Kulman Ghising in ending power cuts in Nepal

2018: Ghising leads the country's only power utility to end power cuts in Nepal

By NLRC Staff, February 2019

Contents

• Achievement summary
• The problem and the solution
• The days ahead
• Significance

Achievement summary

For over almost a decade, Nepal endured long power cuts, which lasted up to 16 hours a day during the dry seasons. The power outages severely disrupted the normal life of people and added further strain to a country recovering from a decade-long insurgency. When Kulman Ghising was appointed to lead the country's only power utility, he efficiently managed the utility's operations to end the power cuts entirely throughout the country.

The problem and the solution

Nepal is blessed with immense hydropower potential, and much of it is yet to be utilized. Its hydropower potential is estimated to be around 84,000 MW, of which 43,000 MW has been identified as economically viable.¹ Out of this potential, Nepal has only about 1000 MW of installed hydropower capacity,² which effectively means that less than three percent of Nepal's hydropower potential is currently being utilized.

All of the hydropower facilities, except for the Kulekhani storage hydropower in central Nepal, are run-of-river hydropower plants. With no or little water storage, the amount of water in the rivers affects their output, causing it to go down during the dry seasons when the water levels are low. Currently, Nepal's power demand hovers around 1500 MW during peak times, and the country imports up to 500 MW of electricity from its southern neighbor, India, as demand exceeds supply.²

In the past, as demand for power exceeded supply, the Nepal Electricity Authority (NEA), Nepal's state-owned power utility, had been scheduling power cuts, or as it is more commonly known, load-shedding, throughout the country disrupting daily lives and economic growth. A World Bank study to estimate the economic costs of the power cuts reported that had there been no power cuts, annual gross domestic product would have been seven percent higher and investment forty-eight percent higher than it was during 2008-2016.³

In the backdrop of this power crisis, the Pushpa Kamal Dahal administration appointed Ghising to take charge of the Nepal Electricity Authority (NEA) in 2016. Soon after he took office, Ghising strategically improved power demand management, upgraded generation, transmission and distribution systems to reduce and eventually end the power cuts. As an example of power demand management, he ended the practice of a select industries and businesses receiving uninterrupted power and diverted those savings to residential customers. In addition to demand management, other measures were taken to commission the near-complete hydropower plants (e.g., addition of Chameliya hydropower in western Nepal to the national grid), to reduce theft, waste and loss of power, and to improve the transmission infrastructure to increase the import capacity of power from India and to transfer power efficiently within the country (e.g., the commissioning of the 220 kV Khimti-Dhalkebar transmission line in central Nepal, which played a major role in ending power cuts in Kathmandu, the capital and most densely populated city⁴).

Equally, if not more, importantly, Ghising was able to obtain the full support of the government, which owns the utility, to carry out his plans.

Under Ghising's tenure, the utility not only eliminated the power cuts across the country but also turned itself into a profitable enterprise.²

The days ahead

As the world is moving towards cleaner and renewable energy, demand for hydropower will only increase in the days to come. Nepal being a mountainous country with significant hydropower potential, of which almost ninety-seven percent is yet to be utilized, and it being situated between two power hungry nations, India and China, has a rare opportunity to tap into this potential for sustainable development and revenue generation by exporting power.

India is already planning on future power imports from Nepal to meet its energy needs, mostly in northern India. India's central electricity regulator estimated that by 2036, India will be importing 15,800 MW of electricity from Nepal.⁵ Bhutan's success story in generating surplus power, mostly in collaboration with India, and generating revenue by exporting the surplus to India has shown that such projects are viable in Nepal.

Besides India, Nepal can also tap into the possibility of exporting power to a third country, mainly Bangladesh in the near term. In a 2018 cabinet level meeting on power trade between Bangladesh and Nepal, the leader of the Bangladeshi side said that Bangladesh planned to import 9000 MW of power from Nepal by 2040.⁶ Direct power trade between Bangladesh and Nepal has become easier following India's recent announcement of new opportunities for cross-border power trade between its neighbors.⁷ Bangladesh has already shown repeated interests in investing in new hydropower facilities in Nepal with the goal of exporting the generated power to Bangladesh. This is likely to happen soon provided Bangladesh and Nepal can keep India on board with such plans as the transmission lines between the two countries have to pass through India. Regional cooperation arrangements, like the Bangladesh, Bhutan, India, Nepal (BBIN) Initiative, will help foster such regional power trade.

Trend towards capacity building and investment in power trade can already be seen. In 2016, Nepal's first high-capacity interconnection (connection between power grids) between India and Nepal was constructed. The Dhalkebar-Muzaffarpur cross-border transmission line of about 1000 MW capacity is designed to facilitate power trade between the two nations.⁸ In 2018, the Nepal Electricity Authority (NEA) charged the capacity of the transmission line to 220 kV,² making Dhalkebar substation the first high-voltage substation of 220 kV in the country,⁹ and the transmission line is expected to be charged at its full capacity of 400 kV.¹ While, in the short term, the line will be primarily used to import power from India during the dry seasons, in the long term, it will also be used to export power when power generated in Nepal exceeds its domestic needs, which will likely be the case in the near future. Nepal is in the final stages of completing Upper Tamakoshi run-of-river hydropower plant near the Nepal-China border in northeast of the country. The 456 MW plant, being financed entirely from domestic resources, is being touted as one of the national pride projects² and will be the largest hydropower plant in the country. With its commissioning and addition of other public and private projects to the national grid, Nepal will soon be generating surplus power during the wet seasons.

More run-of-river hydropower plants are in the pipeline, e.g., work on Arun III (900 MW) has started as agreed upon between India and Nepal to build the plant under build-own-operate-transfer model. However, as current transmission infrastructure cannot handle projected supply, Nepal is shifting its focus to enhancing transmission and distribution systems.² It is also promoting alternate sources of power generation facilities, e.g., storage hydropower.² Kulekhani hydropower is currently the only storage hydropower in the country, where water is stored in a reservoir thereby allowing control over the timing of when to generate electricity, which, in Nepal's case, means that such hydropower can be utilized to generate electricity during the dry seasons.

Building mega dams for hydropower comes with its own risks. Historian Sunil Amrith identified three risks of building big dams in the Himalayan region, geopolitical (as many rivers flow through different countries and population downstream of dams gets more affected), ecological, and natural disaster related, like, as he put it, "the risk of collapse of dams from earthquakes in this seismically active region and of breach from flood bursts from glacial lakes upstream."¹⁰ India is eager to enhance Nepal's power export capacity, primarily to import power to meet its power demands. However, Nepal needs to ensure that any future steps in this regard are not measured solely in economic terms. The other costs of building hydropower plants, e.g., the adverse effect on the ecology of this biodiverse region and the displacement of local communities, should be considered with equal importance.

Significance

Nepal will have time to strategically plan its hydropower development in a sustainable manner, but the prompt resolution to the immediate crisis of long power cuts, that became possible primarily because of Ghising's leadership, has provided much-needed relief to the nation. Ghising's success in ending the power cuts in the country has made him a national hero. It may have been simply a matter of his effective management, aided with coincidental timing of the completion of a few new plants during his tenure, together with the government's appointment of a right person to lead the utility, that had ended the power cuts, but the message his success sent instilled hope and belief in many that a difference can be made to the society despite political and bureaucratic challenges. His success story made many believe that even a single person can make a significant contribution to the society. We hope that his success will serve as a precursor to Nepal being able to produce power in a sustainable and ecologically friendly manner, and it being a major exporter of clean energy.

Congratulations Mr. Ghising on your achievement and thank you for being a role model to many. Your success story will inspire many others in the community to craft their own success stories.

© NLRC

References:
[1] "Nepal." International Hydropower Association, www.hydropower.org/country-profiles/nepal. Accessed 5 Feb. 2019.
[2] Annual Report FY2017/18. Nepal Electricity Authority, 2018.
[3] Timilsina, Govinda R., et al. "How much has Nepal lost in the last decade due to load shedding? an economic assessment using a CGE model." Policy Research working paper 8468. World Bank Group (2018).
[4] Annual Report FY2016/17. Nepal Electricity Authority, 2017.
[5] India, Central Electricity Regulatory Commission. "Draft Central Electricity Regulatory Commission (Cross Border Trade of Electricity) Regulations, 2017." 2017.
[6] BSS [Bangladesh's national news agency]. "Bangladesh plans to import 9,000MW power from Nepal." The Daily Star [Bangladesh], 11 Aug. 2018. Accessed 5 Feb. 2019.
[7] India, Ministry of Power. "Guidelines for Import/Export (Cross Border) of Electricity - 2018." 2018.
[8] "Nepal-India Electricity Transmission and Trade Project." World Bank Project P115767. World Bank Group (2011).
[9] "World Bank Helps Strengthen Cross-Border Electricity Trade, First High Voltage (220 kV) Substation in Nepal Comes into Operation." Press Release 5 Sep. 2018, World Bank Group.
[10] Amrith, Sunil S. "The Race To Dam the Himalayas." The New York Times. 1 Dec. 2018. Accessed 5 Feb. 2019.