Power producers slam budget

The much-awaited budget for the fiscal year 2010-11 has encouraged large industries by promising them road access, water and power supply.

However, the power producers think that without generating more power, the government cannot provide electricity to the industries.

"The private power producers have contributed 25 per cent of the total electricity generated in the country," said Dr Subarna Das Shrestha, president of Independent Power Producers' Association, Nepal (IPPAN) here in the Valley today. "But the budget has completely ignored us."

The country is reeling under four hours of load-shedding everyday at present and the power outage is going to increase to 14 hours a day in dry season (April-may), he said, adding that the government has promised to generate 25,000 megawatt (MW) of power in 20 years in the budget for 2009-10. "However, it has forgotten its promise and have not brought any programmes to encourage the power producers in this budget."

According to Gyanendra Lal Shrestha, coordinator of Hydropower Development Forum at the Federation of Nepalese Chambers of Commerce and Industry (FNCCI), the hydropower projects not only create employment but also generates economic activities in the rural areas. "Hydropower generation can accelarate the economic growth."

"The country imported Rs 10 billion worth fossile fuel and Rs 5 billion worth batteries and invertors to meet the increasing power need in the last fiscal year," he said, "Had the government taken some measures to substitute these imports by encouraging the power producers, the country could have saved Rs 15 billion," he added.

The number of electricity consumers in the country is estimated to have increased by 12 per cent to 1,879,000 by the end of the fiscal year 2009-10. The electricity consumers grew by 10 per cent in fiscal year 2008-09 to 1,677,000, according to Economic Survey of fiscal year 2009-10. "Total electricity generation in the country has reached 714 MW including electricity generated from rivers, thermal power and solar plants."

The electricity demand is also increasing by 10 per cent annually. "But in the last fiscal year, only two to three MW has been added due to government's apathy towards the private power producers," said Shrestha.

Hydropower projects have 90 per cent value addition, whereas the cement industries have 60 per cent, but the government has prioritised cement industries and ignored the hydropower producers, according to Pradhan. "How can the cement industries operate without power?"

The survey has forecast energy consumption for household purpose at 41.70 per cent and industrial and commercial purpose at 38.1 per cent and at 6.70 per cent respectively in 2009-10. "Similarly, out of the total 130.77 Gega Watt Hours (GWH) of electricity supplied in 2008-09, private sector generated 925.74 GWH."

Of the total of 661 MW hydropower generated from different projects, 655 MW of the total power is connected to national grid, while the rest general by small hydropower stations are distributed at local level.

Though the construction of Chamelia (30 MW), Kulekhani III (14 MW) and Upper Trishuli 'A' (60 MW) are underway, they too can't be expected to fulfil the demand by the time they start generating power.

Nepal Electricity Authority entered into power purchase agreement (PPA) with the private sector for 121 MW from 21 projects in 2009-10. "If the PPA is increased, according to the market price hike, more private power producers will come forward to develop hydropower projects," said Pradhan.

Currently the PPA fixed by the NEA is Rs 4.55 in an average. "But it is too less as the government is paying more to buy electricity," he said, adding that the government could encourage the private power producers by increasing the PPA.