Citing the rise in energy generation, NEA verbally asked power producers to reduce generation about a week ago. The Independent Power Producers Association of Nepal (IPPAN), on the other hand, says that about 500 MW of hydropower generated by independent power producers is going to waste. “Some 500 MW generated by 29 plants of independent power producers is going to waste,” IPPAN President Ganesh Karki said.
While the energy generated in the country is being wasted, the NEA hasn’t been able to provide sufficient electricity supply to industrial corridors in Banke and Birgunj. The sudden power cuts are affecting industrial productivity, says Anil Patwari, the president of the Birgunj Chamber of Commerce and Industries. “This has been the situation for the past many months. It would be easier for us if NEA cuts power supply by publishing a schedule,” he added. NEA has also not stopped electricity imports from India. According to NEA, it is importing a maximum of 87 MW from India at present. Mukesh Kafle, former executive director of NEA, said the utility has failed to synchronize its generation, transmission, and distribution system. “While making forecasts of electricity consumption, NEA needs to make investments to build transmission and distribution infrastructure,” he said. “We have already started to see problems.” NEA has already accepted that it was facing problems in distribution due to ‘structural issues'. Addressing an event recently, NEA Executive Director Kulman Ghising said although demand has increased, there have been problems in electricity distribution due to a low-capacity distribution system. “We can manage somehow this year, but our existing system cannot cope with the increased production and demand of the next year,” he added. According to Ghising, an investment of Rs 60m over five years is needed to improve the distribution system in the Kathmandu Valley. Similarly, Rs 500m would be needed to upgrade the distribution system all over the country. NEA needs around Rs 800bn over the next five years to upgrade distribution and transmission systems, according to Ghising. NEA has been saying that it has invested Rs 100bn to upgrade its distribution and transmission systems over the past three years. Despite this, the power supply hasn't been dependable. The cost of building a kilometer of a 400 kV transmission line comes to around Rs 100m. Similarly, it costs Rs 5bn to build a 400 kV substation and Rs 2bn to build a 125 kV substation. “Since we need to build infrastructure like these all over the country, a big investment is needed,” said Ghising. NEA has been signing power purchase agreements (PPAs) under the ‘take or pay’ system. But it has been signing ‘emergency’ PPAs with projects citing a lack of transmission lines. Under this arrangement, NEA pays for the power producer only if its alternative system supports the evacuation of power generated by hydropower projects. Such agreements have been signed for the purchase of a combined 500 MW. However, NEA is buying only around 250 MW at present. According to IPPAN Deputy General Secretary Prakash Dulal, power plants on the Dordi corridor are affected the most due to a lack of transmission. “NEA may not buy if its alternative transmission system doesn’t work,” he added. NEA has signed PPAs under ‘take or pay’ for 5,000 MW generated by independent power producers, while the process to sign PPAs for another 1,500 MW has begun. Plants having a combined capacity of 120 MW have been affected by floods and landslides. IPPAN has been saying that such ‘emergency’ PPAs won’t be acceptable to them. “NEA signed an emergency PPA two years ago, stating that it was for a few months only. But it is continuing the agreement for this year as well,” said IPPAN President Karki.
