Challenges Ahead: Incoming Loadshedding

By AB THAPA

Few days back the Nepal Electricity Authority (NEA) had announced that in near future soon after the monsoon it will have to start again the load shedding. For many of us closely following the activities related to Nepal ’s water resources development in general and the hydropower generation expansion in particular the news of the load shedding has not come as a surprise. Everybody knew that the NEA would be forced in very near future to resort to load shedding. It was clearly explained in an article published in the SPOTLIGHT on January 13, 2006 . why the NEA is facing power shortage problems in recent years

“The IPP owned hydropower plants are not going to be helpful to the NEA in future also to mitigate crisis of power shortage when the demand for electricity further increases. The total present firm capacity of all the IPP owned hydropower stations might be only about 60 MW during the critical dry season months when the demand for electricity is the highest despite the fact that the present total installed capacity of the IPP owned hydropower stations is about 140 MW. As a result, the real total generating capacity in the system would be only about 505 MW( excluding procurement from India) which is less than the maximum peak demand recorded at 515 MW last year. Thus in the coming winter season load shedding would be inevitable if electricity is not imported from India”.

A Rational Plan

It is certain that the demand for electricity in Nepal would be rapidly growing in future also. This trend is perhaps primarily due to shifting of the population from the rural to urban areas. Thus there is a need for launching a sound electricity generation expansion plan. It is feared that we might go terribly wrong if we failed to correct in time our wrong perception that the hydropower can be planned and implemented without giving due regard to technical and economic matters.

Most of the foreign donors and development banks had helped Nepal to implement hydropower projects applying sound engineering practices. They have conducted on our behalf thorough studies of the mega projects like the Karnali High Dam Project as well as medium sized hydropower projects. Unfortunately we have not even cared to study carefully the reports of those very important projects. As a result, we are, in fact, misleading the country by pushing ahead to implement hydropower projects completely disregarding the basic power engineering principles.

Using Common Sense

Everybody knows perfectly well that at present the actual generation capacity of our hydropower plants is greatly reduced during the winter seasons when the demand for electricity is the highest. It is quite clear that we are already experiencing a capacity deficit though we might still be running into a significant energy surpluses. It indeed is a serious drawback. Concerned agencies and media are often providing incorrect information about the solution to these problems. It is not true that we can not overcome this difficulty without building hydropower stations, like the Kulekhani, that have very large storage reservoir. Similarly we do not seem to care to pay attention to the fact that the type of power plants must be selected based on the nature of the power demand. It is a well known fact that for a certain type of load it is far more economic to build diesel plants rather than the hydropower stations that produce electricity which can not be matched with the demand.

Capacity Value

According to the Karnali Project feasibility study the firm power (capacity and energy) value of the Karnali Project is expected to be US$ 81.9/MWh. Just the energy value including both firm and secondary energy is expected to be only about US $ 16.6/MWh. Thus the capacity value of the Karnali Project would be US$ 65.3/MWh. In other words, the firm capacity value of the Karnali Project is going to be about 4 times greater than the energy value.( SPOTLIGHT January 13, 2006)

Even Diesel Power Stations Could Be Economic

It can be clearly explained based on the feasibility study report of the Karnali Project that by comparison with the diesel plants it is economic to provide coal based thermal and combined cycle power stations ( it would also be true of the hydropower plants operating to supply exclusively base load energy) if the daily operation hours is far more than 5 hours. However, in case if the daily operation duration is less than 5 hours, the electricity generated by diesel power stations would be cheaper.

A diesel power station would be producing almost two times cheaper electricity by comparison with the coal based power stations if the daily operation period is only about 2 hours. On the contrary a coal based thermal power station would be producing 2 times cheaper electricity by comparison with the diesel power station if the daily operation duration is more than 15 hours. However, we should not forget the fact that the exact relationship between the prices of various types of energy is dependant on fuel prices.

Suicidal NEA Policy

Khimti Power Project deal with the private developer is a typical example that helps to a certain extent to explain why the present power shortage crisis precipitated, and why the NEA is now facing financial problems. Installed capacity of the Khimti Project is 60 MW whereas the firm capacity is only about 18 MW. It can readily be derived from the Karnali Project analysis that the actual power value of the Khimti Project would be less than half of the power value of any other similar type of run-of-the-river type project if such project is provided with a small daily storage pond that allows to operate that hydropower station at full capacity even when the river discharge is sharply reduced ( like the Marshyangdi, Kali-Gandaki, Trishuli, Sundarijal projects).

It is relatively easy to determine the energy value for secondary energy. It is, however, quite a complex task to disaggregate the value of firm energy and firm capacity because the firm energy and the firm capacity are inextricably linked. Despite such difficulties the Karnali Multipurpose Project study provides a good analysis of such disaggregation. The result of disaggregation of benefits into capacity and energy values derived from the Karnali study report helps to understand how we were terribly wrong to purchase on a big scale at a high price electricity from the private developers that fetches insignificant value.

Killing The 75 MW Kulekhai-3

Government of Japan had provided financial assistance to conduct feasibility study of the Kulekhani-3 Hydropower. Study team had considered various alternative capacities ranging from 15MW to 75 MW. They had rightly proposed that the capacity of the Kulekhani-3 Project could be raised to about 75 MW to supply electricity to meet the demand for peaking energy. Topography and other related conditions allow to increase the capacity of this project without undue rise in the project cost. The proposed 75 MW Kulekhani Project is not a complicated project and, thus, it could be implemented within a short period. Nepal was experiencing even at that time an acute shortage of electricity to meet the peaking demand.

Kulekhani-3, indeed, is the most suited project to meet our present energy demand. It is a great surprise that our experts in the NEA, Planning Commission and Electricity Department do not seem to have understanding about the capacity value. They are all the time insisting upon only the direct energy value solely in terms of generation cost per KWh electricity. In their opinion the 15 MW Kulekhani-3 Project is far better by comparison with the 75 MW Kulekhani-3 or other alternatives with slightly less capacity. As a result, the 75 MW Kulekhani-3 Project is being sidelined.

India too, like Nepal , is experiencing acute shortage of peaking energy for decades. In several states the load shedding has become a regular phenomenon. Now India is even planning to implement on a grand scale pumped storage plants to resolve the peaking power shortage problem.

Even Pumped Storage Plants Preferred

At present India is experiencing an acute shortage of peaking energy. At the beginning of the Eight Plan, the total peaking shortage was 20% whereas the energy shortage was only 9% of the total power generation. The thermal and nuclear power stations are suitable to supply electricity to meet the base load demand of the system. It is not economic to use them to supply peaking energy. Unlike Nepal , India is trying to resolve its power shortage problem based on sound engineering principles. It is making every effort to improve the hydrothermal mix for ensuring better system operating condition. However, the share of hydropower in the overall power generating capacity has steadily declined since the last few decades. The share of the hydropower in the overall power generating capacity was 50.6% in 1963. But few years before it has come down to only 25.66%.

Most of the good sites for the hydropower development have already been developed in the Northern India. There are even now several good sites for hydropower development in the North-Eastern India which have not as yet been used. However, such sites are at locations far away from the load centers. As a result, the Government of India in recent years had to embark on a plan to develop the pump storage schemes.