (Rates for Peaking Run of River).This explains it all, and no further assessment is required in my opinion. Why would any investor construct a storage project when the benefits it receives by constructing a storage project is more or less similar to RoR projects?