NEA's energy demand forecast will be reviewed, says NPC VC
KATHMANDU, Dec 7: National Planning Commission (NPC) Vice Chairman Yubaraj Khatiwada on Monday said that energy demand forecast of Nepal Electricity Authority (NEA) will be reviewed. Speaking at an interaction on energy crisis organized by National Business Initiative, Khatiwada said that the current forecast is in linear model and based on suppressed demand which does not reflect the reality. “The demand forecast should be reviewed now, keeping fossil fuel substitution in mind. We cannot achieve economic progress with the existing energy demand forecast,” added Khatiwada. Country's energy demand is growing by around 100 MW annually. But growth in hydropower generation is disappointingly low.
According to NEA's demand forecast, peak load demand will be only 2,000 MW by 2019/20 and 4,100 MW by 2030. Energy experts and independent power producers have long been demanding that NEA review its energy demand forecast, stating that the forecast is suppressed and conservative and that it doesn't consider increasing use of electricity for cooking purpose. “With LP gas in short supply because of the blockade, people are in desperate need of electricity to prepare meal,” Energy expert Amrit Man Nakarmi said, presenting a paper on Energy Consumption in Nepal. He also said demand for electricity has increased by around 400 MW after India imposed blockade. “It's a good opportunity to replace import of petroleum products,” he added.
The country imports petroleum products worth around Rs 50 billion annually. In his paper, Sher Singh Bhat, deputy managing director of NEA, denied demand for electricity has increased. “Rise in demand mostly comes from rural areas that too during peak hours,” he added. He further said peak hour demand currently stands at 1,350 MW which falls during normal hours.
NEA's refusal to buy energy referring to the energy demand forecast has worried project developers. The power utility says energy will be surplus in national grid after 2017/18.
Khatiwada also said NEA has to be prepared to sign Power Purchase Agreement with firms generating energy from solar and wind plants. He also said NPC will include energy and food security as strategic issues in upcoming plans. Commenting on different hydropower project development models, including the development committee model, Khatiwada said hydropower development is not like running a trust. The government is building Budhigandaki - the largest storage project in the country - in development committee model. The development modality of Nalsyaugadh Hydropower Project (400 MW) is also the same.
“Company formation is the best model for hydropower project development in Nepal as it can also transfer ownership to public by launching initial public offering,” added Khatiwada. He also said Nepal will be able to export energy by developing mega projects. “The government has already signing Power Trade Agreement (PTA) to facilitate energy export,” he added. The government has also signed project development agreements with Indian firms Satluj Jal Vidyut Nigam for Arun III and GMR for Upper Karnali.