Election Manifesto

Having a huge hydropower potential, all politicians, policy makers and experts have come to a common understanding that hydropower development is a key determinant of the growth potential of Nepali economy. As such, all major political parties have declared to exploit the hydro resources in their election manifestos.

Nepali Congress and the left alliance (CPN-UML and CPN- Maoist Centre) both have announced 15 thousand MW in 10 years. These two major parties are likely to rule this country for quite some time.

Their ambitious declarations, however, may not be translated into reality as we have seen in the past. I highly doubt their claims!

I am actually not bothered about the proposed figures as I believe this is only to attract voters. What bothers me is how they want to achieve their targets.

Nepali Congress

Nepali Congress intends to increase installed capacity of hydroelectric projects to 15,000 MW in the next 10 years from less than 1,000 MW at present. It also says that the power generated in Nepal will be exported. The amount of electricity to be exported will be greater than the domestic consumption. This is where my concern lies.

Nepali Congress has been advocating export oriented hydropower projects. It is creating an illusion of “chicken and egg” situation in electricity when it is clearly not the case. Consumption will increase automatically when you have a reliable source of electricity. Businesses, industries and entrepreneurs will come forward when there is ample of electricity. However, Nepali Congress tends to favour export oriented project citing no domestic market.

There is nothing wrong in exporting excess electricity but, it sounds utterly ridiculous to dream about economic prosperity by selling electricity to India when we are currently relying on India itself to electrify our homes.

Remember, electricity is an input to a wide range of industries and, as such an important driver of long-term growth. The more it is consumed the better will be the economic growth and, there are avenues to increase our consumption.

Apart from industrialization, replacing cooking gas and going green in transportation sector could be the better use of our resources. This could save billions of dollars as we import a huge amount of petroleum products.

In addition, the manifesto of Nepali Congress will not significantly increase per Capita electricity consumption. For this, let’s do a simple assessment (With less than 150 kWh per Capita, Nepal is one of the poorest nations in the World)

The proposed install capacity with an aim to export more electricity will leave only 7,350 MW (assuming 49 percent) for domestic usage in the tenth year. With 1.35% population growth rate (Central Bureau of Statistics Nepal), the population will increase to 33.16 million (approx.) from the current population of 29 million. This will translate to 950 (approx.) kWh per Capita which is comparable to the present stage of India. It seems like the increment will be more than 6 times but in reality, it may not be enough. As mentioned above, we have a huge challenge of reducing the trade deficit with India which is mostly due to import of petroleum products. In addition, about 25 percent of the population does not have access to electricity.

By looking at the assessment, I can tell that the idea of focusing in export oriented projects is not in the national interest of Nepal. Electricity should be treated as a raw material and, one can get significant benefit if it can be used in producing finish products which can be exported for better gains.

While writing this blogpost, I remember a line from a movie called “Swades”. “It is like giving light to neighbours”. Actually it is.

Left Alliance (CPN-UML and CPN- Maoist Centre)

The left alliance has also proposed to generate 15,000 MW in the next 10 years. It has promised to raise per capita electricity consumption to 1,500 kWh within that time frame. Unlike Nepali Congress manifesto, the left alliance is focused on exporting surplus electricity only. This to me is a very good idea.

However, their slogan “Electricity for all Households, Shares for all People” (Ghar Ghar ma Bijuli Jan Janma Share) is something I am concerned of.

In order to construct hydropower projects, an arrangement will be made for maintaining 49 percent of shareholding to the interested Nepali Citizens and Non Resident Nepali (NRN), according to its manifesto. This initiative was first introduced by former energy minister, Janardhan Sharma (CPN – Maoist Centre) and, decided to include in so called left alliance too.

Although this program has been praised by many people when it was launched, I am totally against it.

First, you cannot tell private sector or general people to construct the entire basic infrastructure like electricity on our own. If everything has to be done by ourselves then, what is the point of having government?

Second, private sector (general people) invests their hard earned money for profit. No one can deny the fact and, the profit for investors has to come from the general users in this case. Imagine a situation when all hydropower projects are constructed for profit motive only. In such scenario, the tariff for using electricity will further increase.

We are blaming Nepal Electricity Authority for not doing PPA with private developers. But how can an organization with less than 500 MW of energy portfolio can do PPA with thousands of MWs? The only way to do PPA with them is to hike the electricity price. 

Also, the concept of people participation in hydropower construction has made Nepal government to focus on profit. Projects promoted by NEA (Chilime, Upper Tamakoshi, Sanjen, Rasuwagadhi and Madhya Bhotekoshi) are profit oriented. Had all these lucrative projects been constructed from the fund of Nepal Government, NEA would have a better capacity to do PPA with private developers.

The concept of "Electricity for all Households, Shares for all People” (Ghar Ghar ma Bijuli Jan Janma Share) will encourage Government and its agencies to focus on Chilime model only which will ultimately increase financial burden to ordinary citizens.