Another distressing year at NEA for power generation

Published On: August 19, 2016 06:42 AM NPT By: Rudra Pangeni


KATHMANDU, Aug 18: Nepal Electricity Authority augmented its power supply by only 3 million units in a 12-month period ending mid-July, while the demand increased multifold. NEA is the country’s electricity monopoly.  

Only six small new power plants with a total capacity of 34 MW started generation over the year when citizens experienced the worst ever fuel crisis during the 20-week Indian blockade. There was a strong realization of the need to harness domestic rivers and generate enough electricity to replace LPG as a cooking fuel and encourage electric vehicles. But NEA’s performance in the past year remained bleak and ‘distressing’. 

NEA, which just marked its 31st anniversary, has nothing new to report for last fiscal year. Its annual report unveiled Wednesday states, “NEA experienced another distressing year in terms of energy generation at its own hydropower plants due to the unfavorable impact caused by the massive earthquake of April 2015.” 

NEA has said the shortfall in internal generation burdened it with a loss of Rs 11.74 billion in fiscal year 2015/16  compared to Rs 4.74 billion in 2014/15. “NEA has experienced yet another year of deteriorating operational and financial status,” reads the report. 

NEA has an accumulated loss of Rs 37 billion. It imported an additional 390 million units while annual generation in the country declined by 292 million units. 

As in past wasted years, nothing substantial has happened in the sector in the review year, said Amrit Man Nakarmi, professor at the Center for Energy Studies at the Institute of Engineering, Tribhuvan University. At least two power plants with a total capacity of 44 MW that were being developed by NEA were expected to come on stream last fiscal year. But contractor inaction and corruption stalled both plants. 

The Nepal-India cross-border transmission line that connects Dhalkebar and Mujaffarpur was completed but there is uncertainty over the setting up of a substation at Dhalkebar and this is sure to impact the plan to import 300 MW more in the current fiscal year. 

No progress has so far been made with about a dozen transmission line projects, without which efficient electricity supply has become a big hurdle. “I have come to know that there is no room in the existing transmission lines to bring more electricity into Kathmandu Valley,” new Energy Minister Janardan Sharma told a gathering of NEA staff. 

“Electricity demand is increasing, particularly with households switching away from cooking even though the LPG supply returned to normal earlier this year,” said Nakarmi. 
However, he also sees light at the end of the tunnel with two recent government reports.

“Plans to generate 10,000 MW in 10 years as well as a recent energy demand forecast of 10,000 MW by 2030 show that the country is headed in a right direction,” he added.  

Minister Sharma has announced a number of reform plans, including NEA unbundling into three separate entities for generation, distribution and transmission. This, however, is not a new plan as it was envisioned in the hydropower development policy of 2001. Nakarmi is of the view that delays in NEA’s unbundling is a major factor behind lack of new generation despite the huge demand.


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