Electricity for whom?

Editorial in Arthik Abhiyan, 8th January 2011

Kathmandu,Nepal

When we talk about Nepal's water resources, the first thing that comes to mind is electricity. A crucial question we should ask while formulating policy for water is, for whom is the electricity being generated? Though Nepal's water policy should be for the welfare of the country, it looks as though it is made for foreigners.

Nepal's per capita consumption of electricity is 70 units per annum; it is 10,000 units per annum in developed countries. Experts say Nepal would require between 55,000 to 60,000MW if its people consumed as many units as in developed countries. This means if Nepal's economy grows at a rate of 7 to 8 per cent per annum, there is no question of exporting electricity at all. If we think we have enough energy to export it for money, we are just being plain stupid. But the Ministry of Energy has not accepted this truth.

A study conducted by Somnath Poudel shows that Nepal needs at least 10,000MW by 2018 if economic growth is to maintain its momentum. In this context, if we invite foreign investors for hydro projects and export 90 per cent of generated power, how can we meet even domestic demand for energy? We need to generate an additional 1,000MW per year to meet the demand. But existing energy policy has not acknowledged this fact.

For instance, 270MW of the 300MW to be generated from the Upper Karnali project is for export. We will get only 30MW. Besides, the electricity that we export at Rs 2 per unit will be imported at Rs 10 per unit later. What kind of energy economy is this that generates electricity at Rs 2 per unit to export it then imports it at Rs 10 per unit? Who is to answer this question? In fact, even if the energy is generated by foreign developers, the first priority should be to meet domestic demand. The government has not even thought about downstream benefits, which is unfortunate.

Nepali people and the Nepali economy should benefit from hydro projects irrespective of whoever makes the investment. We can only export surplus electricity after meeting domestic demand. Nepal has the first right to consume electricity generated within its borders, no matter who produces it.

Nepal should not only expect foreign investors to produce electricity for us. It should develop big projects like West Seti for domestic consumption instead of export. Where is the money? Nepal receives Rs 3 billion in remittances alone, most of which is spent on luxury goods. If we are able to divert just 10 per cent of this to infrastructure, Nepal will not have to live in darkness. For this, we need to develop a mechanism. All we need is the will and accountability towards people. But there is not much we can expect from the government.