March 03, 2006

By DR. AB THAPA

It is reported in local newspapers that our government has approved the plan to implement the 15 MW Kulekhani-3 Project. It is quite regrettable that we often take decision even on very important subjects without thoroughly examining their wider implications. The decision to implement the 15 MW Kulekhani-3 Project is indeed going to be a big mistake. Such decision would deprive us of the opportunity to develop the big sized 75 MW Kulekhani-3 Project which is perhaps the most cost effective hydropower project to help us to a certain extent to resolve the problem to fulfill our present need for the peaking energy. The 15 MW Kulekhani-3 Project and any of its other alternatives with a capacity in excess of 15 MW including the 75 MW Kulekhani-3 Project would be mutually exclusive. As a result, the prospect of developing 75 MW Kulekhani-3 Project would be doomed forever. It is earnestly hoped that the concerned government agencies would thoroughly examine the entire gamut of the Kulekhani-3 Project before taking the final decision to implement this project.

Capacity of Kulekhai-3 Hydropower

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 should be raised to about 75 MW (originally it was 54 MW) to supply electricity to meet the demand for peaking energy. Topography and other related conditions allow increasing the capacity of this project without undue rise in the project cost.

Kulekhani-3, indeed, is the most suited project to meet our peaking energy demand. It is unfortunate that our experts in the NEA, Planning Commission and Electricity Department never seem to have understanding about the capacity value of hydropower generation. They are all the time insisting upon only the direct energy value solely in terms of the generation cost of per KWh electricity. In their opinion the 15 MW Kulekhani-3 Project is far better by comparison with the 54 MW or 75 MW Kulekhani-3.

Nepal is now experiencing an acute shortage of electricity to meet the demand for peaking. The proposed 75 MW Kulekhani Project could help to soften the impact of present power shortage crisis. The proposed 75 MW Kulekhani-3 Project is not a complicated project and, thus, it could be implemented within a short period.

The Kulekhani Reservoir and Existing Power Stations

The proposed Kulekhani development plan consists of a reservoir on the Kulekhani River with an effective storage volume of 73.3 million cu. m. and three hydropower stations in a cascade. The upper two hydropower stations ( Kulekhani 1 & 2) have already been built. The last hydropower station in the cascade is the Kulekhani-3, which is now proposed to be taken up for implementation.

The Kulekhani reservoir operation rule for the Kulekhani-1 with an installed capacity of 60MW is framed by a basic discharge pattern of 6.2 cum./sec. in the dry season from December to March and 2.1 cum./sec. in the wet season from April to November. The former is designed to generate four-hour peak power using the maximum discharge of 13.1 cum./sec. and 20-hour base load using 4.8 cum./sec. The latter is to utilize 6.55 cum./sec. for the peak power and 1.21 cum./sec. for the base load respectively.

Available water for the Kujlekhani-2 power station with an installed capacity of 32 MW is comprised of the outflow from the Kulekhani-1 and the runoff of the Mandu river. The firm discharge of the latter with 90% dependability at the intake is estimated to be 0.2 cum./sec. both in winter and summer. Thus the maximum Kulekhani-2 discharge is designed to be 13.3 cum./sec.

High Price of Peaking Energy in Thailand

Thailand’s electricity authorities have proven themselves to be extremely capable in handling the electricity planning. They have undertaken their generation expansion plan with great care taking full advantage of the experience gained by the developed countries in this field . They buy electricity from the private developers and the Laos Government in conformity to their actual demand and the purchase price has been fixed based on their true value to the Thailand’s electricity authority. Private developers are paid for peak hour supply at a rate almost twice as much as such payment rate for the rest of the time. Unfortunately the decision makers in our NEA never learned to follow sound engineering practice in launching generation expansion plan. We could have easily applied the time of the day tariff for the purchase of electricity from the private developers. Instead, the NEA is appearing to ridicule itself by considering to introduce the time of the day tariff for its sale to its innumerable big and small customers

In 1999 Thailand produced 89.4 billion kilowatt-hours (KWh) of electricity, up from about 3 billion KWh in 1968. Of this, 91 percent was produced by generating plants powered by oil, gas, and coal. The country imported 1 billion KWh of electricity from hydroelectric plants in neighboring Laos. At present the total installed capacity of power stations in Thailand might be well over 20 million KW.

Thailand purchases electricity from the private developers as well as from the Government of Laos. The electricity purchase tariff in force at the end of 1991 was tied up with the supply time. The rates were as presented hereinafter: (a) from 18.30 to 21.30 - 5.80 US Cents/KWh; (b) from 8.00 to 18.30 - 3.32 US Cents/KWh; (c) from 21.30 to 8.00 - 2.65 US Cents/KWh.

Thailand has already embarked on the construction of the pumped storage schemes to meet the growing demand for peaking energy. Many such pumped storage schemes are either in operation or under construction or planned for the construction in future. Lam Ta Khong Pumped-Storage Project is one of such schemes which has recently been completed.

Growing Demand for Peaking Energy in India

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

Firm Energy Versus Firm Capacity

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.

It should be explained that the Karnali Multipurpose Project would be having a power station with an installed capacity of 10.8 million KW. Firm capacity is expected to be 9 million KW. Average energy of the project would be 20842 GWh /year whereas the firm energy would be 15007 GWh/year. The values presented hereinafter have been discounted at 10% to the year 2001 though the whole analysis of the feasibility study has been discounted to the year 2003.

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.

In Conclusion

It is strongly urged to review the installed capacity of the Kulekhani-3 hydropower before taking the final decision to implement this very important project.

(Dr. Thapa writes on water resources)