DISORIENTED WATER POLICY AND IPPAN
By Dr. AB Thapa
It is quite unfortunate that our government is launching hydropower projects to involve private sector completely disregarding technical, economic and other important issues. Such approach is very harmful to the nation and it would also land in great troubles those private developers who are sincerely interested to do a good job for our country.
It has been reported that our government has officially sought foreign investment in eight hydropower projects with a total generating capacity of 14,000 MW for power export to India. The projects offered by our government are 308MW Lower Arun, 402 MW ArunIII, 335 MW Upper Arun, 300 MW Dudh Kosi, 480 MW Kali Gandaki-2, 300 MW Upper Karnali and 10,800 MW Karnali( Chisapani) projects. Department of Electricity and Independent Power Producers of Nepal (IPPAN) had played key role in organizing a meeting to brief Indian and the US investors on hydropower projects earmarked to be developed by private developers. There would be a total confusion if a private developer dares to implement any of the above mentioned projects.
A Total Confusion About 10,800 MW Karnali.
10,800 MW Karnali Project ( Chisapani) is a mammoth multipurpose project. This project is expected to provide enormously large downstream irrigation, flood control and navigation benefits. The net irrigation benefit accruable to Nepal would be exceeding the power benefit. According to 1989 World Bank financed feasibility study report of the Karnali Multipurpose Project the total net discounted power benefit is 6.8 billion US $. Nepal can expect to get about 1.36 billion $ net power benefit if the private developer is charged 20% of the net power benefit as royalty. The total net irrigation benefit is 3.169 million $ and Nepal will get about 1.58 billion $ net irrigation benefit if we agree with India to apply the principle of the Columbia River Treaty signed between the USA and Canada about 50% sharing of the downstream benefit. Hence, the net irrigation benefit accruable to Nepal would exceed such power benefit. It need not be further explained that the power component of this project should not be taken up in isolation.
Upper Arun & Arun-3
A joint team of German, Japan and the USA consultants has described middle stretch of the Upper Arun “It is worth mentioning that the search of the worldwide inventory of the existing hydropower installations identified only one plant with a combined head and flow magnitudes greater than that of the Upper Arun - Kemano in British Columbia, Canada”. The Upper Arun might excel the Kemano Project if its full stretch is redeveloped to utilize the 1300m head at one go followed by the Arun-3 Project to be operated in tandem. It has been explained on several occasions that it would be very attractive if Arun III and Upper Arun projects are redesigned to operate in tandem. Dam building with de-sanding structures is the most expensive component of these projects. Fortunately it is possible to have only one dam common to both these projects. Such redesigning would greatly help to enhance the attractiveness of these projects. It should, however, be noted that the Arun development is good for the development of cheap firm power preferably to meet the demand for the base load. The proposed projects would not be so attractive to generate energy to meet very short period peaking demand because of the need to have enlarged sized long tunnel which invariably involves high cost. We would be committing a great blunder if we decide to develop the Upper Arun and the Arun-3 in isolation without exploring the possibility to utilize the potential of the Arun river in a most effective way to accrue optimum benefit to the country.
Kali Gandaki-2
Gandaki river basin power study had been done with the assistance of the UNDP and the final report was submitted in July, 1979. Even at that time this project had been dropped from the list of the candidate projects considered for the development because of the huge environmental implications. It has been clearly mentioned in the report “The Kali Gandaki No. 2 Project is considered to have the greatest environmental implications of the projects proposed in the Master Plan.”
Kali Gandaki-2 is a relatively small project. Its capacity would be only about 500 MW. According to the UNDP study report .even in 1970s about 47,000 persons living at that time inside the proposed reservoir area would have to be relocated. Now the number of the persons to be relocated might be well over 100,000. Would any private developer like to get his fingers badly burnt dabbling in the bid to implement such a highly problematic
Upper Karnali Project
The 4180 MW Upper Karnali Storage project about half the size of the Karnali Chisapani project could help to accrue our country enormously large benefit from export of electric power at highly competitive rates. Such excellent opportunity could turn into a desert mirage if we unwisely decide to lease out to build a relatively small 300 MW simple diversion project.
According to the World bank financed Upper Karnali pre-feasibility study report the 4180 MW Upper Karnali storage project and the small 300 MW Upper Karnali simple diversion project are mutually exclusive of one another. The excerpt from that report is given below.
Even when assuming that the KR 1 A run-of-river project ( 300 MW simple diversion 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 9 (300 MW) 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 would cause the KR 1A run-of-river ( 300 MW) project to be effectively discontinued. There may be limited opportunity for secondary energy generation during the periods of spillage.
Mr. Paul D. Terrell from the Bechtel International was advisor consultant to Karnali Project. He must have sensed our inability to understand the true value of our hydropower projects. He had expressed his concern in an article published in the journal “HIMAL”. He has written that Nepal should beware of unintentional “give away” in hydro development, and not rush to compromise the optimum development for the sake of a quick deal.
By comparison with the mammoth 10,800 MW Karnali Chisapani Project the firm head of the Upper Karnali 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 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. The total generation of the Upper Karnali Project could be about 10,000 GWh.
The Upper Karnali Hydroelectric Project could be one of the very few projects in the world to produce on a huge scale at an exceptionally low cost peaking energy which is in great demand all across India. Unfortunately, we are virtually unaware of this vast potential. At present we are on the verge of virtually ruining this potential by leasing out this site to a private developer to build a relatively small simple diversion type hydropower.
Dudh Kosi Project
We should be greatly ashamed that on one hand we agree with India to conduct a detailed feasibility study of the Kosi dam project, which has been considered indispensable to save the life and property of millions in India and Nepal, and on the other hand we invite private developer to implement the Dudh Kosi dam project that precludes the viability of the Kosi dam project. The proposed Dudh Kosi dam hydropower station will be completely submerged in the Kosi storage reservoir. Moreover, the water discharged from the hydropower of the Dudh Kosi dam project would be dropped directly into the Kosi reservoir bypassing the Sun-Kosi dam. Thus the dry season flow to be diverted into Terai for irrigation from the Sun-Kosi project would be greatly reduced.
Lower Arun Project
The proposed Lower Arun hydropower would be completely submerged into the Kosi storage reservoir. Thus the Lower Arun project and the Kosi dam project would be mutually exclusively of one another.
In Conclusion
We should conduct a through study and hold comprehensive consultations before taking important decisions on any major water resources development project.
(Dr. Thapa writes on water resources)
