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LOAD SHEDDING: Direct Result of Bad Planning
By DR. AB THAPA
Just few days back the Nepal Electricity Authority (NEA) has announced that it is immediately going to start load shedding. One of the vernacular dailies “Kantipur” has tried to explain why the NEA had to resort to load shedding. Needless to say that nobody expects newspapers would be able to explain the true cause of the present load shedding. The daily and other media, however, must be thanked for their efforts to highlight this serious issue.
For many of us closely following the activities related to Nepal ’s water resources development, in general, and the hydropower generation expansion, in particular, the news of the load shedding has not come as a complete surprise. Everybody knew that the NEA would be forced in very near future to resort to load shedding. An attempt was made to explain about it in one of the articles published in the journal “SPOTLIGHT” on the NEA’s Annual Report 2003/4. The excerpt from that article is given hereinafter.
“The IPP owned hydropower plants are not going to be helpful to the NEA in future also to mitigate crisis of power shortage when the demand for electricity further increases. The total present firm capacity of all the IPP owned hydropower stations might be only about 60 MW during the critical dry season months when the demand for electricity is the highest despite the fact that the present total installed capacity of the IPP owned hydropower stations is about 140 MW. As a result, the real total generating capacity in the system would be only about 505 MW( excluding procurement from India) which is less than the maximum peak demand recorded at 515 MW last year. Thus in the coming winter season load shedding would be inevitable if electricity is not imported from India”.
Low-Valued Khimti Project Energy
Khimti Power Project deal with the private developer is a typical example that helps to a certain extent to explain why so quickly the present power shortage crisis precipitated, and why the NEA is now facing financial problems. Installed capacity of the Khimti Project is 60 MW whereas the firm capacity is only about 18 MW. It can readily be derived from the Karnali Project analysis that the actual power value of the Khimti Project would be less than half of the power value of any other similar type of run-of-the-river type project. If such project is provided with a small daily storage pond that would allow to operate the hydropower station at full capacity even when the river discharge is sharply reduced ( like Marshyangdi, Kali-Gandaki, Trishuli, Sundarijal projects).
It is relatively easy to determine the energy value for secondary energy. It is, however, quite a complex task to disaggregate the value of firm energy and firm capacity because the firm energy and the firm capacity are inextricably linked. Despite such difficulties the Karnali Multipurpose Project study provides a good analysis of such disaggregation. The result of disaggregation of benefits into capacity and energy values derived from the Karnali study report helps to understand how we were terribly wrong to purchase on a big scale at a high price electricity from the private developers that fetches insignificant value.
It should be explained that the Karnali Multipurpose Project would be having a power station with an installed capacity of 10.8 million KW. Firm capacity is expected to be 9 million KW. Average energy of the project would be 20842 GWh /year whereas the firm energy would be 15007 GWh/year. The values presented hereinafter have been discounted at 10% to the year 2001 though the whole analysis of the feasibility study has been discounted to the year 2003.
According to the Karnali Project feasibility study the firm power (capacity and energy) value of the Karnali Project is expected to be US$ 81.9/MWh. Just the energy value including both firm and secondary energy is expected to be only about US $ 16.6/MWh. Thus the capacity value of the Karnali Project would be US$ 65.3/MWh. In other words, the firm capacity value of the Karnali Project is going to be about 4 times greater than the energy value.
Electricity Generation Expansion
Most of the foreign donors and development banks had helped Nepal to implement hydropower projects applying sound engineering practices. They have conducted on our behalf thorough studies of the mega projects like the Karnali High Dam Project. Unfortunately, we have not even cared to study carefully the reports of those very important projects. As a result, we are, in fact, misleading the country by pushing ahead to implement the 300 MW Upper Karnali Mini Project that would preclude the viability of the 4000MW Upper Karnali Project, which is one of the most attractive hydropower projects, despite the clear warning contained in the World Bank supported feasibility study report.
It is certain that the demand for electricity in Nepal would be rapidly growing in future also. This trend is perhaps primarily due to shifting of the population from the rural to urban areas. Thus there is a need for launching a sound electricity generation expansion plan. It is feared that we might go terribly wrong if we did not correct in time our wrong perception that the hydropower can be planned and implemented without giving due regard to technical and economic matters.
Everybody knows that, at present, the actual generation capacity of our hydropower plants is greatly reduced during the winter seasons when the demand for electricity is the highest. It is quite clear that we are already experiencing a capacity deficit though we might still be running into significant energy surpluses. It, indeed, is a serious drawback. Concerned agencies and media are often providing incorrect information about the solution to these problems. It is not true that we cannot overcome this difficulty without building hydropower stations, like the Kulekhani, that have very large storage reservoir. Similarly we do not seem to care to pay attention to the fact that the type of power plant must be selected based on the nature of the power demand. It is a well known fact that for a certain type of load it is far more economic to build diesel plants than other types of power stations.
Karnali Project Feasibility Study
Power system study of India ’s northern grid was conducted under the Karnali Project feasibility study. The feasibility study has arrived at the conclusion that at capacity factors below 20% the diesel plants would be far more economic (for the year 2000) in terms of energy as well as capacity by comparison with combined cycle, coal based or other type of power stations.
Kulekhani-3 Confusion
Government of Japan had provided financial assistance to conduct feasibility study of the Kulekhani-3 hydropower. Study team had considered various alternative capacities ranging from 15MW to 75 MW. They had rightly proposed that the capacity of the Kulekhani-3 Project should be raised to about 75 MW to supply electricity to meet the demand for peaking energy. Topography and other related conditions allow increasing the capacity of this project without undue rise in the project cost. The proposed 75 MW Kulekhani Project is not a complicated project and, thus, it could be implemented within a short period. Nepal was experiencing at that time acute shortage of electricity to meet the peaking demand.
Kulekhani-3, indeed, was the most suited project to meet our energy demand. It was a great surprise that our experts in the NEA, Planning Commission and Electricity Department did not seem to have any understanding about the capacity value. They were all the time insisting upon only the direct energy value solely in terms of generation cost of per KWh electricity. In their opinion the 15 MW Kulekhani-3 Project was far better by comparison with the 75 MW Kulekhani-3. As a result, the 75 MW Kulekhani-3 Project was sidelined.
India , too, like Nepal , is experiencing acute shortage of peaking energy for decades. In several states the load shedding has become a regular phenomenon. Now India is even planning to implement on a grand scale pumped storage plants to resolve the peaking power shortage problem.
Why India Chooses Pumped Storage Plants
At present, India is experiencing an acute shortage of peaking energy. At the beginning of the Eight Plan, the total peaking shortage was 20% whereas the energy shortage was only 9% of the total power generation. The thermal and nuclear power stations are suitable to supply electricity to meet the base load demand of the system. It is not economic to use them to supply peaking energy. Unlike Nepal , India is trying to resolve its power shortage problem based on sound engineering principles. It is making every effort to improve the hydrothermal mix for ensuring better system operating condition. However, the share of hydropower in the overall power generating capacity has steadily declined since the last few decades. The share of the hydropower in the overall power generating capacity was 50.6% in 1963. But few years before it has come down to only 25.66%.
Most of the good sites for the hydropower development have already been developed in the Northern India. There are even now several good sites for hydropower development in the North-Eastern India which have not as yet been used. However, such sites are at locations far away from the load centers. As a result, the Government of India in recent years had to embark on a plan to develop the pump storage schemes.
(Dr. Thapa writes on water resources)
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