1. Dr. Murali Gopal Ranjitkar Mr. saroj Upadhaya
Hydropower Development in Nepal : Major issues, Environment consideration and way forwards
Dr. Murali Gopal Ranjitkar
Mr. saroj Upadhaya

2. Outline of the presentation
History and current status of hydropower development in Nepal
Consequences of failure to develop hydropower
Issues in hydropower development in Nepal
Environmental consideration in hydropower projects
Ways forward for hydropower development

3. Water Resources in Nepal
Claims of Nepal as "second richest country" in the world after Brazil in hydropower potential has never been validated
Students and general public have been inundated with the 83,000 MW potential rhetoric- based on a PhD of Dr. Hari Man Shrestha
However, another more scientific study lead by Prof. Narendra Man Shakya has shown that Nepal has a total potential to generate 53,000 megawatts of hydropower
Another study revels 43,000 MW of economically and technically feasible hydroelectricity (NPC, 1985)
Despite these discrepancies, the general consensus is that hydropower has the potential for uplifting the lives of the Nepalese people

4. History of Hydropower Development in Nepal
Pharping Hydropower Plant is one of the oldest hydropower plants of Asia and the first hydropower plant of Nepal.
Established in the year 1911 while the first hydropower plant in China was established in 1912.
Ironically, we have lagged behind in hydropower generation ever since and have faced seemingly perpetual load shedding hours in the recent years
This is despite the fact that Nepal is among the richest country in the world in terms of water resources.

5. Status of Hydropower Development in Nepal (1)
Presently, the total installed capacity of Nepal’s power plants is MW including two thermal plants which produce MW (NEA, 2016).
Except 92 MW Kulekhani reservoir project, all of the hydropower projects in Nepal are of run-of-river (ROR) type
Huge power generation difference between rainy and dry season
Shortage of 467 MW during the dry season which results in 14 hours’ of load- shedding everyday

6. Status of Hydropower Development in Nepal (1)
Nepal lag well behind other South Asian compatriots.
***Bergner, M. (2013). Developing Nepal’s hydroelectric resources: Policy alternatives. University of Virginia

7. Status of Hydropower Development in Nepal (2)
3 distinct stages of Hydropower development in Nepal
Donor assisted till 1995
Independent Power Producers (IPPs) oriented till
Open and Liberal policy since than

8. Status of Hydropower Development in Nepal (3)
First Five-Year Plan ( )
Electricity development highly prioritized
Main objective was to generate 20 MW of electricity
In 1962, Nepal Electricity Corporation (NEC) was established and in it was restructured to Nepal Electricity Authority (NEA)

9. Status of Hydropower Development in Nepal (3)
Nepal embarked on a market led liberalized economy after the restoration of democracy in 1990.
Since then a number of hydropower development policies have been formulated.
Eighth Five Year Plan ( )
First plan by the democratic government formed after JanaAndolan of 1990.
Hydropower Development Policy 1992, Water Resources Act 1992, Electricity Act and Foreign Investment and One Window Policy 1992 were formulated to attract foreign as well as domestic investment from private sectors

10. Status of Hydropower Development in Nepal (4)
Tenth Five Year Plan Period ( )
Laid emphasis on construction of small, medium, large and reservoir type hydropower projects
To promote integrated development of water resources involving private and public sector with emphasis on rural electrification and control of unauthorized leakage of electricity

11. Status of Hydropower Development in Nepal (5)
Ten Years Hydro Development Plans
10,000 MW in 10 Years
Reserving small hydropower projects up to 50 MW for domestic investors
Building cost effective projects under Public-Private Partnership (PPP)
Twenty Years Hydro Development Plans
25,000 MW in 25 Years and projects divided into 5, 10, 15 and 20 years time frames
Domestic consumption and export oriented
Also emphasized Public-Private Partnership (PPP)

12. Costs and Concerns Arising from Insufficient Electricity Supply
Environment and Health Impacts
Deforestation and indoor air pollution
Economic Impacts
Cost of importing petroleum products
Implications for development
Missing out on revenue generation
Equity
Access to electricity, national grid among rural population

13. Issues in hydropower Development in Nepal
Political constraints including the state reconstruction
Technical constraints
Financial constraints
Policy constraints
Climate change

14. Issues in hydropower Development in Nepal
1. Political constraints
Lack of Political Will
Persistent political instability
Aspiration of local people
State Reconstruction
Case study from Cauvery River dispute in India

15. Issues in hydropower Development in Nepal
Cauvery River dispute in India
The Cauvery originates in Karnataka and flows through Tamil Nadu before joining the Bay of Bengal.
Both parties argued that they need the water for millions of farmers in the region.
Conflict has persisted for decades now often marred by violent protests.
Natural Resources and Revenue Sharing in the New Federal System of Nepal must be thoroughly studied to avoid these kinds of situations

16. Issues in hydropower Development in Nepal (2)
2. Technical Constraints
Technical constrains for the development of hydropower related to geological, hydrological and topographical settings of the country.
Also, lack of manpower specialized in hydropower development and lack of long term hydrological and sediment logical data are other technical constraints
Lack of adequate transmission lines and insufficient capacity of existing and planned cross-border transmission lines
Absence of Storage-type Projects

17. Issues in hydropower Development in Nepal
3. Financial Constraints
Hydropower projects are more capital intensive
Nepal doesn’t have the necessary financial resources to develop the hydropower in its own and have to be reliant upon investment form international financial institution and donor agencies
Pricing Issue of electricity
4. Policy Constraints
Issue of License and institutional constraints
Monopoly of NEA over transmission and distribution of power
Overlapping responsibilities among governmental ministries and departments
Inconsistency among various hydropower policies

18. Issues in hydropower Development in Nepal (3)
5. Climate Change
Water resources and hydropower ranks among the most vulnerable resources
Agrawala, et. al., 2003

19. Issues in hydropower Development in Nepal (3)
5. Climate Change (Cont……)
With only 1-2% of its potential currently developed, it will be quite some time before the opportunities to expand hydropower energy are constrained by climate change in Nepal.
This does not mean that the existing facilities might not be seriously affected by Climate change. The ways in which climate change can affect hydropower resources include:
Run off variability
Glacial retreat
Glacial Lake Outburst Flood (GLOF)
Sediment load and Evaporation losses
Financial constraints and disincentives

20. Future for hydropower Development in Nepal
Alternatives
Transmission lines
Storage Type Projects
Policy

21. alternatives for increasing hydroelectric capacity
Letting present trends continue
Developing micro-hydropower projects (100 MW)
Expand capacity using mid-range dams (1-100 MW)
Pursuing large-scale hydroelectric projects (>100 MW)
Pursue micro-hydropower projects as the current political and regulatory environment in Nepal is not conducive to medium and large-scale project development***.
The economic, social and environmental benefits of pursuing micro-hydropower is immense but ultimately large projects especially storage type projects should be pursued to fully capture Nepal’s vast hydroelectric potential.
***Bergner, M. (2013). Developing Nepal’s hydroelectric resources: Policy alternatives. University of Virginia

22. Storage Type Projects
Except 92 MW Kulekhani reservoir project, all of the hydropower projects in Nepal are of run-of-river (ROR) type
Total electricity generation during dry season drops drastically resulting in nearly 14 hours of load-shedding everyday
Storage type hydroelectric projects are must for Nepal
Increases the reliability of the electricity supply as ROR (Run-off-river) projects are subjected to variability in river flows
Multipurpose: irrigation, water supply
Water available for generations even during times of drought
Though need more investment and have socio-economic impacts

23. Transmission lines
Inadequate transmission lines and its insufficient capacity
Short term: Important to curb the current load shedding rate by importing electricity from India during dry season
Long term: New cross-border transmission lines for commercial viability of mega projects and power sale to India
Many projects in limbo due to lack of transmission lines
Impractical environmental and forest guidelines also hindering construction of transmission lines

24. Policy Public Private Partnership best suited for Nepal
Lack of business environment for FDI (Foreign Direct Investment)
Government and private sector alone cannot undertake huge projects
Chilime Hydropower Project
Model project of Public-Private Partnership in hydropower development in Nepal

25. Policy (cont..)
Chilime Hydropower Company Limited (CHPCL), a subsidiary company of NEA.
The majority of shares, i.e. 51% belong to the NEA, 14% has been distributed to the general public, 10% to the locals of the project region and the remaining 25% is owned by the staffs of the company
Located in Rasuwa district with installed capacity of 22.1 MW.
First project to mobilize local capital, local skill and local labor for electricity generation
Best suited for the country as it shares risks as well as profit between private and public sector
General and local people can also become partners

26. Environment Considerations
Legal Requirement and environmental screening
Areas requiring Environment Impact Assessment(EIA)
Environment Impact assessment study
Screening
Environmental scoping
Preparation of terms of reference
Environmental monitoring
Environmental auditing
Preparation of EIA report

27. Conclusion and recommendation
In depth study becomes very essential to identify the real potential of hydro power projects in Nepal
Need to develop hydo power projects according to plan program
Nepals internal financial resources need to be attract in Hydro power sector
Major issues need to be address in time
Environment consideration need to be strongly applied in all aspects
Effective management team need to be develop for hydro power development projects.
Public private Partnership modules need to be strongly applied in medium scale hydro power projects.