Experts for involvement of private sector in hydropower generation

March 27, 2006
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At a time when the employees of the Nepal Electricity Authority (NEA) have been rallying against the government’s plan to disintegrate the authority and start its privatisation process, experts have also stressed that involvement of private sector in hydropower sector would be helpful in meeting the increasing demand of power.

Addressing an interaction programme organised by Research and Media Centre against Corruption (ReMAC) in the capital on Monday, Dr Bholanath Chalise, said competition among the private producers would increase the generation of more electricity at cheaper cost and help reduce the present rate of load shedding.

The increasing rate of electricity consumption cannot not be met unless the NEA involves private sector for power production and take immediate initiation to build new plants, he said. Present increment rate of consumption, which is around 8 percent, would reach 10 percent by 2008, Chalise predicted.

He blamed that the ongoing daily load shedding was the result of the government’s failure to start newer plants soon after the completion of one.

Director of Butwal Power Company, Gyanendra Pradhan, said over-ambitious projects of NEA investing more money than projected and delays in completion are the major causes of load shedding. The NEA, according to him, should allow the national private companies to set up smaller plants so that the problem of load shedding in rural areas could be minimised while the NEA could divert the power from big plants to towns and industrial cities.

“The NEA should focus more on fulfilling the demands in major cities and building big plants while leaving the private sector to invest in smaller plants,” he maintained.

Chairman of Chilime Hydro Power Limited, Dambar Nepali, stressed that the government should prioritize the investment from national companies in the hydropower sector that can produce electricity at least up to 60MW electricity. He also criticized the government’s decision to withhold licenses of 22 national power companies that would have already built plants had they been granted permission.

He also urged the NEA to repair the national transmission grid so that the power produced by the private hydro power plants could reach consumers easily. “For years the NEA has not repaired the national grid that has been a major cause of electricity leakage,” he pointed out.

Executive Director of Arun Valley Hydropower Development Company Limited, Guru Prasad Neupane, said one of the causes of load shedding was the NEA’s failure to operate its existing plants at their fullest capacity. He said that six projected plants in Koshi zone have not been able to start construction due to government’s delay in giving license to them. “These plants could prove to be relief to the people of that region,” he said.

Speaking at the program, executive chairman of Gautam Buddha Hydropower Limited, Hari Bairagi Dahal, said that the problem of power shortage would not be solved unless the government realises the seriousness of the problem. “The state has not recognised load shedding as an issue,” he said.

The current demand of electricity stands around 600 MW while existing power plants hardly generate more than 553 MW when they are running in full capacity. This has resulted in a daily load shedding of 5 hours. The NEA has said there are no obvious alternatives to this problem before the start of monsoon.