Touted as the world's second richest country in water resources, Nepal has immense potential to generate hydro-electricity. More than 6,000 fast following rivers and the geographically apposite steep hill structure have made them energy friendly. Despite this potential, till date Nepal's energy potential has remained under-explored. It is estimated that the country's multiple source of water has a potential of producing almost 83,000 megawatt (MW), however, 42,000 mw is technically/economically feasible. But, as said by government data, only 67 percent of total population has access to electricity with approximately 756 of installed capacity. Energy deficit has been a major cause of slothful pace of Nepal's socio-economic development.Our neighboring country Bhutan, with only 353 megawatt of total electricity in 2000 has triumphantly been utilizing its water resources, and has aimed to add nearly 11,000 MW of hydro-energy to its national grid within the next five years. Bhutan has already started earning white dollar via energy trading though potentially it has less capability (according to experts, Bhutan's total capacity of generating electricity is nearly 30,000) in hydro than that of Nepal, which, in the same time frame, would likely be able to add 3,000 MW of hydropower.
Various research reports have pointed out that South Asian countries, excluding Bhutan, have been facing energy insufficiency. To tackle with the power shortfall that is escalating in the region, the concept of 'South Asian Energy Ring' had been proposed by the 12th South Asian Association for Regional Cooperation summit in 2004 for energy cooperation in the region. But it has not reached the operational level. The commitments—collective promotion of hydropower development, function of SAARC energy center, regional and cross-border transmission lines and power trade with some well off Asian countries—made by various SAARC summits seem to have reinvigorated the energy debate once again at the executive level. The concept of inter-regional and intra-regional energy cooperation should be put strategically on operational level through construction of the basic infrastructure.
Nepal has already signed a Power Trade Agreement (PTA) with India and Project Development Agreement (PDA) on Upper Karnali and Arun Third with Indian companies. This has optimistically widened the path for Nepal's hydro energy market. On the other side, India's prime concern is energy access as it is in need of huge amount of energy to achieve its aim to be an economic superpower. Estimation shows that India will need almost 300,000 MW by 2020.
Nepal, whose hydro sector has been facing immense funding gap, can undeniably be India's power house; however, Nepali authorities have not given serious thoughts to it. The lack of political willpower and policy continuations has caused to decelerate hydro energy production. Nevertheless the demand for energy has been escalating. On the one hand, our economy has been getting gradually shoddier, and on the other, we are not thinking of utilizing the immense fast following water resources to strengthen the state economy. Due to failure in utilizing water supply, our economy is still dependent on neighboring countries. Political instability with uncertainties in every state sector has failed to prioritize investment in hydropower.
As a consequence of inert development plan and economic policies, we suffer lethargic pace of economic development, and our hydro energy sector has highly been victimized by politics. Hydro energy sector could not remain immune from political tussles and conflict of interest of the stakeholders. Ministry of Energy, the Nepal Investment Board and other institutions are at loggerheads causing impediments in the process of easing hydro policies and bringing in capital.
Neither the Investment Board nor the Ministry of Energy seem capable enough to tackle the emerging challenges in energy sector. So, they should team up for bringing in more foreign investment. This is the time to bring in a large scale investment to flourish country's hydro sector that would escort country by laying strong foundation for country's prosperity. This is the time to think about sustainable development, not profusely politicizing development agendas.
Most of the under-constructed hydro projects are in run-of-river model. Nepali policymakers seem to have failed to diagnose the relationship between hydro-power and economy. There is a huge disconnect amid funding, plan and projects; and this is mainly because of our less visionary political class, weak bureaucratic structure, and frail institutional capacity. Thus, to reduce widening gap between energy supply and escalating demand, the government should take immediate initiation in technology transfer and emulate the best models from the neighboring countries like Bhutan.
It is also urgent to remodel bureaucratic structure and strengthen institutional capacity via devolution of economic power and increasing jurisdiction of the local government which could help the state move towards prosperous destination. Only the water resources can assist to boost up the socio-economic status of Nepali people living below poverty line.
The author is a freelance writer and researcher
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