Following the prime minister´s directive the Energy Ministry is exploring options to purchase diesel plant of 100 MW. Energy Secretary Balananda Paudel said the ministry is doing homework for purchasing thermal plant. [break]
"Thermal plants producing up to 10 MW are available in the international market, but those producing 6 MW seem to be optimal for us," secretary Paudel said revealing that a 100 MW plant would have an installation cost of around six billion rupees.
Secretary Paudel said a liter of diesel would produce about 3.65 units of electricity which puts the cost of per unit of electricity at around Rs 25 per unit at the existing diesel price. The high operating cost of diesel plant is bound to put further burden on the financially teetering Nepal Electricity Authority (NEA) which sells a unit of electricity at Rs 6.81 on average.
Paudel said the government can provide subsidy on diesel and he revealed that the ministry can also talk with industrialists, who themselves run smaller diesel plants at even higher operating cost, to buy electricity at higher rate from NEA.
Paudel said NEA will start importing 100 MW of energy from India by March next year which can limit power cuts to 14 hours per day. He said the diesel plants cannot be operated round the clock and running diesel plants of 100 MW for a maximum of 20 hours during the driest times can bring load-shedding down to around 11 hours a day.
Reduction in load-shedding, no doubt, is expected to have positive impact on the economy but energy experts say doing so through thermal plants would have greater negative impact. "We purchased around Rs 74 billion worth of petroleum products last year and that may rise up to Rs 100 billion this year even without operating thermal plants. If we operate thermal plants that would push it much further," an expert said.
He argued the government must focus on importing more power from India at a far lower rate than the cost of thermal production by increasing the capacity of the transmission line.
He suggested that the government would be better served by providing diesel subsidy to private companies which have around 150 MW of diesel plants than spending a huge capital on installing big thermal plants and also providing diesel subsidy to NEA on top of the capital expenditure.
"Bringing thermal plants is the worst option for the government and if at all thermal plants have to be installed it would be far better to hire such plants at a slightly higher rate for electricity than making such huge investment in purchasing plants," the expert insisted.
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