UPPER KARNALI DEVELOPMENT POLICY
KILLING THE GOOSE LAYING GOLDEN EGGS FOR A MEAGRE BENEFIT
Dr. A.B. Thapa
Until now the 10,800 MW Karnali Chisapani Project is regarded as the most attractive project among the mega-projects identified so far in Nepal for the generation of cheap peaking energy. As a result, several multinational companies are showing since a long time a great interest to acquire the right to implement this project. It might surprise many of us to know that the 4180 MW Upper Karnali Storage Project is even far more attractive. It is explained hereinafter why the Upper Karnali Storage Project would roughly be able generate almost half of the electricity generated by the Karnali Chisapani Project ( 20,800 GWh ) only at one third cost of the latter. In other words the Upper Karnali Storage Project would be generating A NET ADDITIONAL 3,300 GWh electricity vis-à-vis what the Karnali Chisapani Project would be able to generate for the same amount of investment.
Why Upper Karnali Storage So Attractive
The Karnali river makes a big loop in its lower reach near a place called Asare. From here the river flows in the south-east direction for about 25 kilometers, after that the river makes a complete reversal in its direction. The river comes back to a point just two kilometers away from its earlier position near Asare. There is a drop of about 150 meters in Karnali river bed elevations between these two positions merely two kilometers away from one another The project to utilize this bend for power generation is known as the Upper Karnali Project. . There are very good sites to build a large storage dam at the beginning of the bend. Thus, it makes the Upper Karnali Storage Project far superior to the 10,800 MW Karnali Chisapani Project in terms of per unit capacity investment cost because its hydropower station would be operating at a firm head two times greater than that of the latter though the total length of the waterway of both these hydropower plants would be almost exactly the same
Large Cost Reduction at Higher Heads
Of all the site characteristics, head is the most important. Design guidelines, 1989 approved by the American Society of Civil Engineers ( a document used throughout the world for the design of hydropower) has given some simple reasoning that would help to explain why the Upper Karnali project operating at a head about two times greater by comparison with the Chisapani hydropower could be built at far less per unit installed capacity cost. "Very simply if one doubles the head the quantity of water needed to produce a certain amount of energy is halved, Thus, for like site energy development the conduit area and reservoir volume are halved and further large cost reductions occur for powerhouse and machinery costs. This fundamental consideration is at the root of the large cost reductions that occur at higher heads."
Comparative Investment Cost of Upper Karnali Storage
By comparison with the mammoth 10,800 MW Karnali Chisapani Project the firm head of the Upper Karnali Storage Project would be almost two times greater. It can be derived based on Stage A Optimization Study Data of the World Bank financed Karnali Project (Chisapani) Study report that per KW installed capacity construction cost of the Upper Karnali Storage Project could be only about 2/3 of such cost of the project at Chisapani. If such comparative cost reduction advantage is treated as additional bonus to accrue to Nepal on top of normal royalty to be received from private developer then our country might be able to earn per year at present cost of peaking energy about US $ 300 million as extra bonus which is equivalent to gross value of the total annual production of paddy in the whole of country considered to be between 2.5 to 3 million tons at a price of about US $ 100 per ton.
Collosal National Loss
The monetary value of the additional annual power generation of the Upper Karnali Storage Project vis-à-vis the generation of the Karnali Chisapani Project for the same amount of investment would be equal to the gross value of the entire paddy produced in the whole of Nepal each year. Unfortunately, despite repeated cautioning, our government is determined to kill the hydropower potential of the Upper Karnali Storage Project by allowing to build the relatively very small Upper Karnali simple diversion project to generate just 300 MW. The 4180 MW Upper Karnali Storage Project and the 300 MW Upper Karnali Diversion Project are mutually exclusive.
World Bank Aided Report has Cautioned
The overwhelming superiority of the 4180 MW Upper Karnali storage project among the large hydropower projects identified so far in Nepal is so obvious that the team of the consultants conducting the pre-feasibility study of the 300 MW Upper Karnali project under the financial assistance of the World Bank must have been shocked by our ignorance. They found themselves duty bound to warn us to refrain from harming the 4180 MW Upper Karnali storage project. They have devoted a special chapter in the pre-feasibility report to caution us that the construction of the 300 MW Upper Karnali project would preclude the implementation of the 4180 MW Upper Karnali storage project.
Excerpts from Pre-feasibility Report
The World Bank supported pre-feasibility study has clearly explained that the 4180 MW Upper Karnali Storage Project and the 300 MW Upper Karnali Diversion Project are mutually exclusive. The relevant excerpt from the World Bank supported study report is presented below.
“Even when assuming that the KR 1 A run-of-river project (it indicates the small 300 MW Upper Karnali project) is a sunk cost, it will be seen that a single large power plant (4180 MW) associated with the major storage project is less costly than the combined cost of smaller plant at the same location (3532 MW) and a second power plant at the foot of the storage dam ( 348 MW) discharging directly into the KR 1A run-of-river project head pond. Based on this assessment, it appears that the later development of the major hydro storage project at Site KR 1 ( 4180 MW Upper Karnali Storage Project) would cause the KR 1A run-of-river project to be effectively discontinued. There may be limited opportunity for secondary energy generation during the periods of spillage”.
Foreign Expert for Optimum Development
Mr. Paul Terrell from the Bechtel International of the USA was Chief Advisor Consultant of the Upper Karnali Project study conducted under the World Bank financial assistance. Mr. Paul Terrell has categorically cautioned Nepal in his article published in the journal “HIMAL” that our country should never compromise optimum development for the sake of a quick deal.
