‘Govt is readying ground for country’s regional power trade’

The Ministry of Energy, Water Resources and Irrigation recently unveiled a white paper on the energy sector reflecting the status of the sector and plans of the government to boost electricity production in the country. Prioritising the ambitious plan of the government to produce 15,000 megawatts of electricity in the next one decade, the white paper presents a prosperous energy sector for the country in the years ahead. Sujan Dhungana and Umesh Poudel of The Himalayan Times caught up with Barsha Man Pun, minister for energy, water resources and irrigation to know about government’s energy sector-related plans ahead. Excerpts:

The government recently unveiled a ‘white paper’ on Nepal’s energy sector that has vowed to start groundwork to generate 15,000 megawatts of electricity in the next one decade. What progress has been made on that front?

The white paper basically reflects the future concepts and plans of the government in the energy sector. With the end of the political transition, it is time now for us to take the country towards the path of development and prosperity in the next one decade. In a bid to achieve the prosperity target of Nepal, energy and agriculture sectors will have leading roles to play. In fact, these two sectors will be the driving force of the entire development process of Nepal in the days ahead. As the country’s target is to achieve double-digit economic growth within the next one decade, I believe that the domestic market will itself consume almost 10,000 megawatts of electricity once our economy becomes vibrant. Thus, Nepal itself will be a market for a majority of the electricity produced here. The white paper is based on this strategy and projection. In the first phase, we are targeting to generate 3,000 megawatts of electricity within 2021 and all our projects are moving ahead accordingly. I am committed to facilitating all the hydropower projects run by both the government and private sector and ensuring that such projects are completed within the given deadline. Similarly, the government will ensure that all the required infrastructure, including construction of transmission lines for these projects will be completed on time. Likewise, the government will issue generation licences, survey licences and sign Power Purchase Agreement (PPA) of different hydropower projects in the near future with a view to achieving the national target of generating 15,000 megawatts of electricity in the next one decade. The government will also work on developing national and regional markets targeting the consumption of domestically produced electricity.

The government’s plan to form an Electricity Regulatory Commission to regulate the generation and transmission of electricity has not been formed yet. What is hindering the government from establishing the ERC?

Along with the government, a number of private firms are operating hydropower projects after taking licence from the government. In the future, the number of hydropower projects run by both the government and private sector is bound to increase as per our electricity goal. As Nepal will have a huge amount of electricity added to the national grid in the coming years, the energy sector requires proper management. Thus, it is essential that we form an independent regulatory body, Electricity Regulatory Commission (ERC), to look after issues related to licensing, electricity generation, distribution and marketing. The government has already endorsed the Electricity Regulatory Act, which envisions the formation of ERC. The government will soon form a ‘search committee’, which will recommend the government on the structure and officials at ERC. The formation of ERC was delayed in the past as the government is busy in implementing federalism — defining administrative roles of different layers of government and development activities. I assure that the ERC will get a complete shape soon.

Plans were afoot to review the cross-border Power Trade Agreement with India, especially to address the restrictive power trade provisions in Indian laws. What has been the progress so far?

Nepal has access to market for electricity in the SAARC region and different policies and agreements have guaranteed our access. However, the Indian government last year drafted a regulation that states that only those companies fully owned by the governments of the concerned countries and having 51 per cent equity investment of Indian public or private companies can export power to the Indian market. The Nepali government has already questioned this provision in the Indian law and the issue was raised during the recent visit of Prime Minister KP Sharma Oli to the southern neighbour. Moreover, the Indian authorities have assured us about holding further discussions on Nepal’s concern on the concerned provision in the regulation. We are optimistic that Nepal’s surplus electricity will get easy access to the Indian market. Nepal has also formulated the concept of energy banking with regard to Nepal-India electricity trade and the Indian government has sought a concept paper on it from the Nepali government. The energy banking concept intends to have a policy for exchange of electricity between the two countries as per supply-demand conditions during dry and wet seasons. However, all these things are possible only if we have effective electricity transmission lines. Though the 400-kV Dhalkebar-Muzaffarpur cross-border transmission is currently operating under limited capacity, the government will start full-fledged operation of the transmission line soon. Similarly, the detailed project report (DPR) of the second cross-border transmission line — Butwal-Gorakhpur — has already been approved. Similarly, construction of Kohalpur-Lucknow cross-border transmission line is in the government’s plan. Thus, the government will not only focus on implementing different cross-border electricity pacts and policies, but will also assure gateways for electricity trade with different countries by developing cross-border electricity transmission lines. In a bid to start electricity trade with China, the construction of Galchi-Rasuwagadhi-Kyirung transmission will be one of the major agendas during Prime Minister Oli’s upcoming visit to China. Similarly, the government plans to sign Power Trade Agreements with China and Bangladesh in the near future. Currently, the government is readying necessary ground for the country’s regional power trade. It is essential that regional power trade agreements are signed and implemented effectively along with increased generation of electricity in the country.

Under your leadership, the MoEWRI is preparing to introduce the Integrated Water Management Policy. What issues will this policy address?

As Nepal is rich in water resources, its effective utilisation is necessary. In a bid to ensure effective use of available water resources, a separate policy is necessary. We have already prepared the draft of Integrated Water Management Policy and circulated it among stakeholders for further discussions and feedback. The policy will basically address issues on sustainable use of available water resources in the country and ensure water for all purposes — drinking, hydel projects and irrigation, among others. It will focus on the wise use of underground water, land water and rainfall in the country.

As construction of different reservoir projects has been delayed, Nepal is obliged to purchase electricity from India in the dry season as our hydel projects are run-of-the-river types. How do you plan to expedite construction of planned big hydel projects?

It is only through the development of big hydropower projects and electricity storage facility that we can maintain the supply-demand chain of electricity in the future. As a majority of the works of the 456-megawatt Upper Tamakoshi Hydropower Project has been completed, the government plans to operate the project within the next fiscal year. However, it is true that the construction of 450-megawatt West Seti Hydropower Project has been delayed. A Chinese company has signed a joint-venture agreement with Nepal Electricity Authority to construct the project. However, even if the Chinese company does not undertake the project in the future, the government will construct the West-Seti hydel project through its own resources. Similarly, the construction of Sunkoshi Hydropower Project and Arun-III project will also be expedited to ensure that Nepal is self-sustained in electricity within the next few years.

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