Industries warn of protest programme against power utility

 The unscheduled power cut has infuriated the industrialists, forcing them to announce the protest against the power monopoly.

They also warned to lock up Nepal Electricity Authority (NEA) office, if the authority could not supply uninterrupted electricity to the industries along Sunsari-Morang Industrial corridor by Tuesday. “The NEA has disrupted power supply to the industrial area for more than 12 hours daily for the past few days without any notice,” they said at a joint press conference today,

Morang Merchant Association, Industry Association and Confederation of Nepalese Industries (CNI)-Province 1, jointly organising a press meet, said that the industries along the Sunsari-Morang corridor have to be shut down as the power supply has been down for almost 24 hours since Wednesday.

“The industries have suffered huge losses due to unannounced power cuts,” President of Morang Merchant Association Nabin Rijal said, adding that the goods in the machine and in godown have become useless due to  unannounced load shedding. “If the government does not solve the problem by Tuesday, We will be forced to padlock NEA on Wednesday, and announce additional agitation programmes from Thursday onwards.

The industrialists have also demanded to publish the load-shedding schedule, exploit maximum potential of domestic power generation capacity, ensure equitable distribution of electricity, abolish demand charges and find a solution through diplomatic initiatives with India.

At least 500 industries along the Sunsari-Morang corridor have been hit hard due to the unscheduled power cut.

The NEA has been buying 300 MW electricity from India to match the domestic demand. But the demand of electricity has increased in India recently making the import of electricity expensive, which has forced the NEA to impose power cut in the industries. However, the industrialists along the Sunsari-Morang corridor have been asking the NEA to publish the schedule of power outage so that they can plan the operation of the industries. But the authority neither is able to import the electricity from India nor publishing the load-shedding schedule forcing the industries to go for protest programme. The industries hit by the Covid-19 since last two years were trying to operate as usual in full capacity like in the days prior to the pandemic.

Electricity leakage down to 14.45 per cent

Electricity leakage dropped down to 14.45 per cent in the first six months of the current fiscal year.

According to Nepal Electricity Authority (NEA), it has managed to reduce the electricity leakage of the system from 17.18 per cent in the last fiscal year by 2.73 percentage points in the first six months of the current fiscal year 2021-22 to 14.45 per cent.

It became possible through regular campaigning for power supply and control of technical and non-technical leakages, the sole power authority claimed, adding that the leakage has dropped to 14.45 per cent in the first six months of the current fiscal year, including power transmission and distribution. 

NEA also claimed that most of the leakage in the system is taking place during distribution. "The leakage during distribution in the first six months period is 9.23 per cent," the NEA claimed, adding that it has set a target of reducing electricity leakage to 15.5 per cent in the current fiscal year.

The drop in leakage has also helped increase profit of the NEA. According to NEA managing director Kulman Ghising, "NEA's profit has increased because of increase in revenue due to the reduction in leakage."

The leakage control campaign, according to him, has been carried out effectively, increasing the capacity of the substations, adding conductors, replacing overloaded transformers, and encouraging the use of three-phase meters.

The authority will take strict action against those who steal by bypassing and hooking up the meter, and those who resell the meters, replace the meter and tamper with the meter in order to control the non-technical leakage, he added.

Government appoints Hitendra Dev Shakya as NEA’s officiating managing director

 The government has appointed Hitendra Dev Shakya as the officiating managing director of Nepal Electricity Authority (NEA) today.

The Ministry of Energy, Water Resources and Irrigation decided to appoint Shakya as the Officiating managing director of the NEA as the managing director of the state power utility Kulman Ghising retired almost two months ago.

Shakya has been recalled to the NEA from its subsidiary NEA Engineering Company last week. He has assumed office today. Earlier, he was deputed to the NEA Engineering Company as its managing director.

The post of NEA’s managing director remains vacant for the last two months after Ghising’s four-year term as the executive head of NEA came to an end in mid-September. Despite public pressure to reappoint Ghising, for ending the hours-long power cuts, the government did not reappoint him. After Ghising, the government had appointed deputy executive director Lekhnath Koirala as the acting managing director of the NEA.

Shakya had also worked as a power sector specialist at the Office of the Millennium Challenge Compact-Nepal (MCC-Nepal).

NEA starts charging Dhalkebar substation

 Nepal Electricity Authority (NEA) has started charging Dhalkebar substation from today. The largest substation of the country is a part of Dhalkebar-Muzaffarpur cross border transmission line that is expected to facilitate the Nepal-India electricity trade.

The substation with electricity transmission capacity of around 1,200 megawatts (MW) is now able to import or export up to 850 MW of electricity. The substation can export the electricity generated by Upper Tamakoshi Hydropower Project.

Started in fiscal year 2017-18 with tender process, the 400 kV substation has three transformers and two of which will be charged after the Dashain festival. It took around two-and-a-half years for completion under the NEA’s engineering company supervision.

The government funded the country’s first gas-insulated station (GIS) was designed by NEA. According to the NEA, the substation will be connected to tower in Muzaffarpur from November 6 to November 10. Though, the construction was targeted to complete by the end of last fiscal year 2019-20, it took more time as the substation was could not be charged as the high-voltage testing machine was stuck at Kerung customs point – Nepal-China border customs – for three months due to the lockdown.

Although the Dhalkebar-Muzaffarpur cross-border transmission line was supposed to have been charged at 400 kV, it was initially operated at only 132 kV. Later in 2018-19 it was operated at 220 kV capacity and now it is fully operated at 400 kV charging capacity.

After the east-west transmission line is charged at 400 kV, the substation will be able to transmit 12,000 MW of energy, according to the NEA. 

Former managing director of NEA Kul Man Ghising confirming that his dream has come truw, said that the project has been though not completed his tenure, completion of the Dhalkebar substation is an important milestone for the hydropower sector of the county.

Local bodies to issue licence for hydel projects below 3MW

The Electricity Act 2076 Bill has proposed delegating the authority to issue licence for the construction and operation of electricity projects up to the capacity of 3 megawatt (MW) to the local governments.
At a meeting on the draft of the Electricity Act 2076 Bill in Kathmandu today, joint secretary of the Ministry of Energy, Water Resources and Irrigation Toyanath Adhikari confirmed that the Bill has proposed to give local level governments the authority to issue license to electricity generating project up to 3 MW. “ If the project lies in two or more than two local level territories, the project has to get the license from the provincial government,” he said, quoting the draft. “An electricity project with generation capacity of 3MW to 20MW should get license from provincial government, whereas if the project falls in more than one province, the project would need to be licensed from the central government's secretary."
According to the draft, a project gets the license for electricity generation within 15 days after operator submits needed documents. Likewise, the license for electricity transmission or distribution will be issued within 120 days and for electricity trade or customer service license, it will take 45 days, the draft reads, adding that it has also reduced the term of license to be issued for generation of hydroelectricity to 40 years, which is 10 years less than the one mentioned in Electricity Act 2049. “The licensee generating electricity from sources other than hydro can operate the project for 25 years,” the draft reads, adding that the term of license to be issued for generations, transmission or distribution of electricity may be of 50 years in maximum.
Speaking on the occasion, Minister for Energy, Water Resources and Irrigation Barshaman Pun said that the government will not ignore provincial and local level governments, and stakeholders while getting the 'Electricity Act 2076' Bill endorsed in the parliament.

Electricity demand surges to record 1,338 MW

Though the government is planning to promote use of electric vehicles as well as electric stoves for cooking to increase consumption of electricity, Nepal Electricity Authority (NEA) has started facing a problem in its distribution system due to increasing power consumption.
Of late consumers have started facing frequent power cuts also due to high demand, confirmed state power utility. “The distribution system is overloaded and feeders are tripping due to record high demand of 1,338 megawatts (MW) because of increasing cold weather, especially in Kathmandu valley, and subsequently due to the increase in the use of electrical appliances like air-conditioners and electric heaters,” the NEA informed, adding that transformers, especially, in Kathmandu valley are facing problems of overload and distribution cables are catching fire, though the NEA is managing supply by repairing the problematic feeders and distribution lines.
According to managing director of NEA Kul Man Ghising, most of the transformers, feeders and cables are overloaded at present due to increasing demand. But he assured that they are trying to address the issue of electricity tripping by upgrading and replacing the local distribution system.
The authority but claims that it has already replaced all the transformers in the Valley to ease the situation but the electricity tripping – commonly referred as power fluctuations – has equally affected the household consumers, industries and other businesses. “The power utility has also given top priority to augment the transmission and distribution system and is installing double-circuit high-capacity transmission network to enhance the quality of power supply,” Ghising said, adding that the NEA has already replaced almost 7,000 transformers in the last fiscal and 1,041 in the first four months of this fiscal year. “The process to replace over 6,000 transformers across the country is ongoing, which will increase the capacity of the distribution system by 20 per cent.”
NEA is upgrading 100 substations across the country, particularly in the major load centres and other major problematic areas. “The authority will also upgrade the transmission and distribution system to handle additional 1,000 MW of power next year, he added. “The NEA will have to upgrade the transmission lines as some 5,000 MW of electricity will be connected to the national grid by 2024, and NEA needs to install 15,000 new transformers by then.”
Kathmandu Valley’s demand has increased to above 400 MW at present from 250 MW to 325 MW in normal times peak demand. Likewise, the country’s peak demand stands at 1,338 MW currently but NEA has been generating 508 MW and independent power producers are generating 332 MW, whereas import from India stands at 498 MW. “But Nepal has also been exporting 40 MW to Bihar in India.”

Nepal-India energy JSC meeting to finalise New Butwal-Gorakhpur cross-border transmission line project

The two-day Nepal-India energy secretary-level talks began in the southern Indian city of Bangalore in India today.
Energy secretary Dinesh Kumar Ghimire is leading the Nepali team at the meeting that aims at finalising details related to the much talked about transmission line and energy banking projects through mutual understanding, whereas his counterpart Subhash Chandra Garg is leading the Indian team.
“The meeting will focus on finalising the construction modality of the 400 kVA New Butwal-Gorakhpur cross-border transmission line, the Energy Ministry informed, adding that it will also give the final touches to the bilateral energy banking agreement.
The New Butwal-Gorakhpur cross-border transmission line project is a must to implement the US government’s Millennium Challenge Corporation (MCC) assistance to Nepal. 
The secretary-level talks – known as Joint Steering Committee (JSC) meeting – will tomorrow discuss the overall agenda. Prior to the JSC meeting, the joint secretary-level Joint Working Group (JWG) meeting today will finalise the agendas for the JSC meeting.
Nepali delegation is hopeful that the construction modality of the New Butwal-Gorakhpur cross-border transmission line project will be finalised in the meeting as the government authorities from both the sides have spent a lot of time preparing the groundwork for the agreement.
There has been agreement to construct the transmission line on government-to-government modality and the detailed project report has also already been finalised during the last meeting. The cross-border transmission line project has been under discussion for a long time and it was also also discussed during the last JSC meeting in Pokhara on January 23, too. Nepal and India – during the Pokhara meeting – had also agreed to sell more electricity to Nepal. Likewise, at the Pokhara meeting, both the governments had agreed to build the respective length of the transmission line that falls in their territory.
Of the total 140-km-long transmission line, some 20 km falls in Nepali territory, whereas remaining 120-km lies in the Indian territory. Nepal had pledged to invest 50 per cent of equity in the Indian side of the transmission line. At that meeting, Nepal had also agreed to pay cent per cent wheeling charge for seven years from the beginning of the transmission line operation.
Nepal has proposed that both countries must pay according to the quantum of energy – after seven years of operation – used through this transmission line. But India has refused the proposal.
However, during the two-day Infrastructure Summit on September 11 and 12 held in Kathmandu, Indian Minister of State for Power RK Singh had pledged to support the usage proposal of the transmission line and its construction modality with the energy minister Barsha Man Pun.
During the last meeting in January in Pokhara, Nepal and India had discussed opening a joint company to implement the project and India will provide interest-free loan to fund the construction works, though any agreement has not been reached.

HIDCL, Power China to build 762-MW Tamor hydropower project

The government has awarded the 762-megawatt (MW) Tamor hydropower project to a joint venture between a Nepali and Chinese firm.
Hydroelectricity Investment and Development Company Ltd (HIDCL) of Nepal and state-owned Power China Corporation (PCC) will construct the reservoir project on government-to-government (G2G) basis, according to a press note issued by the Ministry of Energy, Water Resources and Irrigation (MoEWRI).
Construction of the Tamor project – that will cover Panchthar, Taplejung, Terhathum and Sankhuwasabha districts – is expected to start from next fiscal and be completed by 2025, it reads, adding that the Investment Board Nepal (IBN) and Ministry of Energy, Water Resources and Irrigation (MoEWRI) – during Chinese President Xi Jinping’s two-day state visit to Nepal – awarded the contract to HIDCL-Power China to build the project under the public-private-partnership (PPP) model.
After receiving the letter from the board, Power China signed a memorandum of understanding (MoU) on project implementation agreement with HIDCL. The chief executive officer of HIDCL Chhabi Raj Pokharel and vice chairman of Power China Pan Deng Yu today signed the MoU on behalf of their respective organisations.
According to minister for Energy, Water Resources and Irrigation Barsha Man Pun, the government has also signed an agreement with Power China to build the 156-MW Madi multipurpose hydropower project – located in Rolpa district – that is estimated to cost around $39 million, according to an initial study.
The HIDCL and Power China had jointly submitted a project development proposal at the investment board to build both the projects with a share structure of 46:54 per cent, with the Nepali firm investing 46 per cent and Power China investing 54 per cent of the project cost, for the Tamor hydel project. “Likewise, in Madi multipurpose hydropower project, HIDCL will manage 26 per cent and Power China will manage 74 per cent of the total investment.”
On August 1, the board meeting chaired by Prime Minister KP Sharma Oli had shortlisted three companies including Power China, Nebras Power Holding of Qatar and Fuji Electric Company Ltd of Japan and sought proposals from them. However, only HIDCL-Power China submitted a proposal – jointly with Nepali firm – to develop the Tamor reservoir project till the final date on September 15.
Earlier, the board had formed a committee – led by minister Pun – to conduct necessary assessment of the proposal. After studying details of the project, the HIDCL-Power China’s proposal was forwarded to the board, which is finalised today.
The government will acquire necessary land and provide it to the developer, according to the board. “The government will also provide project security,” it informed, adding that the board will also facilitate in legal approvals, permits, review and monitoring of the project. “But, the developer will plan, design, build, finance and operate the facilities during the concession period of 30 years.”
Likewise, the project developer will also be responsible for collecting revenue from the project during the concession period. After the concession period is over, the developer will have to hand over the project to the government.
According to an earlier study, the construction cost of the Tamor hydel project has been estimated at $1.21 billion, including interest during construction, finance cost and the 75-km-long 400 kVA double-circuit transmission line from the project site to Inaruwa in Sunsari district.
According to the Nepal Electricity Authority (NEA) study, if the project builds a dam that is 205 metres high then it will generate 762-MW of electricity. But, if the height of the dam is increased to 300 metres the project can generate 2,565-MW of electricity.
The government had also showcased Tamor at the second Investment Summit held on March 29 and 30.

Nepal signs programme implementation agreement with MCC

Nepal has signed a programme implementation agreement with the Millennium Challenge Corporation (MCC) representing the US Government, taking the implementation of the $500 million MCC Compact a step forward. The signing of the agreement comes in the wake of criticisms from some leaders of the ruling party over a plan to ratify the compact agreement in the parliament.
According to the Millennium Challenge Account Nepal (MCA-Nepal), finance minister Dr Yuba Raj Khatiwada and vice president of the Department of Compact Operations, MCC Anthony Welcher signed the agreement amid a ceremony at the Finance Ministry today.
The signing ceremony witnessed finance secretary Dr Rajan Khanal, joint secretary and head of International Economic Cooperation Coordination Division (IECCD) Shreekrishna Nepal, executive director at the Millennium Challenge Account-Nepal (MCA-Nepal) Khadga Bahadur Bisht and other MCC and MCA-Nepal representatives,
Under the compact programme, the US is providing Nepal the highest amount of grant, which will be spent for the implementation of Electricity Transmission Project (ETP) and Road Maintenance Project (RMP).
The programme implementation agreement is an important step toward implementing the Compact as it further specifies the terms for implementing the compact and its activities in Nepal including details of the implementation arrangements, fiscal accountability and disbursement and use of MCC funding, among other matters, according to the MCA-Nepal that is the entity established by the government to implement the MCC Compact programmes.
With its signing, Nepal has met one of the key conditions precedent to the June 30, 2020 entry into force (EiF) date after which the five-year clock to implementation of the Compact will start. The EiF date is crucial as the projects financed under the MCC compact must be completed within five years, according to the MCA-Nepal. “Other key conditions were the declaration of the ETP as a national pride project, passage of legislation related to the Electricity Regulatory Commission and formation of the commission and ratification of the compact agreement from the parliament.”
The condition for the ratification of the compact agreement from the parliament has drawn criticisms from some leaders and members from the ruling party Nepal Communist Party (NCP), raising concerns over the fate of the largest grant from the US.
Under the compact, the MCC will provide $500 million in grant while the government will chip in $130 million for the implementation of Electricity Transmission Project (ETP) and Road Maintenance Project (RMP). Altogether 318-km transmission lines of 400kV and three large-capacity substations will be built under the ETP, while the RMP is focused primarily on the maintenance of 300 km of strategic roads.
In September 2017, the US Government’s Millennium Challenge Corporation (MCC) signed the compact with Nepal. The compact aims to increase the availability and reliability of electricity, improve the quality of the roads network and facilitate power trade between Nepal and India, helping to spur investments and accelerate economic growth that will benefit all Nepalis, according to the MCC.

Government registers $500 million MCC-agreement signed with US in parliament

The government today registered a $500-million grant agreement signed between Nepal and the US in the parliament for ratification.
The $500-million grant – a part of the $630-million ‘compact programme’ – is designed by the Millennium Challenge Corporation (MCC), an independent foreign aid agency of the US government, for Nepal. The interest free grant will be used to build energy and transport network in Nepal, paving the way for the country to attract more domestic and foreign investment, foster economic growth and reduce poverty, according to the MCC-Nepal.
The agreement registered in the parliament secretariat today states that the MCC will provide a grant of $459.5 million as ‘programme funding’ and another grant of $40.5 million as ‘compact CDF’. The government has committed to contributing $130 million to the programme.
The US government’s grant will be used to support two projects – the Electricity Transmission Project and the Road Maintenance Project – as lack of energy and transport infrastructure has been identified as two major binding constraints for rapid economic growth of the country.
On September 14, 2017, finance minister Gyanendra Bahadur Karki and acting MCC chief executive Jonathan Nash signed the agreement in Washington, DC. According to the agreement, the agreement must be ratified by the Federal Parliament before it comes into effect.
The MCC board of directors had selected Nepal for its compact programme in December 2014. Nepal was selected for the MCC programme ‘in recognition of the country’s efforts to establish rule of law and democratic institutions, and its strong performance on MCC’s policy scorecard’.

India relaxes cross-border power trading guidelines

India has relaxed the cross border power trading guidelines by giving recognition to the tripartite arrangement in cross-border trading of electricity. The 'Guidelines on Cross Border Trade Import/Export of Electricity' has also paved the way for Nepal to export surplus electricity to Bangladesh via Indian transmission lines.
The Indian Power Ministry – introducing the new guideline – has removed the discriminatory provision included in the older one, under which Nepali-based hydropower projects, which are owned by the Indian government or have a majority (51 per cent) Indian share were only allowed to export power to India.
The new guideline has, however, included a provision under which two countries having a bilateral agreement with the Indian government can trade electricity between them through Indian power lines after entering into agreement with the Indian government owned-Central Transmission Utility.
"Provided that in case of tripartite agreements, the cross border trade of electricity across India shall be allowed under the overall framework of bilateral agreements signed between the Government of India and the Government of respective neighbouring countries of the participating entities," the guideline reads.
"Where tripartite agreement is signed for transaction across India, the participating entities shall sign a transmission agreement with the Central Transmission Utility of India to obtain transmission corridor access," it further reads, adding that it will foster power trade between Nepal and Bangladesh.
While issuing guidelines on cross-border electricity trade for the first time in 2017, the Indian Power Ministry had neglected a possibility of trilateral arrangement among Nepal, India and Bangladesh. But the new guidelines – issued after withdrawing the old one issued in 2017 – provide an opportunity to its neighbouring countries, including Bangladesh and Nepal to trade electricity between them through Indian territory.
The latest guidelines – that is more progressive and has opened plenty of avenues for the development of hydropower sector in Nepal – also follows the spirit of the Power Trade Agreement (PTA) signed between Nepal and India in 2014, which requires both countries to allow non-discriminatory access to cross-border electricity market.
The older guideline was discouraging to foreign investors and private Nepali power developers planning to construct export-oriented hydropower projects.

World Bank approves first energy sector credit in Nepal

The World Bank has approved its first loan to strengthen the finances and operations of Nepal’s energy sector, so it can deliver reliable, affordable and sustainable power to the Nepalis.
The $100 million Nepal Energy Sector Development Policy Credit (DPC) aims at implementing key policy, regulatory and institutional measures. These include improving the financial viability of the Nepal Electricity Authority (NEA) as the sole off-taker; establishing a regulatory framework that is transparent, autonomous, and accountable; encouraging electricity trade; and restructuring NEA to make it easier for the private sector to compete in the energy sector.
"The proposed credit aims at supporting the restructuring and market reform of the electricity sector to improve governance and performance of electricity institutions, eventually enhancing quality and efficiency in services,” said World Bank Country Manager for Nepal Faris Hadad-Zervos. "Our goal is to seek integration into the regional electricity market and create a competitive wholesale market.”
Despite Nepal’s large hydro generation potential, electricity constitutes of less than 5 per cent of energy consumption. While 95 per cent of the population is estimated to have access to grade and off-grid electricity, the per capita electricity consumption of 177 kWh per year is a twentieth of the global average, and a fifth of the per capita electricity consumption in South Asia.
Nepal also relies increasingly on electricity imports to reduce the electricity shortage in the country, while large export-oriented hydropower projects are yet to materialise in spite of huge opportunities. The credit aims at implementing policy and institutional measures to overcome these challenges and help bring about structural reforms in the energy sector, to ensure affordable electricity services and encourage predictability for sustainable investment.   
“The development policy credit is linked to the government’s key sector goals of expanding access to electricity to one hundred percent of the population,” said senior energy specialist at the World Bank and Co-Task Team Leader of the Project Xiaoping Wang. "In the long term, the implementation of the credit will also support key institutional and policy actions necessary for the removal of binding constraints to private investment in the sector."