GREATEST TRAGEDY FOR NEPAL : Upper Karnali Decision
By Dr. AB Thapa
The 4,180 MW Upper Karnali Storage Project is the most attractive hydropower project among the projects identified so far in Nepal . It also is, perhaps, among the very few most attractive hydropower projects in the whole world. It would be a great tragedy for Nepal if our Government did not reconsider its decision to push ahead the plan to allow private developer to implement the 300 MW Upper Karnali Diversion Project, which precludes the development of the 4,180 MW Upper Karnali Storage Project.
The Upper Karnali Storage Project can provide our country an extra net bonus benefit alone to the tune of about US $300 million per year which is approximately the gross value of the total annual production of the paddy in the whole Nepal estimated between 2.5 million to 3 million tons at a present price of about US $ 100 per ton. Surely such golden opportunity to enrich our country would vanish for ever if we continued to stick with our decision to implement the 300 MW Upper Karnali Project which prevents the development of the 4,180 MW Upper Karnali Storage Project.
Foreign Experts Against 300 MW Upper Karnali
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. The pre-feasibility study report prepared under his supervision unequivocally points out that the 300MW Upper Karnali Project and the 4,180 MW Upper Karnali Storage Project are mutually exclusive. It is a clear cut recommendation to guide us to come to the conclusion that we should completely drop the idea to implement the relatively very small 300 MW Upper Karnali Diversion Project by sacrificing the 4,180 MW Upper Karnali Storage Project. Furthermore, 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.
Upper Karnali 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 ( 408 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”.
Why Upper Karnali Storage So Attractive
The Karnali basin is the first to arouse keen interest in Nepal's vast hydropower development study. There are several attractive sites for the generation of cheap hydroelectric energy in this basin. In early 1960s an agreement was signed between HMG of Nepal and the UNDP for providing assistance to conduct a survey of the Karnali river and its main tributaries culminating in a pre-investment report indicating hydroelectric potential of the river as well as the best sites for hydropower development. The final feasibility report and general basin development report were submitted in February, 1966.
In 1980s further studies of the two projects were carried out under the aegis of the World Bank. They are the feasibility study of the Karnali Dam Project (Chisapani) and the pre-feasibility study of the Upper Karnali Hydroelectric Project ( Karnali Bend Site).
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 was originally known as the Karnali Bend Project. Later on the name was changed to Upper Karnali Project. . There are very good sites to build a very high 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." Needless to mention that the lower investment cost means the generation cost of the electricity would also be less.
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 (CJhisapani) Study report that per KW installed capacity construction cost of the Upper Karnali Storage Project could be only about 70% of such cost of the project at Chisapani. If such comparative cost reduction advantage is treated as extra bonus to accrue to Nepal in addition to normal royalty to be received from private developer then Nepal might be able to receive per year about US $ 300 million as extra bonus which is the gross value of the total annual paddy produced in the whole country considered to be between 2.5 to 3 million tons at a price of about US $ 100 per ton.
Duty of Engineering Community
Even foreigners, like Mr. Terrell, are seen to be deeply concerned about the mishandling of our natural resources. Alas, our own relevant authorities are hardly seen to be caring.
National Planning Commission and other related institutions instead of trying to distance themselves to avoid confrontation with their superiors should collaborate with other institutions on vital water resources development issues. Various relevant institutions, like Engineering Association, should also play active role in the development of our water resources projects. In the USA institutions like the American Society of Civil Engineers (ASCE) play very big role in development of civil engineering works. The ASCE publishes relevant technical journals. The ASCE guidelines are widely used for planning and designing hydroelectric developments. Certainly it is the duty of Engineering Association representing our engineering community to generate awareness about proper assessment of our development works among the policy makers by regularly holding discussions and seminars and prevent the great misfortune of our country being robbed of the opportunity to benefit from vital projects such as the Upper Karnali Storage Project which might be among the very few most attractive project in the whole world..
In Conclusion
Our grandiose national plans to develop our water resources to uplift the living condition of common Nepali would be nothing more than an empty rhetoric if our policy making institutions failed to intervene in time to save the 4180 MW Upper Karnali Storage Project which might be the best in the world for the generation of cheap peaking energy on a large scale. We should not hesitate to invite competent foreign experts for advice if we find ourselves not capable to make correct judgment on this very important matter.
(Dr. Thapa writes on water resources)
