IPPAN condemns hydro licensing directives

Kathmandu, November 13

Private hydropower developers in the country have condemned a few provisions in the ‘Directives on Licensing of Energy Projects – 2018′ that was recently issued by the government.

The Ministry of Energy, Water Resources and Irrigation (MoEWRI) had amended and issued the directives to hydropower developers including the need for hydropower projects to be designed on the basis of Q45 (flow exceedence), on October 24.

“The change in the construction design from Q40 to Q45 will directly affect the early energy production of hydro projects,” said Shailendra Guragain, president of Independent Power Producers’ Association, Nepal (IPPAN).

According to Guragain, if hydropower projects are constructed under Q45 design then the projects will not be able to utilise resources in an optimum manner and the energy cost will increase.

“The government did not consult with the private sector while preparing the guidelines and we strongly appeal to the concerned authorities to amend the aforementioned directives for the betterment of Nepal’s hydro energy sector,” he added.

The new provision is applicable for all projects that supply electricity to the central grid, according to the amended directives. However, this provision excludes the projects intended for rural electrification (not to be connected to the central grid).

This recent step taken by the government will discourage investment in high-capacity projects, as per independent power developers.

“As the power plants need to be operated for a long period in rated capacity, the developer would have to lower the capacity of the plant to ensure full capacity operation for a longer period from the available water resources,” Guragain stated.

Earlier, directives had allowed projects to be designed on the basis of Q40, which meant that projects needed to be operated at full installed capacity. As per experts, Q40 is the most feasible design for run-of-the-river (RoR) projects.

The RoR projects designed on the basis of Q40 have been easily operating their plants for around five months as the water level rises in the rivers during the wet season. However, as they have to operate the plants for a longer period under Q45, the capacity of projects would need to be lowered eyeing the hydrological capacity of such projects during dry season.

Speaking at a press conference today in the Capital, IPPAN Vice President Kumar Pandey, accused government of bypassing private sector and focusing more on importing power from India instead of promoting domestic investors.

Projects developed under Q40 design operate their plants in full capacity during wet season to meet the requirement because water discharge level goes down in snow-fed rivers in the dry season.