In December, forecasters predicted that Nepal would receive more rain than the three decade average rainfall this winter. We are halfway through winter, and many parts of the country have not received a single drop of rain for four months. Terrace fields in the mountains are dry, and in the plains winter wheat is drying up. Many Himalayan mountains are naked and snowless.&nbsp; “Mukut Himal and many mountains are just bare rock when they should be white with new snow this time of year,” says Madan Sigdel of Tribhuvan University who returned from Upper Dolpo district last week. Nepal receives an average of 60mm of rain during the three coldest months. However, the Department of Hydrology and Meteorology has recorded just 1.9mm of rain so far this winter. So far, at least, the forecasters have been dead wrong. The 2023-24 winter is turning out to be driest in recent years.&nbsp; Bibhuti Pokharel of the Department of Hydrology and Meteorology says that it is too early to declare his office’s weather models wrong. He adds, “Ours was a long-term forecast, it may not have rained yet, but it might rain more than the average during the remaining one-and-a-half months of winter.”&nbsp; Indeed, extreme weather events induced by the climate crisis may not see a change in seasonal precipitation totals, but the rain or snow may fall all at once with destructive force.&nbsp; Winter weather systems in Nepal are dominated by westerly fronts riding the jetstream that travel all the way from the Mediterranean, passing through Iran, Afghanistan and Pakistan. However, in recent years, the moisture is mostly spent by the time the westerlies reach Nepal.&nbsp; “Studies have shown that the increase in sea surface temperature in the Mediterranean has made the whole region warmer and drier,” explains Binod Pokharel, another hydrology and meteorology professor at Tribhuvan University. “This has meant that the winter wind from the west carries less moisture.” Climate is also greatly influenced by the El Niño and La Niña systems that develop in the Pacific Ocean. El Niño occurs when there are above-average sea surface temperatures in the central and eastern tropical Pacific Ocean while cooling of the ocean there triggers the La Niña. The two events occur every two to seven years, on average.&nbsp; During the La Niña phenomenon, cooler sea surface temperatures in the Pacific change wind patterns, disrupting the westerlies and leading to less rainfall. Last winter the La Niña system was active when there was no rainfall in Nepal.&nbsp; However, the El Niño system replaced La Niña during the first half of 2023, and the Department of Meteorology has estimated that the El Niño system in the Pacific Ocean will persist right through this winter. Nepal has previously had more rain than average when the El Niño system was active. An active El Niño system means there will be more than average rainfall, confirms Sudarshan Humagain of the Meteorology Department. “However, it must be noted that in some years, there has been less than average rain when El Niño is active,” he adds.&nbsp; What this means is that with climate change, weather patterns have become so unpredictable that most long-term forecasts tend to be inaccurate. &nbsp; Indeed, even with an active El Niño, winter rain-bearing westerlies have not been as active as before in Nepal. Periods without rainfall are classified as drought when the total rainfall is less than 75% of the annual average. The trend so far indicates that Nepal is heading for another winter drought, with a significant part of the country not having had rainfall since October.&nbsp; Last year's winter was similarly dry with just 12.9mm of rain, the lowest precipitation recorded in the last 15 years.&nbsp; Data shows that 12 out of the last 18 winters had less than average rainfall, and eight out of those 12 winters had droughts. The trend is that winter rainfall is pushed towards the end of the season, and then it falls all at once.&nbsp; About 80% of the annual rainfall in Nepal occurs during the monsoon months from June to September, and winter generally sees only up to 4% of average yearly rain. “This means that two or three instances of heavy rain are normal for winter months,” says Humagain of the Meteorology Department.&nbsp; The 2023 Synthesis Report by the United Nations Intergovernmental Panel on Climate Change (IPCC) pointed out that Asia would experience the effects of extreme rainfall variability and drought in the short term as well as long term. The report also noted that winter temperatures are going up across South Asia and 2023 was the hottest year on record.&nbsp; “It is certain that winter rainfall is declining while winter temperatures are increasing,” explains Professor Pokharel at Tribhuvan University. “Globally, there has been a trend towards more intense rainfall in the monsoon and falling winter precipitation, and this trend could be the norm in coming years.&nbsp; The lack of winter rain and the fact that it is still too early for the winter thaw means that Nepal’s rivers are all running low. This means the country’s total hydropower generation capacity has dropped by 20%, and the shortfall has to be met by power imports from India. At present, Nepal consumes 1,305MW of electricity on average per day, and nearly one-fourth of it is being imported from India this winter. The figure is higher for morning and evening peak hours. “Power generation has declined drastically, and is expected to go down further as chances of rainfall look slim,” says Prakash Chandra Dulal of the Independent Power Producers' Association, Nepal (IPPAN) “The output of private sector projects usually drops by to 25-28% in winter.” The reason is that all private power plants are run of the river type and not reservoirs that would store monsoon rainfall. Nepal has only one reservoir project, Kulekhani which was built in 1984. The second one is finally under construction on the Seti River in Tanahu.&nbsp; Generating more electricity in winter is more profitable to hydropower producers because the state-run utility Nepal Electricity Authority (NEA) &nbsp;buys the power for almost twice the price per unit in winter compared to the monsoon standard rate.&nbsp; “The lack of rainfall and decreased river flow costs us around Rs4 million per megawatt,” says Sura Prasad Adhikari of Barahi Hydro Limited.&nbsp; Even with imports from India, Nepal’s industries are suffering from power cuts.&nbsp; Farmers across Nepal also rely on winter rain more than they do on irrigation systems. Ravi Kiran Adhikari of the Department of Agriculture says that the production of wheat, barley, mustard, lentils, citrus and vegetables is significantly reduced because of winter drought. “There is still time for the crops to revive if it rains during the remaining months of the winter,” says Adhikari, “But if there is no rain, then our crop output will be seriously affected.”  <figure> <img src="https://publisher-publish.s3.eu-central-1.amazonaws.com/pb-nepalitimes/swp/asv65r/media/20240117130136_7ef5843b015cb7ae360afa5c77bcec1c0b085c0fcc5bb9d121bb38b2877ffa4a.jpg" data-media-id="editor_0" data-image-id="20240117130136_7ef5843b015cb7ae360afa5c77bcec1c0b085c0fcc5bb9d121bb38b2877ffa4a" data-rendition-name="original" width="1744" height="1000" loading="lazy" alt="Winter drought NT"> <figcaption>A NASA FIRMS image of wildfires burning in Nepal in the past week. Each dot represents a major fire detected by infrared sensors on the satellite. The picture also shows dense fog blanketing the Indian plains and the Tarai.</figcaption> </figure>  Meanwhile, lack of rain in winter increases the chance of wildfire as happened in the winter of 2021-22 when the Air Quality Index in Kathmandu soared to record-breaking 700.&nbsp; As it is, air pollution in Nepal gets worse during winter months in the Tarai and Kathmandu because of temperature inversion and industrial pollutants from north India.&nbsp; This year’s winter drought is already sparking wildfires, with 48 major fires detected by the NASA FIRMS satellite in the past week.

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Nepal suffers another winter drought

Seen from a vantage point high above the Seti River near Damauli, excavators and tipper trucks look like tiny insects clawing away at a cliff. Occasionally there is the sound of dynamite blasting at the rock face. This is the Tanahu Hydropower Project, and it is an indication of how stagnant Nepal’s energy planning has been that this is only the second reservoir scheme after <a href="https://nepalitimes.com/banner/climate-smarter-himalayan-infrastructure">the Kulekhani Dam</a> was commissioned in 1982. &nbsp;&nbsp; The workers have nearly completed drilling a tunnel to divert the Seti’s turbid sediment-laden water so construction of the 140m high concrete dam can begin. When completed, the reservoir will be 7.25 sq km in area and store nearly 300 million m³ of monsoon runoff. And unlike Kulekhani, the Seti is a snow-fed river originating in the glacier below Annapurna 4.&nbsp;  <figure> <img src="https://publisher-publish.s3.eu-central-1.amazonaws.com/pb-nepalitimes/swp/asv65r/media/20231228101236_c757ef30ebe38c1fb97b2e57cac11eb6c237191f067b5e6d467933afeb49023b.jpg" data-media-id="editor_1" data-image-id="20231228101236_c757ef30ebe38c1fb97b2e57cac11eb6c237191f067b5e6d467933afeb49023b" data-rendition-name="original" width="624" height="400" loading="lazy" alt="Tanahu Hydropower"> </figure>   <figure> <img src="https://publisher-publish.s3.eu-central-1.amazonaws.com/pb-nepalitimes/swp/asv65r/media/20231228101252_1f49967359964e87c73640576b17c765f6fe153a0fbd1c11f07cefe8012b60d1.jpg" data-media-id="editor_2" data-image-id="20231228101252_1f49967359964e87c73640576b17c765f6fe153a0fbd1c11f07cefe8012b60d1" data-rendition-name="original" width="1443" height="1111" loading="lazy" alt="Tanahu reservoir"> <figcaption>The 3D modelling of the Dam in Tanahu. Photo: TANAHU HYDROPOWER LIMITED</figcaption> </figure>  A 420m head on the Seti will take water through 7.25m wide tunnels and penstock pipes to an underground powerhouse to give the scheme an installed capacity of 140MW and an annual energy generation of 587.7GWh. While this capacity is less than other projects like Tama Kosi, the stored water can be drained at peak hours and during the dry season to augment electricity supply and keep the water flowing downstream. Also called Upper Seti, this project funded by the Japan International Cooperation Agency (JICA), Asian Development Bank (ADB), European Investment Bank (EIB) and Nepal Electricity Authority (NEA) is designed for at least six hours of peak operation during the driest months of the year. “Most of Nepal’s hydropower projects are run-of-the-river projects which means we can’t store water for winter months when domestic demand is highest,” says engineer Raja Bhai Shilpakar, Tanahu's project manager. “We must shift our focus to reservoir projects now to ensure Nepal’s energy security and to reduce power import.” Indeed, while Nepal has an installed capacity of around 2,800MW in the monsoon, and sold electricity worth Rs15 billion to India this summer, NEA is still importing power from Indian thermal plants to meet 30% of the winter demand.&nbsp;  <figure> <img src="https://publisher-publish.s3.eu-central-1.amazonaws.com/pb-nepalitimes/swp/asv65r/media/20231228101228_9c08ea43a75978bd194b02fbaf030ce5413d33609ff601e70d8912b60bde69e3.jpg" data-media-id="editor_3" data-image-id="20231228101228_9c08ea43a75978bd194b02fbaf030ce5413d33609ff601e70d8912b60bde69e3" data-rendition-name="original" width="1500" height="1125" loading="lazy" alt="Tanahu Hydropower"> <figcaption>GREEN ENERGY: Dam site of the under-construction Tanahu Hydropower Project with a 25km long reservoir which will be completed in May 2026. The concrete dam will be 140m in height and hold 295 million m³ of monsoon runoff. Photo: TANAHU HYDROPOWER LIMITED</figcaption> </figure>  Winter generation is low because the rivers are running low and this situation has been made worse by prolonged post-monsoon droughts. Last year, NEA said power supply fell by 20% of the winter average because there was no precipitation and melting of snow.&nbsp; In its new proposed draft, the National Planning Commission (NPC) has set a power generation target of 11,769MW in the next five years. The private sector, which generates nearly 80% of current electricity supply, is not so optimistic given the bureaucratic and financing hurdles. &nbsp; But even then, there will still be a supply shortfall unless more reservoir projects are built to even out the annual generation profile. Besides Tanahu, reservoir projects are planned on the Budi Gandaki, Tamor and Upper Arun, but those will not be ready for another ten years. Dams are also much more costly to build, and will need government involvement.&nbsp; Apart from local demands for compensation for submerged land, there are also concerns about the greater ecological impact of reservoir projects. Studies have shown that rampant dam construction leads to a decline in aquatic life, and livelihoods of people downstream.&nbsp; The other challenge is increasing risk of climate change-induced disasters like cloudbursts and Glacial Lake Outburst Floods that can wipe out expensive dams like the Chungthang Dam disaster in Sikkim in October.  <figure> <img src="https://publisher-publish.s3.eu-central-1.amazonaws.com/pb-nepalitimes/swp/asv65r/media/20231228101244_bf6f78d0758247f46bc156e116aacde6e20b6a02a7fa82057181914e4955f09a.jpg" data-media-id="editor_4" data-image-id="20231228101244_bf6f78d0758247f46bc156e116aacde6e20b6a02a7fa82057181914e4955f09a" data-rendition-name="original" width="1700" height="900" loading="lazy" alt="Hydropoer and dams in Nepal"> <figcaption>This underground powerhouse (centre) will give installed capacity of 140MW and an annual energy generation of 587.7GWh. Photos: SONIA AWALE</figcaption> </figure>  Nepal’s own Kulekhani was supposed to have a lifespan of 100 years but a cloudburst in the catchment area in 1993 deposited so much debris into the lake that the cascade power plants that generate 106MW of electricity from it will now function only for another 30 years.&nbsp; Shilpakar who was also involved in the Kulekhani project says lessons have been learnt, and Tanahu will have a flushing gate to drain sediment from the reservoir. It is considered too far downstream to be at risk from glacial lake bursts. &nbsp;The dam is also built to withstand earthquakes of much higher intensity than the 2015 event.&nbsp; “Tanahu is a concrete gravity dam with a much larger catchment than Kulekhani,” he explains. “But rainfall patterns have changed drastically. So we have added two flushing gates, increasing the dam’s lifespan to 120 years.” Despite the downside, most experts agree that reservoirs are crucial for flood control and dry season irrigation downstream, especially as water supply becomes scarcer with the climate crisis. Reservoirs also have other benefits like fisheries, inland navigation and tourism, as seen in Kulekhani. “In many ways, reservoirs are not just clean energy projects but also climate adaptive initiatives,” says Pushkar Manandhar of the ADB. “Storage hydropower serves as a buffer to cope with erratic rainfall and act as a shock absorber. They store water to augment lean season flow of rivers.” But water is a <a href="https://nepalitimes.com/here-now/the-geopolitics-of-nepal-s-water-and-electricity">geopolitical hot potato in the region</a> with India’s increased involvement in building river schemes in Nepal, including Pancheswar Dam on the border Mahakali River, Arun III, West Seti reservoir, and other projects. Experts say India’s real interest is in water supply, and would not mind if it gets regulated water for free from reservoirs like Tanahu in Nepal.&nbsp;  <figure> <img src="https://publisher-publish.s3.eu-central-1.amazonaws.com/pb-nepalitimes/swp/asv65r/media/20231228101240_f5a3473abe0186d1fb7842724607238abd3c8671c91c8e8a4bfebfbc63591aa4.jpg" data-media-id="editor_6" data-image-id="20231228101240_f5a3473abe0186d1fb7842724607238abd3c8671c91c8e8a4bfebfbc63591aa4" data-rendition-name="original" width="1500" height="1125" loading="lazy" alt="Hydropoer and dams in Nepal NT 1"> <figcaption>Tanahu hydropower dam site.</figcaption> </figure>  But India is playing hardball by refusing to buy electricity from projects it deems to have Chinese investment or involvement. In Tanahu, meanwhile, engineers are running out of explosives because of a ban on export of dynamite by India.&nbsp; Says Shilpakar: “No contractor is getting an explosive permit from India and we cannot get any from the Chinese either, we need the government-to-government deals otherwise the project could be delayed.” Tanahu also includes the construction of a 220kV double circuit Damauli-Bharatpur transmission line and is looking at a completion date of May 2026. There are also plans for a 126MW Lower Seti cascade project with a dam at Saranghat, and a powerhouse at Mugling to generate 520GWh. Experts say that along with new reservoir projects, Nepal now needs to <a href="https://nepalitimes.com/news/balance-of-power">pay attention to transmission and distribution</a> to streamline supply so that domestic consumption increases. &nbsp; “We didn’t develop all aspects of hydro schemes in parallel,” says ADB’s Manandhar. “We focused mostly on generation and now there is a real bottleneck in transmission and distribution.” Kathmandu is a load centre, but transmission lines do not have the capacity to bring the electricity from power plants in central and eastern Nepal.&nbsp; “We have to build substations to future-proof supply, but there are issues with right of way and land acquisition,” Manandhar adds.&nbsp; Which is why NEA is working at speed to upgrade its substation in Siuchatar, with a state-of-the-art Distribution System Control and Data Centre so that power supply to localities in the Valley can be monitored and controlled more efficiently.&nbsp;  <figure> <img src="https://publisher-publish.s3.eu-central-1.amazonaws.com/pb-nepalitimes/swp/asv65r/media/20231228101248_dae5f9c304943d4efb156a9930b0ca1894b2f6b915abeb6c30d510e0f246e4a5.jpg" data-media-id="editor_8" data-image-id="20231228101248_dae5f9c304943d4efb156a9930b0ca1894b2f6b915abeb6c30d510e0f246e4a5" data-rendition-name="original" width="1500" height="1125" loading="lazy" alt="Distribution substations"> <figcaption>Distribution System Control and Data Centre in Siuchatar.</figcaption> </figure>   <figure> <img src="https://publisher-publish.s3.eu-central-1.amazonaws.com/pb-nepalitimes/swp/asv65r/media/20231228101252_fb9c41952a2c918b2a8eccbd5483bcd28378e43eb533d3edfcd2c2b82a495255.jpg" data-media-id="editor_9" data-image-id="20231228101252_fb9c41952a2c918b2a8eccbd5483bcd28378e43eb533d3edfcd2c2b82a495255" data-rendition-name="original" width="1500" height="1125" loading="lazy" alt="Transmission lines"> </figure>  “If there is a fault in distribution, we will be able to see it from here, we won’t need locals to call us anymore,” says electrical engineer Dhirendra Bajgain. “At the same time, we will be able to quickly restore the fault, in minutes instead of hours by just isolating that area.” But elsewhere, like in the Dana substation near Kushma of Parbat district, authorities are dealing with a different kind of <a href="https://nepalitimes.com/here-now/nepal-s-precious-electricity-going-waste">power spill</a>. Pritam Raj Bista of the Parbat Distribution Centre says that while there is 100% electrification, the total number of consumers is decreasing due to depopulation.&nbsp; In contrast, nearly 170km south in Dhakdahi near Butwal, demand is peaking with local industries complaining about not getting dedicated feeder lines on time. Even when Nepal did away with power rationing, the area was still facing power cuts until Dhakdahi substation was set up a few years ago. The new substation shared the power load with the Butwal substation and the area has been getting improved voltage and power quality.&nbsp; At the recently inaugurated Kushma-New Butwal 220kV substation to evacuate power from the Kali Gandaki Transmission Corridor, the NEA’s Kulman Ghising said his main priority now was to invest in transmission and distribution infrastructure. “Butwal is critical because it is at the intersection of the Kali Gandaki corridor in central Nepal and the East-West transmission artery,” Ghising said. “It is a pooling hub for power transmission and distribution westwards and for export to India.”  <figure> <img src="https://publisher-publish.s3.eu-central-1.amazonaws.com/pb-nepalitimes/swp/asv65r/media/20231228101248_635bc1ff0aec0f15a1874a56b81d61113abcd8f5d2ded97271c5c90f20ecd643.jpg" data-media-id="editor_11" data-image-id="20231228101248_635bc1ff0aec0f15a1874a56b81d61113abcd8f5d2ded97271c5c90f20ecd643" data-rendition-name="original" width="1220" height="1500" loading="lazy" alt="Transmission lines"> <figcaption>Transmission lines at the recently inaugurated Kushma-New Butwal 220kV substation which will evaculate power from the Kali Gandaki Transmission Corridor. </figcaption> </figure>  Indeed, these transmission lines will dovetail with t<a href="https://nepalitimes.com/editorial/challenge-of-the-millennium">he Millennium Challenge Compact</a> (MCC)-supported lines from Hetauda via Damauli. The challenge now, Ghising says, is local compensation demands to transmission lines which have delayed them.&nbsp; “Our field staff spend 90% of their time dealing with local opposition, social and environmental regulations,” he added. Transmission lines under the MCC project are likely to face even stronger opposition because of <a href="https://nepalitimes.com/editorial/the-message-is-the-medium-z5w3ekk2">political opposition to the US-funded initiative</a>, and local belief that the project has lots of money.&nbsp; If Nepal is to save its economy and meet net-zero targets by 2045, increasing domestic demand should be the priority, and for this, reservoir projects, transmission lines and distribution infrastructure are key.&nbsp;  <figure> <img src="https://publisher-publish.s3.eu-central-1.amazonaws.com/pb-nepalitimes/swp/asv65r/media/20231228101248_985e74ee96fef5c92a828612ff7c97a05ba34a61c490a5e578f3c592af986584.jpg" data-media-id="editor_14" data-image-id="20231228101248_985e74ee96fef5c92a828612ff7c97a05ba34a61c490a5e578f3c592af986584" data-rendition-name="original" width="1500" height="1125" loading="lazy" alt="Transmission lines"> </figure>  Nepal could export more electricity but India is buying less than 700MW from Nepal because of <a href="https://nepalitimes.com/here-now/geopolitics-of-nepal-s-rivers">Chinese involvement in projects</a>. It is therefore in Nepal’s own strategic interest to increase domestic demand as much as possible.&nbsp; Even if Nepal could sell all its present electricity generation, it would amount to a mere Rs20 billion against an annual trade deficit with India at a staggering Rs840 billion. &nbsp; Instead, if <a href="https://nepalitimes.com/here-now/fueling-nepal-s-economic-crisis">we reduce just 10% of our petroleum bill</a> by electrifying industries, household use and transport, Nepal can save at least Rs30 billion a year. Improving public health and ecology will be a bonus.&nbsp; “If we sell electricity, we just get cash benefits but if we were to make the maximum use of our power within the country, there will be cascade impacts,” says engineer Raja Bhai Shilpakar. “We can revolutionise our industries and manufacturing, create jobs and prevent young talented people from migrating.” &nbsp;

Sonia Awale

Missing pieces of the hydropower jigsaw

Since the 1950’s Nepalis have dreamt of developing the country’s enormous hydropower potential for industrialisation and export to India.&nbsp; Nepal chose to avoid the path followed by Bhutan of handing over design, financing, and construction of hydropower to India. Policy makers tried instead to maintain control by soliciting assistance from bilateral donors and multilateral development banks to finance power projects using grants and concessionary loans.&nbsp; But as the size of investments increased, it resulted in greater reliance on international aid and technical assistance. Projects were typically designed by global consultants and constructed by international contractors through competitive bidding and once completed were handed over by the government to Nepal Electricity Authority (NEA) to own and operate.&nbsp; By the 1980’s a flaw in this approach had become clear: it had created another kind of dependence and loss of control. The electricity produced was expensive since these projects, although funded through grants or loans on concessionary terms, were transferred to NEA’s books at the full cost of the assets which needed to produce returns.&nbsp; A more debilitating effect was that almost no technical or financing capacity was transferred to NEA for the next power plant without more aid. As international assistance was always in short supply, Nepal’s hydropower development proceeded slowly and the electrification rate lagged at 15% in 2000. There was little prospect for exporting power since it was so expensive, and there was chronic domestic shortage.&nbsp; In his book What Went Right: Sustainability versus Dependence in Nepal’s Hydropower Development, Mark Liechty who is professor of anthropology and history at the University of Illinois at Chicago skillfully narrates the inspirational story of Nepal’s alternative hydropower development. &nbsp; At centre are Norwegian missionary <a href="https://archive.nepalitimes.com/blogs/kundadixit/2009/11/19/norwegian-guru/">Odd Hoftun</a> and his colleagues, who over the course of five decades, did not just build power projects but laid the foundation for a vibrant domestic energy sector with thousands of competent Nepali engineers and technicians, hundreds of independent power producers, and dozens of construction companies, equipment manufacturers and engineering consultancy firms.&nbsp; This book should be required reading for development practitioners and aid agencies interested in critically examining how to get the best returns from international development assistance. Liechty recalls the strategy to develop hydropower that was quietly taking shape in Butwal in parallel with the Kathmandu-centeric public sector-led model funded by the county’s major donors. The ‘Butwal Model’ emphasised vocational training and learning opportunities in the manufacture of components and by building actual power plants.&nbsp; Training of skilled manpower was born out of necessity in a region of the country with no industrial base, very few schools, and certainly none that imparted specialised technical skills required for hydropower development. The second element was the formation of local private companies to design, construct, and operate hydropower projects initially to electrify the training institute and supply nearby urban and rural communities, and eventually to feed surplus power to the NEA grid as the Butwal companies constructed larger power plants.&nbsp; As the companies grew in size and sophistication, they attracted increasing numbers of Nepali engineers, trained at universities and technical colleges in India and Kathmandu, who sought more a challenging professional work environment than at NEA. International experts from over a dozen countries, worked as volunteers alongside Nepalis training technicians, managers and entrepreneurs on the job.&nbsp; The training was as important as the construction of hydropower plants. The power projects were also initially funded with international aid, <a href="https://nepalitimes.com/review/norway-nepal-a-love-story">mainly from the Norwegians</a>, but it was sympathetic to the vision of using project design and construction as an opportunity to build lasting human capacity in Nepal.&nbsp; Hoftun came to Nepal as a Norwegian Christian missionary and was primarily responsible for conceiving and initiating the Butwal hydropower development model. His development philosophy grew organically as a series of practical steps required to meet needs, rather than as a fully thought through answer from the beginning. <a href="https://nepalitimes.com/news/odd-hoftun-missionary-engineer">Hoftun died aged 95</a> earlier this year. Hoftun believed in frugal use of resources, a framework of moral business practices, and a belief that private companies working under ethical principles were the most efficient vehicles for Nepal’s economic development. That philosophy resonated with Hoftun’s Nepali colleagues such as Balaram Pradhan, who may not have shared his religious faith, but found strong overlap with their own commitment to national development.&nbsp; Hoftun first came to Nepal in 1958 to build Tansen Mission Hospital, the only modern medical facility at the time in the region. He had to train masons, carpenters and electricians realising on completion that he had also developed a cadre of technicians.&nbsp; He established the Butwal Technical Institute (BTI) 40km south of Tansen to provide on-the-job training to Nepali teenagers in metal welding, carpentry and electrical vocational skills. Requiring a reliable power source for BTI he invited the skilled workers trained in Tansen to construct, in stages, the 1 MW <a href="https://nepalitimes.com/review/norway-nepal-a-love-story">Tinau project</a> starting in 1965, with the first 50 kW completed in 1970 and the final stage in 1978.&nbsp; The <a href="https://archive.nepalitimes.com/news.php?id=14224#.ZBMygi8RqLc">Butwal Power Company (BPC)</a> was formed in 1965 as an electrical utility to oversee construction as well as to operate the power plant and supply power to BTI along with the residents and small-scale industries of Butwal. This virtuous cycle of building ever larger &nbsp;hydropower projects and training more people went on for 30 years, with the 5MW <a href="https://nepalitimes.com/review/norway-nepal-a-love-story">Andhi Khola</a> (1990) and the 12MW Jhimruk (1994).&nbsp; <a href="https://archive.nepalitimes.com/article/nepali-times-buzz/power-for-nepal-review,2884">Hoftun’s approach</a> of starting with labour intensive technique to dig tunnels and utilising refurbished second-hand hydropower equipment from Norway resulted in Tinau and Andhi Khola being built at a fraction of the cost of power plants being constructed for NEA. Hundred percent construction by Nepali companies meant that even the Jhimruk power plant which used mechanized drilling and all new electro-mechanical equipment was completed at around one third the per MW cost of larger NEA-owned projects.&nbsp; This alternative model came with challenges. Liechty details conflict Hoftun faced with fellow missionaries who believed their commitment was to serve the poor in Nepal through health and education rather than economic development through private companies. Working with government meant getting permissions every step of the way from bureaucrats who did not always Hoftun’s development philosophy.&nbsp; Liechty also documents how the model hits its limits when Hoftun attempted to mobilise financing for the <a href="https://archive.nepalitimes.com/news.php?id=16217">60MW Khimti</a> in partnership with international private companies, the World Bank and Asian Development Bank. As project size grew and international commercial financing was required, the Butwal model also obey diktat of donors. Khimti was eventually financed and constructed after meeting all the requirements of international lenders but at significantly higher cost, and in the process BPC’s ownership &nbsp;came down from an initially planned 50% to just 15%. &nbsp; I was one of the Nepali engineers that joined the Butwal effort after completing my overseas engineering degree and was able to see firsthand how Nepali companies and technicians were able to construct high quality hydropower projects at affordable costs.&nbsp; That experience moved me to form the Alliance for Energy in 1993 with other <a href="https://archive.nepalitimes.com/news.php?id=11082">likeminded activists</a> to oppose the construction of the <a href="https://archive.nepalitimes.com/news.php?id=1864">201MW Arun III</a> being planned by NEA using the conventional model with no prospect for increasing national capacity and reducing aid dependence.&nbsp; Our concern was that at a price tag of $1.1 billion the project was unaffordable for Nepal compared to viable alternatives. Arun III would cost ten times as much per MW as Andhi Khola. We were also concerned that it was overly risky for the country to develop a single, expensive mega project, at one end of the country. It would be wiser to support a dozen smaller projects throughout Nepal to generate the same amount of power, using the Butwal model and in the process augment in-country capacity.&nbsp; The World Bank and other funders withdrew their support to Arun III in 1995, accepting NEA could not satisfactorily meet its environmental, social and management responsibilities. The Alliance had proposed donor-financed alternatives, but even without them Nepal now has a vibrant and competitive hydropower sector with over two hundred <a href="http://www.ippan.org.np/ippan-members">Independent Power Producers</a> with financing from <a href="https://www.martinchautari.org.np/storage/files/sinhas-vol20-no2-lecture-bikash-pandey.pdf">dozens of Nepali banks</a>. Many of the leaders of these companies got their start in hydropower at BPC and its sister companies.&nbsp; Liechty’s book provides important documentation of what it takes to do good development in one of the world’s poorest countries – in contrast with conventional development assistance as practiced by international donors when they prioritise building infrastructure rather than building capacity.&nbsp; It may be slow but building domestic capacity is the only way for countries to develop sustainably. This book will hopefully inspire a new generation of activists, entrepreneurs, engineers, and economists to demand that development aid coming in their name be required to meet a higher bar.&nbsp;  <figure> <img src="https://publisher-publish.s3.eu-central-1.amazonaws.com/pb-nepalitimes/swp/asv65r/media/20231113051112_a219c653de5332dec6c53f816721fbb6380ff234297a967370bf6b788f83632d.jpg" data-media-id="editor_12" data-image-id="20231113051112_a219c653de5332dec6c53f816721fbb6380ff234297a967370bf6b788f83632d" data-rendition-name="original" width="476" height="532" loading="lazy" alt="What went right book review"> </figure>

Bikash Pandey

Small is bountiful

Nepali hydropower industry is poised to play a bigger role in Nepal’s energy transition to meet its 2045 net zero target. Nepal Hydropower Association (NHA) last month hosted a ‘Made in Nepal’ booth at the Hydro23 conference in Edinburgh which was attended by 1,000 delegates from 70 countries. There were over 30 delegates from Nepal. The Nepal booth showcased and promoted Nepali hydropower expertise, experience and its ability to offer a diverse range of services across the whole hydropower value chain in emerging markets for projects up to 100MW. This was a show of Nepal’s new confidence in the experience its technicians and engineers have gained in the past decades. With its natural geographical advantage, Nepal actually has over 100 years of experience in hydro-electricity, with <a href="https://nepalitimes.com/here-now/nepal-s-1st-hydroelectric-plant-is-a-museum-piece">Pharping being only the second hydropower plant in Asia</a> when it was built in 1911. In his new book What Went Right: Sustainability versus Dependence in Nepal's Hydropower Development, US professor Mark Liechty explains why Nepal’s hydropower sector has been such a success among the many development models that Nepal’s donors experimented with over the last seven decades. Liechty traces the history of indigenous capacity in Nepal’s hydropower with capital financing, tender bid process, EIA, engineering consulting, construction, generation, maintenance, transmission to distribution. Nepalis also gained experience in project management and delivery along with increased sophistication of the local high precision machining and tunnelling expertise in the challenging Himalayan geology and climate. Nepal’s Ambassador to the UK Gyan Chandra Acharya said: “Nepal’s hydro industry has a unique position and readiness to contribute to reducing greenhouse gas in South Asia and beyond. This global interaction can only be mutually beneficial.” There are now 130 hydroelectric plants in Nepal delivering nearly 3,000MW, with another 240 plants under construction. Such an experience and a steep learning curve in a short development period has meant that the sector has proven that it can build hydro projects at speed and at a competitive price globally. Evidence of this is the trend towards Chinese contractors outsourcing some of their hydro engineering design work to Nepali engineering consultancies. The output and competitive consulting fees proves that Nepal’s engineering design is ready to do business globally. Nepal’s Energy Secretary Dinesh Ghimire told the Edinburgh gathering: “Made in Nepal can be a platform to share Nepal’s successes and tell the world that we are ready to do business by selling its hydropower building expertise.” Hydro Consult Engineering, a company with 30 years experience in Nepal promoted its services and capabilities in Edinburgh. It has completed projects in Pakistan, and two small new plants are in the pipeline in Kenya and Uganda. Hydro’s CEO Manohar Shrestha said: “We are excited with our international projects. They are challenging, but we are confident that these projects are a growth and learning opportunities for us.”  <figure> <img src="https://publisher-publish.s3.eu-central-1.amazonaws.com/pb-nepalitimes/swp/asv65r/media/20231106141148_586f173e596cfd0fd49f3822431958a9fea0fe59293a3fa431b1d357e452e27a.jpg" data-media-id="editor_1" data-image-id="20231106141148_586f173e596cfd0fd49f3822431958a9fea0fe59293a3fa431b1d357e452e27a" data-rendition-name="original" width="1600" height="1066" loading="lazy" alt="Hydro 2023"> <figcaption>Nepal Hydropower Association at Hydro23 conference in Edinburgh.</figcaption> </figure>  Conference organiser Alison Bartle publisher of the journal Hydropower and Dams said that the world is becoming aware of Nepal’s speed of advancement within the sector despite its geological and geopolitical challenges. “Nepal is fast becoming a hydro hub in the region,” she added. “We are especially happy that Nepal is cultivating cross border partnerships and exploring electricity trade with India and Bangladesh. It is a game changer.” Delegates said the next steps were for NHA and the Ministry of Energy, Water Resources and Irrigation to support the industry’s growth, and project Nepal was a model for successful energy transition at climate summits including at the COP 28 in Dubai this month.

Nepal's hydropower goes international

Probably the best thing to happen to Nepal’s economy lately is India’s refusal to buy more electricity. It could eventually force the government to <a href="https://www.nepalitimes.com/editorial/challenge-of-the-millennium">expedite transmission infrastructure</a> and increase domestic demand. Nepal Electricity Authority (NEA) is losing billions in <a href="https://www.nepalitimes.com/here-now/nepal-s-precious-electricity-going-waste">spilled power </a>this monsoon because it cannot evacuate power. Some private producers have actually stopped generating altogether. Installed hydropower capacity is touching 3,000MW this monsoon, and projects for a further 3,300MW are under construction. But domestic consumption is stuck at 1,700MW. Nepal could export electricity, but India has agreed to buy only 452MW from projects with <a href="https://www.nepalitimes.com/here-now/geopolitics-of-nepal-s-rivers">no Chinese involvement</a>. Even if the full quota was exported, Nepal would only earn NPR20 billion, whereas the trade deficit with India is at NPR840 billion and growing. In fact, Nepal imported NPR20 billion worth of power from India last year to cover its dry season deficit.&nbsp; “At the current rate, if we do not put up transmission lines in time, by 2025 we will be losing electricity worth 120 million every day in winter and Rs170 million during the monsoon,” warned Kathmandu University engineering professor Bishal Silwal at at a recent seminar.&nbsp; NEA blames delays in substations and transmission lines on <a href="https://archive.nepalitimes.com/article/nation/high-tension-in-sindhuli,1297">locals blocking construction</a>. Kathmandu Valley therefore faces frequent power outages due to tripping even there is enough power in the grid. “The problem right now is not of supply but infrastructure,” former NEA head Hitendra Shakya explained at the seminar. “It is a result of poor planning.”&nbsp; There is also lack of coordination between various agencies of government to encourage domestic consumption with tax rebates for industries, battery-powered vehicles and household appliances. An average Nepali consumes 325kWh of electricity, much lower than the global per capita of 3,180kWh. Former energy secretary Dwarika Nath Dhungel, who is the author of a new compendium on the political economy of hydropower, says: “Exporting electricity should be the last thing on our list. We might be generating surplus but we still import power from India during winter, let’s first try to use the surplus to replace that import.”  <figure> <img src="https://publisher-publish.s3.eu-central-1.amazonaws.com/pb-nepalitimes/swp/asv65r/media/20230825050844_432c12cd7043c2c38c9ef9dab2df1d12416c734c0f8dc4e46af5f14a6419e30f.jpg" data-media-id="editor_4" data-image-id="20230825050844_432c12cd7043c2c38c9ef9dab2df1d12416c734c0f8dc4e46af5f14a6419e30f" data-rendition-name="original" width="3000" height="3073" loading="lazy" alt="Page 1"> <figcaption>Photo: BIKRAM RAI/NEPALI TIMES ARCHIVE</figcaption> </figure>  Indeed, while some 95% of Nepal’s population is said to have access to electricity, districts like Bajhang, Dolpa, Bajura, Jumla and Mugu are not yet connected to the grid. Nepal’s wetter eastern half has most of the hydropower generation capacity, while the more arid west does not have enough. Surplus power could also jumpstart Nepal’s struggling industries, the tourism sector and agriculture. This in turn would create jobs so Nepalis are not <a href="https://www.nepalitimes.com/news/nepalis-in-the-russian-army-want-to-quit">forced to migrate abroad</a>. “Hydroelectricity should be a crucial element of our national development strategy so we make its maximum use domestically and for employment. Only then should we be exporting power,” says Dhungel. NEA can earn more from selling power domestically. Private industries are paying up to NPR11 per unit whereas the average price of electricity sold to India is just NPR4.33 per unit. <a href="https://www.nepalitimes.com/opinion/comment/securing-nepal-s-electric-future">Using electricity</a> to slash Nepal’s petroleum import bill by just 10% would save the country at least NPR30 billion a year, and be a faster way to decrease the trade deficit with India. Improving public health by cutting pollution would be a bonus. Nepal’s <a href="https://www.nepalitimes.com/news/nepal-india-power-play">balance of power with its two neighbours</a> is also getting skewed with a tilt towards India, as New Delhi leans on politicians here to systematically cancel Chinese investments in hydropower. Experts say India’s real interest is in regulating Nepal’s rivers to ensure future water supply rather than electricity. “Politicians spout non-stop nonsense about how they will make the country rich by exporting electricity when water is our strategic commodity,” says Dhungel. “They are trading our water resources to stay in power by keeping a certain neighbour happy. One has to wonder if Singha Darbar is making decisions or the Delhi Darbar.” Successive governments of K P Oli, Sher Bahadur Deuba and now Pushpa Kamala Dahal have all awarded one hydropower project after another to Indian state companies which are now building projects that will generate a combined total of 4,000MW. More Indian projects are in the pipeline. With the rise of China and India as global players and the new Sino-US cold war, <a href="https://www.nepalitimes.com/here-now/the-geopolitics-of-nepal-s-water-and-electricity">Nepal has become a geo-strategic hotspot</a>. But it is now also a climate hotspot, and shrinking glaciers will affect electricity generation and the hydrology of Himalayan rivers.&nbsp; Dwarika Nath Dhungel sums it up: “We can’t change our neighbours but we can understand their aspirations better so that we have leverage when dealing with them. But first, we have to become stronger by making the best use of our own resources domestically.”

Balance of Power

Tipper trucks piled with cement rumble along the rocky 15km road that runs alongside the Trisuli River that flows out of glaciers in Tibet and tumbles through mighty gorges into Nepal. &nbsp; It is the steep gradient of this frothing river that makes it so ideal to generate hydropower. Which is why there are eight existing or planned run-of-the-river schemes in a cascade along the Bhote Kosi. The narrow valley reverberates with the roar of excavators, drills and a mix of Korean, Chinese and Nepali voices among the workers in the newest plant under construction on the river: the Rs65 billion 216MW Upper Trisuli-1 hydropower project. Despite its proximity to Kathmandu, Rasuwa had largely been bypassed in Nepal’s infrastructure development. Even after India helped build the Trisuli (1967) and Devighat (1984) plants, investment here languished. But after 1990, politicians started promising that the district would prosper from the ‘white gold’ of the Bhote Kosi, there would be jobs, industries and money would pour into the local economy.&nbsp; The biggest and newest of these projects is the Upper Trisuli-1 and it was sold to the indigenous Tamang community as their economic salvation. But far from jobs and economic benefits, local farmers have seen the destruction of their ancestral land and sacred sites.&nbsp; Read also: <a href="https://www.nepalitimes.com/here-now/geopolitics-of-nepal-s-rivers">Geopolitics of Nepal’s rivers</a>, Ramesh Kumar  <figure> <img src="https://publisher-publish.s3.eu-central-1.amazonaws.com/pb-nepalitimes/swp/asv65r/media/2023061915060_50d23587983b4e48dee2b5a387824cd152192d41f5ffbc5ec4ec62ffd973ce20.jpg" data-media-id="editor_1" data-image-id="2023061915060_50d23587983b4e48dee2b5a387824cd152192d41f5ffbc5ec4ec62ffd973ce20" data-rendition-name="original" width="2976" height="1984" loading="lazy" alt="Rasuwa NT 1"> </figure>  “We had hoped that this project would finally bring us resources for local development that we sorely needed, but it has only made our lives more difficult,” says Ashabir Tamang from Mailungbesi village by the Bhote Kosi. A decade has passed since the Nepal Water and Energy Development Company (NWEDC) began exploring the Upper Trisuli-1 project in Mailungbesi. Financing was secured from Korea (75%), the International Finance Corporation (IFC) with 15% and 10% from the local Nepali partner Bkesh Pradhanang. Asian Development Bank, Asian Infrastructure Investment Bank, Dutch Development Bank and other international banks also have investments. During the project design phase the IFC, which is also the primary loan manager for the project, had stipulated that its PS-7 performance criteria be applied to the project. The stipulation seeks to ensure that business activities minimise negative impacts, foster respect for human rights, dignity and culture of indigenous populations, and promote development benefits in culturally appropriate ways. The NWEDC was therefore forced to enter into an FPIC agreement (Free, Prior and Open Consent) with the indigenous Tamang community. Nepal became a signatory to the ILO Convention 169 in 2007, which gave local and indigenous communities the right to have a say in benefits. This agreement between the NWEDC and the Indigenous Advisory Council that represents the local community, and the local government stated that about Rs140 million would be spent on sustainable socio-cultural and economic development projects in five years. Read also:<a href="https://www.nepalitimes.com/news/nepal-india-power-play"> Nepal-India power play</a>, Ramesh Kumar  <figure> <img src="https://publisher-publish.s3.eu-central-1.amazonaws.com/pb-nepalitimes/swp/asv65r/media/2023061915060_6bf538032acd41023e2277af852adaee745be79e59f4d32261ff02d3ede9bddf.jpg" data-media-id="editor_3" data-image-id="2023061915060_6bf538032acd41023e2277af852adaee745be79e59f4d32261ff02d3ede9bddf" data-rendition-name="original" width="2976" height="1984" loading="lazy" alt="Rasuwa NT 1"> </figure>  Although it required that the consent of local communities would be needed before land acquisition and resource management began, the request was made only when the project reached the implementation stage. Says Ashabir Tamang, who is also vice-chair of the Indigenous Advisory Council: “The funding for indigenous development projects that we agreed on has not yet been released, the company is violating the contract and cheating us.” NWEDC Director Giriraj Adhikari admits the company is yet to release the funds as per the agreement, but adds that the company needs to adhere to the financial protocols of international partners involved in the project. "Funds have already been allocated for local welfare, but procedural issues have meant that they have yet to be sent to Nepal from overseas,” he says. Upper Trisuli-1 is the first infrastructure project in Nepal to try to implement an FPIC agreement to increase self-employment for local communities and minimise adverse environmental effects. However, local activists say the agreement applies to only 10 out of 21 areas in the project site, and does not include outlying communities and it disregards their customs and institutions. Residents also have complaints about lack of compensation for damage to property during construction-related demolition and river diversion. &nbsp;On top of that, forests, rivers, wetlands and traditional grazing areas locals have used for generations are located in areas surrounding the intake and powerhouse.&nbsp; Read also: <a href="https://www.nepalitimes.com/here-now/the-geopolitics-of-nepal-s-water-and-electricity">The geopolitics of Nepal’s water and electricity</a>, Ramesh Kumar  <figure> <img src="https://publisher-publish.s3.eu-central-1.amazonaws.com/pb-nepalitimes/swp/asv65r/media/2023061915060_dbbc8e1be28bb2dfe2b3886ee3a4b3a69c4126e21c8703ef62477a8808c3984f.jpg" data-media-id="editor_5" data-image-id="2023061915060_dbbc8e1be28bb2dfe2b3886ee3a4b3a69c4126e21c8703ef62477a8808c3984f" data-rendition-name="original" width="1500" height="1000" loading="lazy" alt="Rasuwa NT 1"> </figure>  Ashabir Tamang's gripe is that the project has not fulfilled a single obligation to local residents and has essentially bypassed the community on whose land the project is being built. “With the monsoon soon coming, we live in constant fear that landslides will wipe out our entire village,” says Tamang. “Where do we go to complain? No one listens to us.”&nbsp; The memory and fear of landslide is real and fresh. Mailingbesi’s 60 households were nearly entirely buried in the 2015 earthquake, and 20 residents lost their lives. Among those killed were nine members of Ashabir Tamang’s own family, including his young grandchildren. There are 790 other households in surrounding villages that were also impacted by the earthquakes. Many of them never received the promised government grant to rebuild.&nbsp; Eight years after the earthquake, many homes are still buried in debris. The boulders and soil have still not been cleared. Only half of Mailungbesi’s population remains in the village, while the rest have moved on to other villages in Rasuwa and Nuwakot.&nbsp; Those that remain face a host of problems, including where to send their children to school, the nearest primary school is a half-hour walk away in Salletar. Parents wait in fear, hoping their children will not be hit by rockfalls on their way to and from school. Read also: <a href="https://www.nepalitimes.com/here-now/nepal-s-precious-electricity-going-waste">Nepal’s precious electricity going waste</a>, Anita Bhetwal  <figure> <img src="https://publisher-publish.s3.eu-central-1.amazonaws.com/pb-nepalitimes/swp/asv65r/media/2023061915060_977d7508a26d0ccbc3d8bcf633b67a9cd09ab0081f57d89f8662836d801196be.jpg" data-media-id="editor_7" data-image-id="2023061915060_977d7508a26d0ccbc3d8bcf633b67a9cd09ab0081f57d89f8662836d801196be" data-rendition-name="original" width="2976" height="1984" loading="lazy" alt="Rasuwa NT 1"> </figure>  “It is like waiting for another disaster to strike,” says Som Bahadur Tamang, another resident. Project-related demolition work, tunnel construction as well as the constant movement of heavy earthmoving vehicles have destabilised the slopes, the ground shakes constantly, and rocks frequently fall from the cliffs above. Kanchhi Maya Tamang tells us of her fears. She says, “I do not worry so much during the day, but I lie awake at night wondering if the river will sweep away our house with us inside or a landslide will bury us alive.”&nbsp; Inaam Tamang rebuilt his house with concrete after the earthquake, but says cracks have appeared and one of the rooms was carried away by the river when the project diverted the river. “No one listened to us when we asked that walls be built around our homes to protect us,” he says. “They do not care about us small people.”&nbsp; Read also: <a href="https://www.nepalitimes.com/opinion/comment/securing-nepal-s-electric-future">Securing Nepal’s electric future</a>, Kumar Pandey  <figure> <img src="https://publisher-publish.s3.eu-central-1.amazonaws.com/pb-nepalitimes/swp/asv65r/media/2023061915060_4a0d1555b13f97199910a8d23b8f4379fdefd44c9f39cb102eb6e3d989d2ddef.jpg" data-media-id="editor_9" data-image-id="2023061915060_4a0d1555b13f97199910a8d23b8f4379fdefd44c9f39cb102eb6e3d989d2ddef" data-rendition-name="original" width="2976" height="1984" loading="lazy" alt="Rasuwa NT 1"> </figure>  Down in Hakubesi and Phulbari, 110 households were displaced by the project and only got partial compensation. Locals are also angry that while there are able-bodied men looking for jobs in the villages, the project is bringing in drivers and construction workers from outside. &nbsp; Kanchhi Maya Tamang, 55, was hired as a cleaner, but sacked for being too old. “Do you think someone who has carried fodder and firewood from the mountains all her life is not strong enough to sweep the floor?” she asks.&nbsp; Saraswati Tamang, who owns a grocery store in Mailungbesi, says she has not seen the expected boom in business after the project got going. This despite there being 800 Nepali, Chinese, and Korean technicians living in the area. “They bring everything from Kathmandu,” she says. “Not just groceries, even live chicken, ducks, goats and pigs. We have not gained much, we were just uprooted.”&nbsp; Director Adhikari refutes allegations that locals were not given jobs, and says 900 residents were hired and given project-related contracts. But &nbsp;admits that even though the company is taking initiatives to ensure benefits to the local economy, not all demands can be met.&nbsp; Read also: <a href="https://www.nepalitimes.com/multimedia/nepal-s-first-hydropower-from-a-glacial-lake">Nepal’s first hydropower from a glacial lake</a>, Kunda Dixit

Nepal’s curse of the white gold

At the annual Nepal Power Summit in Kathmandu on 18-19 April, officials called on India to allow Nepal to export power at real-time prices, not just in the day-ahead market. Also discussed was a need for more flexible guidelines on market access for Nepal’s electricity to India which currently buys power on a project-to-project basis, pointedly boycotting those built by Chinese investment or contractors. India’s interest in regulating Nepal’s rivers is not new, but with the Himalaya becoming a geopolitical and climate hotspot, its strategic interest in regulating river flow has grown.&nbsp; Climate models show that the hydrology of Himalayan rivers will change dramatically in the coming decades, with peak water in the 2030s, and low flow levels in the dry season thereafter. With 70% of the annual discharge on the Ganga flowing down from rivers in Nepal, 75% of it in the four monsoon months, storage projects in the mountains will be ever more important. Because of this, New Delhi would like pliant politicians in place in Kathmandu that will not obstruct its plans to ensure future water supply, and given current geopolitical tensions, this also means keeping the Chinese out.&nbsp; Ever since Sher Bahadur Deuba became prime minister for the fifth time in 2021, he has fast-tracked a slew of projects in which Indian companies are involved, including the West Seti reservoir project that has languished for 20 years mainly because of Indian objections to Australian and Chinese investment. Most recently, Indian National Hydroelectricity Power Corporation (NHPC) Limited is in talks to be awarded the 480MW Phukot Karnali Hydroelectric Project in Kalikot jointly with Nepal’s state-owned Vidyut Utpadan Company Limited with a share ratio of 51% to 49%. The project will likely be launched during Prime Minister Pushpa Kamal Dahal’s state visit to India in May. India’s NHPC has already been granted licenses for West Seti and Seti River-6 projects, and is also eyeing another 1,902MW megaproject on the Karnali.&nbsp;  <figure> <img src="https://publisher-publish.s3.eu-central-1.amazonaws.com/pb-nepalitimes/swp/asv65r/media/2023050603050_10fc6c82b0d995c39b388d8d8628365ea5e2299a1f4d474e2c2d5b7f01d37d83.jpg" data-media-id="editor_0" data-image-id="2023050603050_10fc6c82b0d995c39b388d8d8628365ea5e2299a1f4d474e2c2d5b7f01d37d83" data-rendition-name="original" width="3776" height="2424" loading="lazy" alt="West Seti"> <figcaption>Sushil Bhatta of Investment Board Nepal and Abhay Kumar Singh of India's NHPC, after signing an agreement to develop the 760MW West Seti and 460MW Seti River 6 projects in 2022.</figcaption> </figure>  In fact, across Nepal, Indian companies are building hydropower projects which will add a combined total of 4,000MW to the grid, three of which were rushed through only in the past year. Three more Indian projects are in the pipeline.&nbsp; Why the sudden renewed Indian interest in Nepal’s rivers? And what is the hurry? The answer lies in the need to plan for the decades ahead when water is going to be an even scarcer commodity in the Indo-Gangetic plains than it is now because of climate change, increased industrial, agricultural and household consumption. Energy analysts say that although India’s interest seems to be in renewable energy from hydropower to fulfil its decarbonisation commitments, exports of power from Nepal is only projected at $800 million in the next three years, which will only be a tiny percentage of the 1,600 billion kWh that India generated in the last fiscal year.&nbsp; And although power demand is expected to rise with rising incomes, industrialisation and increasingly intense summer heat waves in the plains, India’s long-term interest is in reservoir projects to store monsoon water in Nepal’s rivers to reduce monsoon flood risk and keep rivers flowing in the dry season. And New Delhi has not tried to hide its distaste for any Chinese involvement in these projects.&nbsp; Hydropower Investment and Development Company Nepal (HIDCL) in which the government is a majority shareholder informed the Investment Board Nepal in February that it was withdrawing from the export-oriented 762MW Tamor Hydropower project.&nbsp; CEO Arjun Kumar Gautam is upfront about why: “We cannot sell electricity generated with Chinese involvement in the Indian market.” Tamor was one of the two projects agreed upon during Chinese President Xi Jinping’s visit to Nepal in October 2019. Soon after, Investment Board Nepal (IBN) signed up China Construction to build the project after completing a feasibility study. The HIDCL now wants to null the agreement with the Chinese contractor and bring in a new contractor more amenable to the Indians. Meanwhile, India’s state-owned <a href="https://sjvn.nic.in/">Satluj Jal Vidyut Nigam</a>, which is involved in a cascade of projects on the adjoining Arun River to generate a total of 2,000MW, is said to be aggressively lobbying top Nepali officials to also build Tamor. Besides the 900MW Arun 3, Satluj was awarded the Lower Arun by the K P Oli-led government in 2021 without competitive bidding. Then in May 2022, the Sher Bahadur Deuba-led government suddenly awarded Arun 4 to Satluj (with a 51% share) during Indian Prime Minister Narendra Modi’s visit to Lumbini.&nbsp;  <figure> <img src="https://publisher-publish.s3.eu-central-1.amazonaws.com/pb-nepalitimes/swp/asv65r/media/20230506020556_4f38ffb96de37f17c662684914f0b65ab41adaaf98183a073273e88621de480b.jpg" data-media-id="editor_2" data-image-id="20230506020556_4f38ffb96de37f17c662684914f0b65ab41adaaf98183a073273e88621de480b" data-rendition-name="original" width="1000" height="666" loading="lazy" alt="Arun 4 agreement"> <figcaption>Indian Prime Minister Narendra Modi and then Prime Minister Sher Bahadur Deuba look on as Satluj Jal Vidyut Nigam's Nanda Lal Sharma and the NEA's Kulman Ghising exchange MoUs in May 2022 in Lumbini to build the 409MW Arun 4. Photo: RATNA SHRESTHA/RSS</figcaption> </figure>  But even though Satluj is said to be also interested in the 1,061MW Upper Arun, Kulman Ghising of the Nepal Electricity Authority (NEA) says it is building the project. "Upper Arun is our first priority, we are planning to start the construction of the access road," Ghising told us. Arun and Tamor are both in eastern Nepal (see map), but India is also interested in rivers in western Nepal because of the proximity of its main load centres as well as to augment the dry season flow of Nepal’s rivers that flow into the Ganga.&nbsp; There was some hue and cry last year after the Deuba-led government abruptly handed over the 750MW West Seti Dam and Seti River-6 projects to two Indian state-owned companies without competition or transparency. Experts pointed out that Nepal’s Public-Private Partnership and Investment Act 2075 states that there should be competitive bidding.&nbsp; The Seti saga is three decades long. After successive partnerships with Australian, Chinese and private Indian companies fell through, India’s state-owned NHPC finally took the lead. Since the terms of the deal are opaque, many experts question how beneficial the $1.6 billion project that involves building a high dam in the Doti district will be for Nepal.&nbsp; Indian state-owned companies appear to move faster than private Indian companies interested in river projects in Nepal. The GMR Group (Gandhi Mallikarjun Rao) obtained a permit to build the 900 MW Upper Karnali and a Project Development Agreement (PDA) was signed with the IBN in 2014 with plans to start construction in two years after securing funding. The government's latest decision to extend the deadline for the GMR by two years is being challenged in Nepal’s Supreme Court.&nbsp;  <figure> <img src="https://publisher-publish.s3.eu-central-1.amazonaws.com/pb-nepalitimes/swp/asv65r/media/2023050603054_0b5cc52ed5ece09ac54bf7fd42d663e156bd8a721203fecad4470d449722bfd9.jpg" data-media-id="editor_3" data-image-id="2023050603054_0b5cc52ed5ece09ac54bf7fd42d663e156bd8a721203fecad4470d449722bfd9" data-rendition-name="original" width="1083" height="834" loading="lazy" alt="Indian investment in hydropower in Nepal"> </figure>  Geopolitical games The export-oriented 456MW Upper Tamakosi project finally started production in June 2021 after much delay. But because a part of the Upper Tamkosi was built by the Sino Hydro of China, India refused to buy power from the project during the monsoon surplus last year – even though it was built with NEA investment.&nbsp; One international lender told Nepali Times: “Obtaining an Indian nod before building any big hydropower project in Nepal has now become a must.” Indian pressure manifests itself in its refusal to buy only 364MW of electricity which was recently increased to 452MW. This is the sum total of generation capacity with no direct Chinese involvement. Nepal also cannot sell its power to China as there are no trans-Himalayan transmission lines, and exporting to Bangladesh would need an Indian approval system without giving a free and open market to Nepali electricity, while also rejecting any Chinese involvement. India’s international electricity trade procedure issued in February 2021 prohibits the import of electricity from projects invested in third countries that do not have a bilateral agreement for cooperation in the energy sector. The fact that India does not have an energy cooperation agreement with China has therefore become an excuse, not just to blacklist projects in Nepal with Chinese investment, but even Chinese contractors. India has even stopped the supply of explosives for projects like the Tanahu and Upper Trisuli-1 Schemes being built by Chinese contractors.&nbsp; "Even though there is nothing in writing, India does not want any involvement of the Chinese in any capacity in Nepal's hydropower projects, they even have details of which country is the contractor and where are the machines being used from," explains Ganesh Karki of the Independent Power Producers Association Nepal (IPPAN). India first allowed imports of electricity only from the 24 MW Trisuli and 15 MW Devighat projects, both built by the Indian in the 1960s. But after Deuba signed an agreement on energy cooperation between the two countries in 2022, NEA was allowed to 364MW.&nbsp; Even so, Nepal must renew this export provision every year, which is a bureaucratic hassle. What this essentially means is that if Indian companies do not get licenses for new plants in Nepal, they may not renew the power-selling contract either. Nepali officials have been trying to convince the Indian side that it is in their own best interest if Nepal has a surplus in the coming years. Based on projections of generation capacity, NEA has sent a proposal to New Delhi to export an additional 600MW.&nbsp; The installed capacity of hydropower projects in Nepal has reached 2,400MW and is expected to cross 3,000MW after the completion of more projects this monsoon. Projects with a combined capacity of 3,200MW are under construction and will be completed in the next three years. On the demand side, the average domestic consumption at present is about 1,600MW and is expected to increase only to 2,000MW next year.  <figure> <img src="https://publisher-publish.s3.eu-central-1.amazonaws.com/pb-nepalitimes/swp/asv65r/media/2023050603054_1ba6d252b58558d3d1263b0f76e3abbfc1c9dd3c019f8d9d47bd8aa415651e3f.jpg" data-media-id="editor_4" data-image-id="2023050603054_1ba6d252b58558d3d1263b0f76e3abbfc1c9dd3c019f8d9d47bd8aa415651e3f" data-rendition-name="original" width="1171" height="834" loading="lazy" alt="Hydropower generation in Nepal"> </figure>  &nbsp; <div class="embed-block"><div class="flourish-embed flourish-chart" data-src="visualisation/13536204"><script src="https://public.flourish.studio/resources/embed.js"></script></div></div> &nbsp; <div class="embed-block"><div class="flourish-embed flourish-chart" data-src="visualisation/13535503"><script src="https://public.flourish.studio/resources/embed.js"></script></div></div> There are critics who say Nepal should not be exporting power to India at all since it will not make a big dent in the trade deficit, and the $85.8 million it earned last year is negligible compared to the $8.33 billion Nepal earned in remittances.&nbsp; They say the priority should be on increasing electricity consumption in cooking, transportation and industry. At present, 70% of Nepal’s energy is from biomass and only 5% is from electricity.&nbsp; Since most of the electricity in Nepal is from run-of-river schemes in which generation depends on the flow of water in rivers, Nepal will have to continue to import power from India during the peak winter months for the next three years. In the monsoon, though, generation is double of demand, but the Indian quota, inadequate transmission and low domestic demand mean much of this clean electricity is wasted.&nbsp; Dinesh Kumar Ghimire at the Energy Ministry says Nepal is looking to sign a 25-year export agreement with India. "We are preparing a draft for the agreement. If both sides are on board with it, there may be an agreement during the Prime Minister's visit to India.” Edging out China While India is awarded one hydropower project after another in Nepal, China is being edged out. Both Phukot Karnali and Tamor hydropower projects were supposed to be implemented under Beijing’s Belt Road Initiative (BRI) scheme.&nbsp; Last month, Sichuan Wangping Energy Science and Technology gave up its license to build the 235MW Humla Karnali-1 and 335MW Humla Karnali-2 in partnership with a Nepali company. The survey permit for these projects has now been granted to Ruru Hydropower, a Nepali company. The 1,200MW Budi Gandaki reservoir project has been caught in a geopolitical tangle between India and Nepal for the past six years. In May 2017, the Pushpa Kamal Dahal government handed over the project to China’s Gezhouba Group without competition. A few months later in October, the Deuba-led government reversed the decision and said Nepal would build it. Fast forward a year later and the Oli-led government gave Budi Gandaki back to Gezhouba, only for the Deuba-led coalition government in March 2022 to reverse the decision again. Exasperated, the then-Chinese ambassador Hou Yanqi said abandoned diplomatic niceties and said publicly that it was wrong for Nepal to change its decision every time a government changed. Says Ganesh Karki of IPPAN: “We have to conclude that because of India’s stance, it is difficult to get Chinese investment in Nepal’s hydropower. The top political leadership should lobby with India to remove this obstacle.” The hydro of hydropower&nbsp; Nepal’s former energy secretary Dwarika Nath Dhungel is convinced India considers water a strategic commodity, and its emphasis on electricity export hides its real intention to secure water supply in the coming decades.&nbsp; “We in Nepal, on the other hand, have no idea about this, and there is no clarity about our own water and energy policy. In fact, our policymakers are not working in the national interest at all,” he adds. Studies have shown that water scarcity in the Indo-Gangetic plains will increase as Himalayan glaciers dry up, and the groundwater level falls due to over-extraction. And in the monsoon, there is too much water, so the world’s most densely populated region is hit by destructive floods. &nbsp; Building storage dams in Nepal is a win-win-win for India, reducing flood risk, augmenting dry season flow of Nepali rivers that flow across the border, and generating electricity. Nepal will get some export income, but will not benefit much from irrigation since it only has a narrow strip of land in the Tarai, and large tracts of its fertile mountain valleys will be inundated by future reservoirs. “Nepal’s export of a few thousand megawatts will not mean much for India's huge power system with a capacity of around 400,000MW,” adds Dhungel. “What India is fixated on is our water. And that is why it does not want any third parties involved, especially not China.” Former secretary at the Ministry of Energy Anup Kumar Upadhyay on the other hand is all for more Indian investment in Nepal’s hydropower, and does not think there is any ulterior motive. He argues that the model in which Nepal is allowing Indian companies to build projects is beneficial to Nepal in the long term. At present, Indian companies that have received permission to build hydropower plants have agreed to provide about 22% of electricity to the Nepal government for free. And after 25 years, these projects will be fully owned by Nepal. Says Upadhyay: "Whatever projects we are giving to India now, India does not even have the benefit of regular water flow from them, so there is no reason to be suspicious that India has a grand design to control our rivers." Indeed, there are many in Nepal, even those critical of Indian behaviour, who say Nepal cannot choose its neighbours and it might as well keep India happy by ensuring that the river agreements are fair to Nepal as well.

Geopolitics of Nepal’s rivers

For decades, Nepalis have lamented the country’s inability to harness its enormous hydropower potential. Now, the problem seems to be the country’s inability to use the surplus that will soon be generated. Since 1989, 123 large hydropower projects have been constructed on Nepal’s fast-flowing Himalayan rivers bringing the total generation capacity to 2,148.5MW. After new projects come online in the next six years, generation capacity could be 18,000MW during the monsoon and 11,000MW in winter. Our focus now should be not just on generating more power, but finding out ways to boost consumption by making <a href="https://www.nepalitimes.com/here-now/the-geopolitics-of-nepal-s-water-and-electricity">electricity more competitive and sustainable</a>. Private sector projects generate 51% of Nepal’s hydropower, and the rest are government projects. We also need to decide on these three options: whether to entirely privatise hydropower production, give more ownership to the government, or create a strong regulatory body to let private and public go hand in hand. Private investments in power projects usually revert to government ownership in 30. Given how battery and hydrogen technology is revolutionising the world, it is difficult to say what will happen in the energy sector in the next three decades. Even so, Nepal’s development may continue to rely on hydropower as the primary alternative to petroleum. At present, 95% of Nepali households have access to electricity. But domestic consumption is not likely to keep pace with the increase in generation capacity. As it is, much of the valuable electricity generated in the monsoon is ‘spilled’ in the monsoon while there is a shortage in winter when 30% of power demand is met with imports from India (at up to Rs32 per unit last year). Nepal <a href="https://www.nepalitimes.com/here-now/nepal-s-1st-hydroelectric-plant-is-a-museum-piece">first started producing hydroelectricity in 1911</a> with the opening of Chandra Jyoti in Pharping. King Prithvi Bir Bikram Shah ushered in the dawn of the electric age by turning on the first electric lamp in Tundikhel. Nepal was only the second country in Asia to generate hydropower 111 years ago, and it was Prime Minister Chandra Shumsher Rana who brought in British engineers to commission the plant.  <figure><img src="https://publisher-publish.s3.eu-central-1.amazonaws.com/pb-nepalitimes/swp/asv65r/media/20230313030336_9ba299ac5298b4ca31bec8e563e7cd6dc8851c4ca31a22adac01b0c7b764ba0c.jpg" data-media-id="editor_2" data-image-id="20230313030336_9ba299ac5298b4ca31bec8e563e7cd6dc8851c4ca31a22adac01b0c7b764ba0c" data-rendition-name="original" width="1500" height="1000" loading="lazy" alt="Kulekhani Dam opened in 1982"><figcaption>The Kulekhani Dam opened in 1982, and is still the only large reservoir project in Nepal. Photos: NT ARCHIVE</figcaption></figure>  The intervening decades have been characterised with inaction and wasted opportunities. Nepal now has to play catchup so that electricity is affordable and accessible to increase consumption. One way to do that is to lower the electricity tariff so that it is competitive with the price of LPG. Nepal is still overwhelmingly dependent on <a href="https://www.nepalitimes.com/here-now/more-bullshit">biomass for energy</a>, and many rural homes use only one electric bulb for light and cook in firewood. This is largely due to the lack of access to electric stoves, refrigerators and other appliances. In 2021, the government announced that it would shift entirely to <a href="https://www.nepalitimes.com/here-now/potholes-on-the-highway-to-nepal-s-ev-future">electric vehicles (EVs)</a> by 2031. But this means investing in the necessary infrastructure as well such as charging stations, and incentives for EVs. Cement and steel industries are the largest consumers of electricity in Nepal. Proper planning is necessary to keep <a href="https://www.nepalitimes.com/here-now/nepal-s-precious-electricity-going-waste">electricity production from going to waste</a>, especially as it is expected to rise almost eightfold by 2030. Sadly, there seems to be no sense of urgency on the part of the government. It costs about Rs200 million to generate 1MW of electricity. A waste of 5,000MW is a loss of Rs1 trillion, and that is money invested by private shareholders and banks. Under such circumstances, loans and interests cannot be paid on time, which could lead to defaults. The trickle-down effect on the rest of the economy could be devastating. Serious economic diplomacy is needed to push efforts to export surplus electricity to India at a meaningful price until domestic demand rises. Despite rhetoric to increase production, Nepal also lacks enough domestic and foreign investment in the sector. Banks do not have enough capital and the interest is too high. We do not have the <a href="https://archive.nepalitimes.com/regular-columns/Comment/storing-water-reservoir-Nepal,1042">necessary infrastructure</a> either: project sites are accessible only for five months in a year due to bad roads during the monsoon. Extension of transmission lines is sluggish. Local obstruction like in the construction of a substation in Lapsiphedi is hindering progress. A national strategy and consensus is needed to expedite transmission lines. During the Panchayat era, a resettlement company was formed to arrange accommodation for residents displaced by the construction of <a href="https://archive.nepalitimes.com/article/nation/reservoirs-of-suspicion/hydropower-geopolitics%20,3991">large projects</a>. But it was dissolved when democracy was restored in1990. Today, there is no land acquisition body at the national level. Moreover, related agencies are working at cross purposes and have conflicting interests. For example, the Nepal Electricity Authority (NEA) is not only a producer but also the sole buyer of electricity generated by the private sector. It also determines the price of power, and it is often not attractive enough for the private sector. The Electricity Production Company, Hydropower Investment and Development Company and Electricity Development Department were all formed to generate hydroelectricity but there is no effective regulation of these bodies. The Electricity Regulatory Commission does everything but solve the existing problems or prepare for future challenges. Governmental agencies like the Ministry of Energy, NEA, Nepal Stock Exchange, Nepal Securities Board, CIAA, and Electricity Regulation Commission and Parliament committees should all coordinate their activities with a national strategy in mind. With such vested interests, hydropower investors also have to navigate a sluggish bureaucracy. But if we want to secure the future of electricity in Nepal, and <a href="https://www.nepalitimes.com/here-now/nepal-s-precious-electricity-going-waste">not waste precious power</a>, it is imperative that a single strong regulatory body is formed to streamline the sector in the national interest. Kumar Pandey is General Secretary of the Independent Power Producers' Association, Nepal (IPPAN). Translated from the Himal Khabar <a href="https://www.himalkhabar.com/news/134646" target="_blank">original</a>. Read also: <a href="https://www.nepalitimes.com/here-now/how-they-kept-nepal-in-the-dark-ages/">How they kept Nepal in the dark ages</a>, Ramesh Kumar <a href="https://www.nepalitimes.com/here-now/the-geopolitics-of-nepal-s-water-and-electricity">The geopolitics of Nepal’s water and electricity</a>

Securing Nepal’s electric future

<figure><img src="https://superdesk-pro-c.s3.amazonaws.com/sd-nepalitimes/20221114131124/637233e79c7e80680e0c4906jpeg.jpg" alt="" width="853" height="640"/><figcaption>The damage to the channel diverting water from the Melamchi to the tunnel at the project headwork. The debris here is 20m deep. Photo: SHIVA BASKOTA</figcaption></figure>In June 2021, a massive debris flow on the Melamchi River killed at least 30 people, submerged settlements, and nearly destroyed Nepal’s biggest infrastructure project to supply water to Kathmandu.Scientists blamed <a href="https://www.nepalitimes.com/banner/how-the-climate-crisis-adds-to-child-marriage-in-nepal/">the climate crisis</a>. A wall of mud raced down the river after unprecedented rainfall at the beginning of the monsoon on glacial deposits left by melted ice.Boulders and mud paste buried the headworks of Melamchi Water Supply Project under 20m of debris, resulting in damage worth more than Rs2 billion. Timely closure of the gate saved the project’s 26km tunnel to Kathmandu from irreversible damage.“Melamchi project cost $800 million and nearly 25 years to complete, but it took just one weather event to render it nearly useless,” says water expert Madhukar Upadhyay. “It only goes on to prove that our landscape is not suitable for large infrastructure projects. And now we have climate change in the mix.”<figure><img src="https://superdesk-pro-c.s3.amazonaws.com/sd-nepalitimes/20221114131124/637233eb9c7e80680e0c4907jpeg.jpg" alt="" width="1500" height="500"><figcaption> </figcaption></figure>Nepal’s only reservoir project on the Kulekhani was commissioned in 1982 and was supposed to have a lifespan of 100 years. But a cloudburst in the catchment area in 1993 deposited so much debris into its lake that the cascade project that generates 106MW of electricity will now function for only another 30 years.The Himalayan mountains are warming between 0.3 to 0.7°C faster than the global average, and a report by the International Centre for Integrated Mountain Development (ICIMOD) predicted that even in the best-case scenario, more than one-third of the remaining ice will melt during this century. If current global heating trends continue, two-thirds of the ice will be gone.Meltwater from Himalayan glaciers collect behind fragile moraine dams, increasing the threat of <a href="https://www.nepalitimes.com/banner/danger-nepals-glacial-lakes-are-filling-up/">Glacial Lake Outburst Floods (GLOFs)</a> that can wash away infrastructure: hydropower plants, highways, bridges and canals.As it is, many of these projects have either ignored or falsified their Environmental Impact Assessment (EIA). They are built along rivers that have not been properly assessed for extreme weather.<img src="https://superdesk-pro-c.s3.amazonaws.com/sd-nepalitimes/20221114131124/637233ee9c7e80680e0c4908jpeg.jpg" alt="" width="960" height="640">A paper last month in the journal Nature Geoscience titled ‘High Mountain Asia hydropower systems threatened by climate-driven landscape instability’ has a checklist to minimise climate-driven hazards on Himalayan infrastructure.‘Maps of the distribution of paraglacial zones, sediment yield and hazard susceptibility that better delineate current and future unstable landscapes and erosion-prone regions should be produced,’ states the paper. ‘Policy development regarding maintaining existing and planning of new hydropower projects should be guided by such hazard and risk maps.’Researchers point out that storage capacity design <a href="https://www.nepalitimes.com/opinion/climate-risk-to-hydropower-investment/">should consider potential storage losses</a> associated with increasing sediment loads due to climate change, and provide additional storage, sediment bypassing, sluicing, dredging and drawdown flushing to minimise sedimentation and increase reservoir lifespans.Catchment management can reduce slope instability and erosion rates with reforestation and check dams. ‘For existing reservoirs, a reassessment of sediment management solutions aimed at enhancing sustainable sediment management is recommended,’ the Nature Geoscience paper states.<figure><img src="https://superdesk-pro-c.s3.amazonaws.com/sd-nepalitimes/20221114131124/637233f19c7e80680e0c4909jpeg.jpg" alt="" width="960" height="640"><figcaption> </figcaption></figure>Upadhyay agrees: “The first thing is to study and assess the area before the start of the project. In case they are already functioning, we have to monitor how they are affected, which will give us insights into future weather patterns. But most importantly, we need localised forecasts.”Indeed, the paper also recommends monitoring, forecasting and early-warning systems to be developed and implemented. ‘Strategically oriented monitoring networks that measure high-altitude climate, glacier and permafrost dynamics, glacial lakes, unstable slopes and water and sediment fluxes should be expanded for high-risk areas,’ it adds. Nepal has either too much or too little water. Seasonal floods and the weather extremes here predate climate change. Other disasters not related to climate, such as earthquakes, multiply the risk for infrastructure.And yet, there is no proper mechanism even to assess loss and damage post-disaster which is ironic given Nepal’s strong stance on climate justice at international climate conferences.<figure><img src="https://superdesk-pro-c.s3.amazonaws.com/sd-nepalitimes/20221114131124/637233f49c7e80680e0c490ajpeg.jpg" alt="" width="1231" height="603"><figcaption> </figcaption></figure>“Loss and damage as an issue has been highly politicised, but it is also rooted in climate justice, and what we are experiencing today is a cumulative impact of the last 150 years,” explains climate scientist Ajaya Dixit. “Nepal must continue to be a part of this discourse, but we must also do our bit. We must not just lobby for funds but also for support and partnerships to actively address changes due to the climate.”Nepal’s current response to climate disasters is limited to search, rescue and relief. Mitigating and adapting to risk, for example by reducing the level of glacial lakes such as Imja and Two Rolpa, are dependent on funding.Nepal now has better standardised data through the BIPAD portal under the National Disaster Risk Reduction And Management Authority (NDRRMA). The next step is to map hazards, prioritise infrastructure and people most at risk through local first responders.<figure><img src="https://superdesk-pro-c.s3.amazonaws.com/sd-nepalitimes/20221114131124/637233f69c7e80680e0c490bjpeg.jpg" alt="" width="857" height="500"><figcaption> </figcaption></figure>Adds Dixit: “We need a large-scale systemic change to adapt to the climate crisis but for now we can start with developing and implementing a robust assessing mechanism. And it is unacceptable that our infrastructure still follows designs, methods and metrics from the time when climate change was not even in our vocabulary.”Such is Nepal’s hydropower potential that it has provided it geopolitical leverage. India is increasingly expanding its investment on Nepal’s rivers, and building large reservoir projects. Chinese companies are building hydropower projects directly downstream from high-risk glacial lakes in Tibet.Climate disasters raise the issue of a cross-border risk, since many of Nepal’s start in China, where there are many glacial lakes that are at bursting point. GLOFs originating in China have in the past destroyed highways and hydropower projects on the Bhote Kosi.<figure><img src="https://superdesk-pro-c.s3.amazonaws.com/sd-nepalitimes/20221114131124/637233f99c7e80680e0c490cjpeg.jpg" alt="" width="1013" height="562"><figcaption> </figcaption></figure>Research by Chinese scientists on the Nyainqêntanglha mountains on the Tibetan Plateau even five years ago showed that the frequency of destructive GLOFs were increasing, and they proposed urgent mitigation measures.‘Potential damage from GLOF disasters is significant,’ wrote Shijin Wang and Lanyue Zhou in the <a href="https://link.springer.com/article/10.1007/s13753-017-0152-7" target="_blank" rel="noopener noreferrer">International Journal of Disaster Risk Science</a>, ‘There is an urgent need for (Chinese) government departments to implement engineering measures on all potentially dangerous glacial lakes.’Nepal is increasingly reliant on selling its surplus electricity to India. Power generation in the monsoon exceeds 2,100MW even as average domestic demand stands at just 1,550 MW. Another 2,500MW of electricity will be added to the grid in the next two years, while 3,000MW of new projects are in the pipeline.But these projections are at the mercy of future climate-induced risk. Says Upadhyay: “If hydropower is indeed our future, we must treat it with that kind of seriousness and commitment. We must bring in experts who think not only in monetary terms, but holistically at how the climate crisis is changing the Himalayan landscape.”Read more: <a href="https://www.nepalitimes.com/opinion/climate-risk-to-hydropower-investment/">Climate risk to hydropower investment</a>, Ajaya Dixit

Climate-smarter Himalayan infrastructure

<figure><img src="https://superdesk-pro-c.s3.amazonaws.com/sd-nepalitimes/20221114131112/637230969c7e80680e0c2574jpeg.jpg" alt="" width="1500" height="1000"/><figcaption>The Kulekhani Dam opened in 1982, and is still the only large reservoir project in Nepal. Photos: NT ARCHIVE</figcaption></figure>A rapidly warming atmosphere is <a href="https://www.nepalitimes.com/banner/nepals-mountains-are-melting/" target="_blank" rel="noopener noreferrer">melting Himalayan glaciers</a>, changing the seasonal flow of water in Nepal’s rivers, and increasing the interest of downstream India to regulate water and generate electricity.For Nepal, this is an opportunity to finally tap the potential of the country’s ‘white gold' to meet growing demand for electricity domestically, as well as redress its trade deficit with India by selling <a href="https://www.nepalitimes.com/banner/nepals-precious-electricity-going-waste/" target="_blank" rel="noopener noreferrer">surplus power</a>.New Delhi’s priority has been not so much electricity but to try to regulate the flow of the Ganges by storing monsoon runoff in its Himalayan tributaries in Nepal, which is why it has lately started showing an interest in building large <a href="https://archive.nepalitimes.com/article/nation/reservoirs-of-suspicion/hydropower-geopolitics%20,3991" target="_blank" rel="noopener noreferrer">reservoir projects in Nepal</a>.“There is no doubt that India's real interest is in Nepal’s water resources rather than hydroelectricity,” says Sheetal Babu Regmi, formerly head of the Water and Energy Commission. “And water is going to be an even more critical commodity with the climate crisis.”Almost two-thirds of the water in the Ganges that flows through some of the most densely-populated regions in the world comes from the rivers of Nepal. And most of that flows down in the four monsoon months between June-September.In the rainy season, there are destructive floods in the plains, and for nine months in a year, the rivers have low flow. <a href="https://archive.nepalitimes.com/regular-columns/Comment/storing-water-reservoir-Nepal,1042" target="_blank" rel="noopener noreferrer">Storage dams in Nepal</a> would even this out, reducing flood damage during the monsoon, and make adequate water available the rest of the year.Climate change means that there will be even less water flowing in the Ganges and its tributaries in the dry season in the coming decades.A recent report by India's NITI Ayog showed that nearly 600 million Indians are facing a shortage of water for irrigation and household use, and singled out 21 cities, including New Delhi, as potentially facing groundwater depletion by 2030.Another report by ICIMOD (the Kathmandu-based International Centre for Integrated Mountain Development) warned that failure to reduce carbon emissions would lead to the <a href="https://www.nepalitimes.com/banner/a-terrifying-assessment-of-himalayan-melting/" target="_blank" rel="noopener noreferrer">Himalaya losing up to two-thirds of its remaining glaciers</a> during this century.It is therefore strategically important for India to ensure regulated year-round water on the Ganges, and for this it needs a government in Kathmandu that is amenable to allowing it to build large reservoirs on Nepal’s rivers.However, given the historical asymmetry of past Indian projects on <a href="https://www.nepalitimes.com/banner/the-kosis-sorrow-and-scope/" target="_blank" rel="noopener noreferrer">the Kosi</a> and Gandaki, river projects are political hot potatoes in Nepal. Governments in the past have fallen because incumbents signed off on river treaties with India that were deemed to disproportionately benefit India.<figure><img src="https://superdesk-pro-c.s3.amazonaws.com/sd-nepalitimes/20221114131112/637230999c7e80680e0c2575jpeg.jpg" alt="" width="1185" height="774"><figcaption> </figcaption></figure>Which is what makes the timing of announcements of a slew of new Indian investment in river projects in Nepal after Prime Minister Sher Bahadur Deuba-led coalition came to power last year so significant.On 14 June, Nepal’s cabinet gave permission to India’s state-owned NHPC Limited (formerly the National Hydroelectric Power Corporation) to build the 750MW West Seti hydropower project. The China Three Gorges International Corp (CTG) had in 2018 been edged out of the reservoir project with a 194m high dam in western Nepal.The NHPC had made a proposal to Nepal’s Investment Board in May for the construction of the project following promises made by Prime Minister Deuba during his visit to India in March. And while on the campaign trail in Dadeldhura in May, Deuba had revealed that construction of the West Seti would have to be given to India because otherwise New Delhi would not buy electricity off projects with Chinese investment.But experts have raised serious issues with the way such a large project has been handed over to Indian companies without the requisite competitive bidding process, and using a legal loophole to circumvent Nepal’s Public Private Partnership and Investment Act.An agreement to hand over a 51% stake in the construction of the <a href="https://www.nepalitimes.com/business/arun-4/" target="_blank" rel="noopener noreferrer">Arun-4 hydropower project</a> to another Indian state-owned company, Sutlej Hydropower Corporation, was also made in June during Indian Prime Minister Narendra Modi’s visit to Lumbini.Arun-4 follows Sutlej’s joint venture on the upstream <a href="https://www.nepalitimes.com/latest/oli-modi-launch-arun-iii/" target="_blank" rel="noopener noreferrer">Arun-3 project</a> in eastern Nepal, and the government was so secretive about the deal that Nepalis came to know about it only after Nepal Electricity Authority (NEA) executive director Kulman Ghising signed the agreement in Lumbini with Sutlej Hydropower chair Nand Lal Sharma.Sutlej Hydropower earlier acquired the 679MW Lower Arun project construction rights under former prime minister K P Sharma Oli. The cascade of Indian projects on the Arun River will generate 2,000MW of electricity in eastern Nepal.And with West Seti and Upper Karnali projects, Indian companies will be generating another 2,000MW of electricity from western Nepal for export to India.Additionally, the government is also planning to award the 450MW Seti River-6 project to NHPC. Sources at the Investment Board Nepal say that the Indian company is taking most of the electricity, and offering only 3% of free electricity to Nepal. The NHPC has also submitted a proposal for the 480MW Phukot Karnali and the 1,902MW Mugu Karnali projects in north-western Nepal.<figure><img src="https://superdesk-pro-c.s3.amazonaws.com/sd-nepalitimes/20221114131112/6372309c9c7e80680e0c2576jpeg.jpg" alt="" width="800" height="471"><figcaption> </figcaption></figure>The fact that all these projects have been announced only after Deuba replaced K P Oli as prime minister last year indicates that his coalition partners have been friendlier to Indian proposals on river projects than previous governments.Indeed, the 900MW Upper Karnali hydroelectric project which was awarded in 2014 to the Indian private company GMR was given a two-year extension despite its failure to finalise investment.“Nepal is playing a geopolitical game with hydropower, flouting the Constitution and prevailing laws,” says former water resource minister Dipak Gyawali.Nepal’s Constitution stipulates that treaties or agreements related to the distribution of natural resources and their use must be approved by a two-third majority in the Federal Parliament.Other experts however, say that Nepal cannot just sit on its rivers, it must harness them for economic progress, and for this it has to cooperate with India on an equal footing for mutual benefit.“Indian investment in the hydropower sector will benefit Nepal, it will mean the electricity we generate will find a ready market in India and reduce our trade deficit,” says NEA director Kulman Ghising.However, it is the fear that India will derive disproportionate benefit from these joint projects that worries Nepali experts, especially since there is historical precedent for that.India has also put pressure on Nepal by refusing to buy electricity from projects built with investment or contractors from China. India refused to buy surplus power from Nepal this monsoon, wasting 500MW of electricity. Chinese investors are presently involved in building hydropower plants with a total capacity of 1,000MW.Deuba reached an energy-sharing agreement during his India visit in March, under which the Central Electricity Authority of India approved 364MW of electricity imports from six hydropower projects in Nepal -- but only those not built by the Chinese.Foreign policy experts have seen a clear departure on the part of Prime Minister Deuba towards India on river basin projects, with Indian companies being favoured over Chinese ones.<figure><img src="https://superdesk-pro-c.s3.amazonaws.com/sd-nepalitimes/20221114131112/6372309e9c7e80680e0c2577jpeg.jpg" alt="" width="1920" height="1080"><figcaption> </figcaption></figure>In March, the Deuba-led government decided to revoke the license issued to the China Gezhouba Group Company (CGGC) to develop the mammoth <a href="https://www.nepalitimes.com/banner/nepals-mega-dam-is-a-mirage/" target="_blank" rel="noopener noreferrer">$2.5 billion Budi Gandaki hydropower project</a> west of Kathmandu, and to build its 263m high dam to generate 1,200MW on its own.The Budi Gandaki has been a victim of geopolitical pingpong for the past five years. In 2017, Maoist Prime Minister Pushpa Kamal Dahal’s government awarded the project to CGGC, but the subsequent Deuba government reversed the decision, angering the Chinese. In 2018, K P Oli’s administration restored the contract, only to have Deuba cancel it again this year.Chinese Ambassador Hou Yanqi stated in May that it was “wrong to change policy (on Budi Gandaki) with every change of government … such actions kill the investment climate”.“It is not diplomatically mature to repeatedly undo decisions of preceding governments every time power changes hands,” cautions foreign affairs expert Dinesh Bhattarai.Experts say that India’s policy on it energy imports from Nepal will not only just discourage future Chinese investments in Nepal which is its goal, but also other investors. It will also throw Nepal’s policy of equidistance between China and India off balance.All this is not new. Before Three Gorges, Australia’s Snowy Mountain Engineering Company (SMEC) also pulled out of the West Seti project in 2010 after India showed no interest in buying its electricity. Then the Norwegian company SN Power abandoned the export-oriented 650MW Tamakosi 3 after not getting the green light from New Delhi to buy its power.Most of Nepal’s hydropower projects so far are run-of-river schemes in which generation capacity falls during the dry season. This means Nepal has a power deficit in winter when it needs to import from India, and has a surplus in the monsoon which it has started exporting to India.Having reservoir projects would change that, and give Nepal a more year-round generation capacity, while also regulating water on rivers as a bonus. But even with the present hydropower projects, Nepal earned Rs1.72 billion just in June from selling its excess electricity to India.“India considers water a strategic resource, and is cleverly trying to keep Nepal's energy system under its influence,” explains Dipak Gyawali, the former minister.Clearly, Nepal needs to prioritise domestic consumption of electricity over its export and channel it into electrification of transport, industries and homes. All of this will automatically cut down on petroleum imports, reducing its increasing trade deficit.Selling raw electricity to India is not as beneficial, experts point out, because Nepal is selling its power at a much cheaper rate to India than to domestic consumers. Switching to electric vehicles to reduce Nepal’s petroleum import bill by just 10% would save the country over Rs30 billion a year.The combined capacity of Nepal’s hydropower projects has now exceeded 2,100MW even as average domestic demand stands at just 1,550 MW. Another 2,500MW of electricity will be added to the grid in the next two years, while 3,000MW of new projects are in the pipeline.In a few short years, Nepal will have surplus year-round electricity, and experts say it will be better for the economy to use the power within Nepal to manufacture value-added products than to rely so heavily on selling power to India.They say Nepal needs to rework its energy needs so as to increase domestic consumption, and cut its widening trade deficit with India by reducing petroleum imports rather than just exporting power.