PLANNING COMMISSION TURNING A BLIND EYE:
Great Loss of the Upper Karnali Hydro Potential
AB Thapa
It is a terrible shock to everybody possessing the slightest understanding of the water resources economics that our Government is now on the verge of destroying the Upper Karnali’s vast hydropower potential which could help to boost significantly our country’s national income while even the institution like National Planning Commission is seen turning a blind eye to these disastrous developments. Our Government wants to engage a private developer to implement a relatively very small 300 MW Upper Karnali Project precluding the viability of the mammoth 4,180 MW Upper Karnali Project. The latter, perhaps, can be ranked among the very few best hydropower projects in the whole world to generate cheap electricity on a large scale to meet peak load demand.
According to a rough estimation the comparative construction cost advantage of the 4,180 MW Upper Karnali storage project over the highly publicized 10,800MW Karnali Chisapani Project could allow to accrue to our country additional bonus benefit equivalent to total value of annual rice production of our entire country. The feasibility study report of the Upper Karnali Project carried out with the assistance of the World Bank has cautioned against the idea to implement the 300 MW Upper Karnali Project by pointing out the dire consequences. Chief Advisor from the Bechtel International assisting our Government in carrying out the feasibility study of the Upper Karnali project has clearly expressed in an article published in the journal “HIMAL” that Nepal should not compromise optimum development for the sake of a quick deal.
Should the National Planning Commission, an institution assigned to lead the national development works, remain indifferent to these extremely harmful decisions? Can not Planning Commission involve a trustworthy foreign expert to advise the Government on this highly important matter?
Why Upper Karnali Site Attractive
The Karnali basin is the first to arouse keen interest in Nepal's vast hydropower development possibility. There are several attractive sites for the generation of cheap hydroelectric energy in this basin. In early 1960s an agreement was signed between HMG of Nepal and the UNDP for providing assistance to conduct a survey of the Karnali river and its main tributaries culminating in a pre-investment report indicating hydroelectric potential of the river as well as the best sites for hydropower development. The final feasibility report and general basin development report were submitted in February, 1966.
In 1980s further studies of the two projects were carried out under the aegis of the World Bank. They are the feasibility study of the Karnali Dam Project (Chisapani) and the pre-feasibility study of the Upper Karnali Hydroelectric Project ( Karnali Bend Site).
The Karnali river makes a big loop in its lower reach near a place called Asare. From here the river flows in the south-east direction for about 25 kilometers; there after the river makes a complete reversal in its direction. The river comes back to a point just two kilometers away from its earlier position near Asare. There is a very big drop of about 150 meters in Karnali river bed elevations between these two positions merely two kilometers away from one another The project to utilize this bend for power generation was originally known as the Karnali Bend Project. Later on the name was changed to Upper Karnali Project. . There are very good sites to build a very high storage dam at the beginning of the bend. Thus, it makes the Upper Karnali Storage Project far superior to the 10,800 MW Karnali Chisapani Project in terms of per unit capacity investment cost because its hydropower station would be operating at a firm head two times greater than that of the latter though the total length of the waterway of both these hydropower plants would be almost exactly the same.
Large Cost Reduction at Higher Heads
Of all the site characteristics, head is the most important. Design guidelines, 1989 approved by the American Society of Civil Engineers ( a document used throughout the world for the design of hydropower) has given some simple reasoning that would help to explain why the Upper Karnali project operating at a head about two times greater by comparison with the Chisapani hydropower could be built at far less per unit installed capacity cost. It is explained in the guidelines quote, "Very simply if one doubles the head the quantity of water needed to produce a certain amount of energy is halved, Thus, for like site energy development the conduit area and reservoir volume are halved and further large cost reductions occur for powerhouse and machinery costs. This fundamental consideration is at the root of the large cost reductions that occur at higher heads", unquote. Needless to mention that the lower investment cost means the generation cost of the electricity would also be less.
Additional Bonus Benefit
By comparison with the mammoth 10,800 MW Karnali Chisapani Project the firm head of the Upper Karnali Storage Project would be almost two times greater. It can be derived based on Stage A Optimization Study Data of the World Bank financed Karnali Project (Chisapani) Study report that per KW installed capacity construction cost of the Upper Karnali Storage Project could be only about 70% of such cost of the project at Chisapani. If such comparative cost reduction advantage is treated as extra bonus to accrue to Nepal in addition to normal royalty to be received from private developer then Nepal might be able to receive per year about US $ 300 million as extra bonus which is the gross value of the total annual paddy produced in the whole country considered to be between 2.5 to 3 million tons at a price of about US $ 100 per ton.
The 4,180 MW Upper Karnali Storage Project is the most attractive hydropower project among the projects identified so far in Nepal. It also is, perhaps, among the very few most attractive hydropower projects in the whole world. It would be a great tragedy for Nepal if our Government did not reconsider its decision to push ahead the plan to allow private developer to implement the 300 MW Upper Karnali Diversion Project, which precludes the development of the 4,180 MW Upper Karnali Storage Project.
Upper Karnali Pre-feasibility Report
The World Bank supported pre-feasibility study has clearly explained that the 4180 MW Upper Karnali Storage Project and the 300 MW Upper Karnali Diversion Project are mutually exclusive. The relevant excerpt from the World Bank supported study report is presented below.
“Even when assuming that the KR 1 A run-of-river project (it indicates the small 300 MW Upper Karnali project) is a sunk cost, it will be seen that a single large power plant (4180 MW) associated with the major storage project is less costly than the combined cost of smaller plant at the same location (3532 MW) and a second power plant at the foot of the storage dam ( 408 MW) discharging directly into the KR 1A run-of-river project head pond. Based on this assessment, it appears that the later development of the major hydro storage project at Site KR 1 ( 4180 MW Upper Karnali Storage Project) would cause the KR 1A run-of-river project to be effectively discontinued. There may be limited opportunity for secondary energy generation during the periods of spillage”.
In Conclusion
Our grandiose national plans to develop our water resources to uplift the living condition of common Nepali would be nothing more than an empty rhetoric if our policy making institutions failed to intervene in time to save the 4180 MW Upper Karnali Storage Project which might be the best in the world for the generation of cheap peaking energy on a large scale. National Planning Commission should not hesitate to invite competent foreign experts for advice if we find ourselves not capable to make correct judgment on this very important matter.
(Dr. Thapa writes on water resources)
