The Looming Energy Glut And The No Option Trap

By S.B. Pun

IT IS indeed heartening that the 6 Mw Puwakhola in Ilam of the Nepal Electricity Authority (NEA) and the private sector Himal Power Limited’s 60 Mw Khimti on the Ramechhap/Dolakha border have started feeding valuable power into the national grid from April 2000. NEA’s 14 Mw Modi in Parbat and Bhotekoshi Power Company’s 36 Mw Bhotekoshi in Sindhupalchowk are slated to come on stream before the end of this year. By July 2001, when NEA’s major 144 Mw Kali Gandaki A and the public/ private 20 Mw Chilime come on stream, we would have added a whopping 280 Mw at a time when our total installed capacity is 315 Mw. This will mean a total capacity of 595 Mw in 2001, when our forecasted peak load then is 408 Mw. This will result in a Mw glut of 187 Mw.

Gwh Glut

With the addition of Puwa’s 42 Gwh, Khimti’s 350 Gwh, Modi’s 91 Gwh, Bhotekoshi’s 240 Gwh, Chilime’s 129 Gwh and Kali Gandaki A’s 840 Gwh the annual average energy availability from these plants total to 1,692 Gwh. The existing hydro plants’ annual energy supplying capability is about 1,200 Gwh—thus the total annual average energy availability in July 2002 will be 2,892 Gwh. This is at a time when the forecasted energy requirement in July 2002 is only 1967 Gwh. Hence, there is going to be a huge energy spill of 925 Gwh. In a tiny system like ours, when the capacity is doubled, this is quite natural. Energy spilling had occurred in the past as well when Trishuli and Marsyangdi were initially hooked into the system. We need not wail about this natural phenomenon. But what we definitely need to wail about is our complete lack of pre-planned strategy and complacency to tackle such a foreseen energy glut scenario.

As indicated above after Kali Gandaki A comes on stream, it has been forecasted that in July 2002 a massive 925 Gwh of energy will be spilled. Khimti and Bhote Koshi’s 590 Gwh of annual energy is on the TAKE OR PAY basis at the generation level. This is quite distinct from the low voltage consumers’ terminal level because the 23% loss has to be absorbed by NEA itself. NEA forecasts that it will be selling 1,475 Gwh of energy in July 2002. With BPC and the two private sector developers taking away 6,52 Gwh from NEA, this is a hefty 44% of NEA’s total energy sales. Hence, a very contradictory scenario of NEA as an extremely cash poor utility will emerge, despite being megawatt and giga watt hour rich. One can then visualize a scene where it will be the government itself and not the donors who will push to raise the electricity tariff in order to bail out NEA.

The Options: (i) Spill: This is the path of least resistance. The two major private developers, Khimti and Bhote Koshi, are on the TAKE OR PAY basis. As NEA will have to pay them even if they do not generate, NEA will have to make them generate. NEA will instead backdown its own generation thus spilling the valuable energy from plants that have been built at a high cost. (ii) Increase Domestic Consumption: Instead of spilling this precious energy, NEA will be forced to increase its domestic consumption through such incentives as the cheaper Time of Day and Seasonal Tariffs. In fact NEA has already started the metering of high tension consumers with this Time of Day meters. But our absorption capacity is very limited and the consumers who have already switched over to gas cooking may be reluctant to resort back to electricity unless the savings is quite substantial. Some industries may increase its consumption through such incentive mechanism but the overall impact to the system will not be substantial. (iii) Energy Intensive Industries: This is the best option for the country. The urea fertilizer plant that uses local indigenous raw materials (nitrogen from the air and hydrogen from water through electrolysis) is the best industry. We are already importing over 150,000 metric tons of urea from abroad spending our valuable scarce foreign exchange. Besides, fertilizer is one of the key inputs in the government’s agricultural perspective plan initiative. In 1985 the Japanese under our government’s request, had conducted a feasibility study and found that a 80,000 metric tons urea plant requiring 80 megawatt of power was feasible provided that electricity was supplied at 40% of the then prevailing tariff. This plant did not materialize more from the lack of commitment on our part than the lack of power. Similarly studies had been conducted in the past for putting in the arc furnaces for smelting scrap iron. This was also abandoned due to lack of power and high electricity tariff. We have abundant limestone for cement factories and though they are not electricity intensive industry they, however, have very good load factors. Our three cement factories at best can produce only 40% of the country’s demand. Yet the fourth cement factory at Surkhet is still doubtful whether it will ever take off the ground. These are the industries where we must be serious and committed.

Export to India: We are today importing around 50 Mw from India thus indicating that this amount could be easily exported back to India under the same existing networks. We are presently paying at about 4US Cents per unit and if this status quo is maintained then a substantial cash shortage headache of NEA will be solved, provided that the Indian State Electricity Boards pay. But if this export is done at the Spill Energy Value of 1.6 US Cents per unit then we would be burning our candle at both the ends: very little revenue to NEA’s coffers and our industries will not be able to compete with industries across the border that get power at spill energy value.

Industry Promotion Cell: One of the main functions of the Electricity Development Department is to promote the private sector in the development of the power sector. Now who should promote the energy consumption part? To a certain extent NEA, of course. But when it comes to large capital intensive energy intensive industries definitely not NEA. Is it the Ministry of Industries, the Ministry of Water Resources or the apex National Planning Commission? Anyway with only a year or so left before we begin spilling we are caught literally with our pants down. Do we export our "khera gairakheko" energy as different from water at the extremely low spill energy value of 1.6US Cents per unit to industries across the border? Or do we hurry up and install suitable energy intensive industries that our country requires? Our time is running out.

Final Word

When we double our installed capacity from 300 Mw to 600 Mw it is but natural that there will be heavy spillage in the system. Despite this fore knowledge we, the planners and executives, are doing precious little to improve this state of affairs. Our past is replete with countless examples of the no option traps that we have fallen into. If we do not wake up still then we will be heading for another "no option trap" whereby we will be forced to export at the spill energy value much to the detriment of our own industries that are being charged 9.2 Cents pe unit.

Early Childhood : The Foundations

THE Jomtien World Conference in 1990 was a milestone for advocates of early childhood care and development (ECCD) who succeeded in making the world’s youngest children a part of the global agenda for Education for All. "Learning begins at birth. This calls for early childhood care and initial education. These can be provided through arrangements involving families, communities or institutional programmes, as appropriate," stated the World Declaration on Education for All. A decade later, what has been achieved?

In a report prepared for the World Conference in Dakar, Dr Robert Myers, founder of the consultative Group on Early Childhood Care and Development, points out that there are a few cases of dramatic growth in some countries of the Caribbean, Latin America, in South and East Asia, but for most, the increased enrolment for the age group (0-8 years) has been incremental at 2% per year. He cautions against gene-ralisations however, given that every country has different circumstances to deal with.

A serious decline was noted in countries of the former Soviet Union where transition to a market-based economy, decentralisation and civil strife have disrupted extensive high quality early childhood care programmes. Many countries continue to reflect an urban and economic bias, thus, more children in rural communities, from low-income families and from indigenous communities do not yet have access to ECCD programmes. There is also a dominant focus on ECCD as preparation for formal school as shown by increased enrolment for children aged four to six. Programmes for the 0-3 age group, promoting integrated care and education, and socially and culturally relevant to communities, need more attention.

ECCD is still given low priority especially when countries experience economic difficulties and/or political crises. Dr Myers states: "the scant evidence suggests that government funding for ECCD is very low (often less than 2% of the total education budget). In most of Africa, the Middle East, the Caribbean and parts of Asia, the major responsibility for ECCD is left to families, communities and non-governmental organisa-tions." This is despite the benefits - now well documented - after a prolific decade in terms of the knowledge generated by research into the multidis-ciplinary field of ECCD.

We know that ECCD affects fertility rates; we know that it provides a foundation for life-long learning, and creates an entry point for broader community development efforts. A report on "the Integrated Project of Early Childhood Development (PIDI)" in Bolivia, by the World Bank, states that 40% of children who initially enrol show stunted psycho-social development. After one year in the programme, this is reduced to 20%. After two years, it is cut to 5%. Children in the PIDI non-formal, home-based daycare centres receive food, health and cognitive development services. Although the PIDI is still young, the information available suggests that primary schools enrolments for children leaving the centres at the age of six, are up from 20% in the absence of the programme. "Part of this large increase is probably the direct result of the improvements in the children’s health and nutrition levels. Part, no doubt, also stems from parents’ greater awareness of the benefits of education - a result of the parents’ active participation in the programme." As girls have a greater chance of continuing their schooling after the PIDI, so a beneficial impact is expected on decreasing infant mortality and reducing fertility rates.

The competition for resources is greater than ever but ECCD must be viewed as a viable preventive measure, and not as something that can wait until all other goals have been met. Governments must make the necessary commitment to young children with the necessary policies, regulatory frameworks and sufficient resources to meet these goals. It is the responsibility of governments to nurture effective partnerships that truly share the burden with families and civil society rather than pass on new burdens for them to shoulder.

UNESCO Source