Opinion (Spotlight Weekly)

Misconceived Upper Karnali Project

By AB THAPA

There is a growing realization that the selection and implementation of development programs in Nepal are neither transparent nor accountable. It was recently reported in the press that local representatives of donor agencies like the World Bank and the Asian Development Bank were raising this issue in official meetings. This is a matter of great concern to our country. Often, decision-makers in developing countries do not hesitate to make excuses to carry out programs that would poison their country's economy in the name of liberalization or privatization. The Khimti project is one such example in Nepal. The much-hyped Melamchi project, which would require each consumer in Kathmandu valley to pay about Rs.5,000 per month for water supply, unless the government decides to pay from its own coffer a very large sum of money as subsidy, could also be added to the list of such projects.

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 in great demand all across India. Unfortunately, government institutions and donor agencies in Nepal 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 by comparison with its full-fledged version. There is an urgent need for holding debates to be participated by few specially invited well-recognized experts in the field of hydropower engineering on this issue before it is too late.

The Karnali Bend

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, after that, 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 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 the name was changed to Upper Karnali Project.

Feasibility Studies

The Karnali basin is the first to arouse keen interest in Nepal's vast hydropower development study. There are several attractive sites for the generation of cheap hydroelectric energy in this basin. In early 1960s an agreement was signed between His Majesty's Government and the United Nations Development Program 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 reports and general basin development report were submitted in February 1966.

In the 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-feasibity study of the Upper Karnali Hydroelectric Project (Karnali Bend Site). Unfortunately, the scope of the Upper Karnali Project study was deliberately made very narrow. The size of the project was scaled down to be suitable to meet the Nepal's internal requirement completely disregarding its vast potential to generate exceptionally cheap peaking energy for export to India. The concept of the small Upper Karnali Project is very simple. It includes a small diversion dam to provide daily regulation, a spillway for the passage of excess water across the dam particularly during the floods, de-sanding facility, a power tunnel across the Bend, and a power house at the downstream side of the Bend. The small Upper Karnali project is not at all an inferior project by comparison with many others similar in size. The proximity of the dam site from the power house helps to bring down the cost of the delivery tunnel and its related structures like the surge chambers, although the construction of a low-height diversion dam across a big river of the size of the Karnali flowing in a narrow gorge is not an advantage. Unfortunately, this small diversion project, as explained before, could preclude the viability of the large Upper Karnali Storage project. This is a matter of prime concern. It might astonish many of us to learn that the per unit investment cost (US dollars/ KW) of the Upper Karnali Storage project could be much less even by comparison with such cost of the Karnali Chisapani High Dam project. Therefore, this project could be far more attractive than any other projects for the export of peaking power to India including the Karnali Chisapani Dam project.

The Upper Karnali Storage Project

It has been explained in the Upper Karnali study report that a Karnali Bend storage hydro project could include a dam up to 260 meters in height. The most economical way of developing the full power potential of the Karnali Bend would result from construction of a large storage dam on the eastern side of the bend, a power tunnel across the bend and a generating station located on the western side of the bend. If the Upper Karnali Storage project were developed to its full potential, some 4000 MW of power at 25-percent capacity factor based on firm energy for meeting the peaking demand could be installed.

Comparison With Karnali Chisapani Project

The Upper Karnali Storage project and the Karnali Chisapani Storage project both would be having waterways quite comparable in length, but the Upper Karnali project would be operating at a head almost two times greater than that of the project at Chisapani. It makes the Upper Karnali project far more attractive for export of cheap peaking power to India than the Chisapani project. Reasons for it are explained below.

Of all the site characteristics, head is the most important. Design guidelines, 1989 approved by the American Society of Civil Engineers 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. "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." The lower investment cost means the generation cost of the electricity would also be less.

The Stage A study report of the Karnali Chisapani Project shows that the increase in hydraulic head greatly helps to enhance the net project benefit. It has been explained in the report that the incremental benefit would be about six times greater than the incremental cost if the height of the Chisapani dam is further raised over the present height fixed at 270 meters. It is stated in the report that the dam height was limited at 270 meters for the reason that higher reservoir levels and dam heights would cause the abutments of the dam to spread into the Banghar Khola upstream and would severely constrain project development between the downstream toe of the dam and the preferred spillway plunge pool location downstream. It is not satisfactorily explained in the report why other sites further upstream suitable for much higher dams were not considered for the optimization study.

A Great Loss To Nation

The 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 decided to lease out the Karnali bend site to a private developer to build a relatively small simple diversion project.

It might well turn out that the Upper Karnali storage project and the Upper Karnali simple diversion project are mutually exclusive. We will be certain about it only after the completion of a full-fledged detailed study of the Upper Karnali Storage project. Even in case these two projects are not mutually exclusive of one another, it would not be justifiable to implement the simple diversion project. It is the opinion expressed in the pre-feasibility report of the study carried out under the aegis of the World Bank. The excerpt from that report is given below.

Even when assuming that the KR 1 A run-of-river project (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 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 project to be effectively discontinued. There may be limited opportunity for secondary energy generation during the periods of spillage.

Advice From Donor Agencies

Nepal should always be very grateful to donor countries and institutions for enormous economic assistance being provided to develop our water resources. Nepal needs to be helped in future to establish close rapport with leading foreign institutions particularly in the field of water resources engineering to be constantly guided in planning and implementation of various programs so that our country would not be misled to take decisions detriment to the genuine interest of our people. Institutions like the International Center for Integrated Mountain Development could also be directed to play more active role.