Nepal’s hydropower sector is ‘Railway Engine’ for development: Pradeep Gangol

Kathmandu: Mr. Pradeep Gangol is an energy and management professional with over 25 years of experience in the sector in different capacities. He has experience in managing energy related organizations and projects in hydropower development and financing and rural electrification. Also he has experience in liaison with donors, government agencies, the private sector and non-governmental organizations. He has a proven track record of participatory and results-oriented managerial leadership. In this context, Nepalekhabar talked about the energy sector of the country. Here are excerpts:

A lot has been talked about hydropower sector of the country. As you have been involved in a sector for a long time, how do you analyze it?

Though Nepal’s hydropower plant was built about 100 years ago, its track record has been quite disappointing. For a long time, we had no blueprint or master plan for hydropower development in Nepal. Though Water and Energy Commission Secretariat was set up to function as a think tank for water and energy development, lately it has been made ‘dumping ground’ for dumping government officials who are not favored by the ruling government.

The Water and Energy Commission Secretariat should be authorized to work again as a think tank for Nepal’s water and power development. It should be authorized to prepare short, mid and long term plan for Nepal’s energy and water development. It should also serve as a watchdog and monitor the implementation of its plans.

We have institutional issues as well. We do not have Electricity Regulatory Commission to regulate the power sector. We do not have independent transmission line companies to plan, build and operate transmission lines. We do not yet have Power Trading Company to buy and sell power, though we are talking about power trade with India.

Our policies and laws are out dated and that needs to be amended or cancelled. The most unfortunate fact is that Nepal is not mature enough for foreign direct investment in Nepal. The long political transition period, lawlessness and irritatingly slow bureaucratic process among others have killed the enthusiasm of potential investors.

The government has been claiming that it will limit load shedding to 5 hours daily next year although it does not seem feasible at the moment when we are facing load shedding for 13 hours daily. How do you see it?

Though it might be possible to limit the load shedding to 5 hours daily during the wet season of the net year, it would be difficult to limit to five hours a day during dry seasons next year. We should keep in mind that the power production is reduced by one third during dry season due to drying up of river flows. We need to have many Pondage Run of river (PRoR) plants and storage projects like Kulekhani in the country if we want to reduce load shedding hours substantially during dry seasons.

If Nepal government is planning to limit the load shedding hours to five hours next year by importing power from India that is a different story.

As you have been involved in the sector for a long time, what needs to be done to benefit from the hydro-potential of the country?

A visionary leader is needed to lead Nepal’s energy sector, who can coordinate between various ministries and departments to facilitate hydropower development. The visionary leader should be bold enough to cancel or amend the outdated laws and policies to improve the policy environment. S/he should be an ardent supporter of private sector investment in Nepal’s hydropower development.

We should not forget that Nepal is too poor to pour large chunk of its limited resources into energy sector. Therefore, we must depend upon Foreign Direct Investment for hydropower development. However, capital for FDI is limited globally. Therefore, we must have very competitive FDI policies to entice investors to invest in Nepal.

You have worked in IPPAN for a long time – how do you see the Nepali power producers as they were blamed for talking more than actual power production and demanding unnecessary facilities from the government?

My feeling is that most of the IPPs are serious to build the projects, despite adverse conditions. If Nepal Government seriously steps in to help these IPPs in implementing the projects, there will be no more complaints against IPPs. It is the duty of the government to help these IPPs, simply because the plants will belong to the government after the expiry of concession agreement.

Currently, most of the projects are run-of-river type, so, we always face problem when the water flow lessens in the rivers, so how can construction of reservoir type projects be promoted?

We are not even doing the least that we can do to improve the power supply especially during peak hours of the day. We can incentivize power developers to build many PRoR projects, which will supply power during peak hours. As of now, there is no incentives for power developers to build PRoR projects.

In PRoR project, a pondage is created behind the dam, which will supply peak power for five to six hours. You need to make large investments in terms of larger diameter for power tunnel/power canals, larger turbine and generators etc. For example, if a PRoR plant is generating say five MW during day time, it might generate 8-10 MW during peak time. However, whether you build RoR or PRoR plant, the PPA tariff is the same. Then why would you want to build PRoR plants?

So, just imagine, twenty PRoR plants generating five MW each during peak hours, it would mean 100 MW during peak hours, without substantial investments by the government.

What should be the role of small power producers and big power producers for generating more electricity and ending the load shedding of the country?

In spite of criticism against Nepal’s small power producers , charging them ‘holding jholama khola (river in the bags)’ or holding licenses, I have deep sense of respect and honor for them for implementing hydropower projects in Nepal, where investment climate is not conducive to private sector in hydropower development. It is in fact, due to their persistent efforts to build the small power projects that now IPPs can claim more than 30 per cent share in Integrated Power System (national grid).

About the role of small and large power producers, once the country creates very pro-private sector investment policy to lure potential investors in Nepal, there will be floods of investments in Nepal’s hydropower development, both national and international. The ball is in the court of Nepal Government. Intentionally or unintentionally, policies, rules and regulations and laws are not helping to motivate investors to invest in Nepal’s power development.

There is a common trend in Nepal to criticize everything. For example we do not have the capacity of running big projects but if the contract was given to any foreign company, people start reacting negatively. In this context, what could be done for making big projects keeping national interest intact?

The general tendency of the people to react negatively against foreign investment is not going to serve our national interests. We should be very liberal in welcoming investment, be it national or international, for at least a ten year period for hydropower development. We should enhance our technical and managerial capacity to implement large projects during this period.

As we have heard a lot about producing thousands megawatts electricity within years from every government formed after the success of the 2006 April uprising, but load shedding is increasing every year. In this context, where do you see Nepal in the coming five years in terms of hydropower development?

Unless and until we change our mentality and mind set and push forward reforms aggressively in our policies, rules and regulations and laws, and pro-actively support and facilitate private sector investment, my strong feeling is that load shedding conditions will not improve substantially even after five years.

Do you have any message to the readers through Nepalekhabar?

We must realize that Nepal’s hydropower sector is the ‘Railway Engine’ for the country’s development that will pull other railway compartments like agriculture, forestry, health, education, economy, infrastructural development and others. To simplify this statement further, our future economic prosperity depends upon our hydropower development.

Therefore, I urge the readers of Nepalekhabar to take interest in hydropower issues, be familiar with issues and build up pressure upon the local, regional and national leaders, policy makers, parliamentarians and bureaucrats to take the hydropower issues seriously and urgently.

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