Global warming is the gradual rise in earth’s surface temperature due to the effect of greenhouse gases released from burning fossil fuels and deforestation. Over the period of 1880-2012, the combined land-ocean temperature increased by 0.85° Celsius. Global average temperature is expected to rise between 1.4 – 5.8°C in the next 100 years.
A recent report by Intergovernmental Panel on Climate Change (IPCC) confirmed that human activities are ‘dominant cause’ of global warming since 1950s (IPCC, 2014).The climate change alters hydrological systems through precipitation change or melting of snow or ice and affects the quantity of available water, seasonal activities, and migration patterns.
In this post, I focus on global warming’s consequences in South Asian regions and the imminent need to collaborate to identify and reduce climate change related risks.
Serious Consequences of Global Warming
Nepal is still coming to terms after the devastating 7.8-magnitude earthquake. Immediate relief effort has finally started to reach remote areas. With government, security forces, independent groups, international governments and organizations continuing their extra-ordinary work in the relief efforts, I would like to draw attention to simultaneously thinking about the long-term recovery process. The recovery process includes debris removal, post-earthquake health sector co-ordination, restoration of public utilities, and resettlement/reconstruction/ rehabilitation.
Recovery will be long and arduous. Although it is too early to assess the full cost of the catastrophic earthquake, an initial estimate by U.S. Geological Service reckons damages of $1 to $10 billion. An economist with IHS forecasts the cost of reconstruction to be around $5 billion.
Central Coordination is key
With Nepal’s domestic power producers focusing on developing small-to-medium hydro projects, mainly because of lack of capital and technical expertise, there is a need for foreign investments in Nepal’s hydro sector. In the last few months, Nepal Government has successfully signed project development agreements (PDA) with two Indian companies regarding 900 MW Arun III and 900 MW Upper Karnali projects. Three George Corp., a Chinese company that is doing electromechanical work for Upper Tamakoshi (456 MW project), is also vying to get into Nepal’s hydro business through the West Seti project. Foreign investment in hydropower is definitely welcoming as the country is facing dire energy crisis. A research done for Britain’s Department for International Development suggests that four big hydro projects could earn Nepal a total of $17 billion in the next 30 years— this is not bad considering Nepal’s GDP last year was a mere $19 billion. However there are also some challenges mainly in building trust and cooperation, timely execution, electricity load management, and finding markets for surplus electricity. This post briefly summarizes these mega projects and also discusses the impact of foreign investment to Nepal.
Nepal Investment Board (IBN) and GMR-Energy signed an agreement in September 2014 to build a 900 MW, $1.4 billion plant in Upper Karnali. The commercial operation of the project is expected to begin in September 2021 with financial closure to be completed by September 2016. GMR has also partnered with International Finance Corporation (IFC) in developing Upper Karnali project and two high-powered transmission lines. The Upper Karnali development project was agreed in principle in 2008 but delayed primarily because of political instability in Nepal. GMR is also in advanced stage of developing another big project, Upper Marsyangdi-2 (600 MW). Nepal Investment Board (NIB) and GMR signed the agreement with the aim of providing greater security to foreign investors in Nepal and also asserting foreign entities’ responsibilities to protect Nepal’s national interests. Similarly, India’s state-owned power company, Satlij Jal Vidyut Nigam, will construct a 900 MW Arun III hydro river project after signing the agreement in November 2015. The deal was completed during SAARC summit in the presence of Prime Ministers of India and Nepal and is expected to generate electricity from 2021.
Boost Energy Access & Economy
There are a lot of ongoing discussions on the proposed power agreement between Governments of Nepal and India. With Nepal’s untapped hydropower resources, India’s power need, and recent changes in Indian politics, the discussions for power treaty is again back on the table. I was lucky enough to get a copy of the draft of the agreement. In this post, I discuss the important points of the agreement and few areas that need clarification.
Both countries realize the importance of meeting electricity demand for socio-economic development and the progress of people. The agreement aims to facilitate cooperation in the fields of power generation, power transfer, grid connectivity, energy efficiency, renewable energy, and power related consulting and research services. More importantly, both countries are emphasizing the importance of developing additional hydropower potential by cooperating in the construction and operation of hydropower.
Power wastage amounts to 50m units due to lack of transmission lines (The Kathmandu Post, accessed September 4, 2013)
I have raised the issue about the consequences of lack of transmission infrastructure in Nepal. NEA reports that the total loss due to insufficient transmission lines in 2012-13 fiscal year is worth of Rs 420 millions. The posts cites Bhuwan Chettri, chief of Load Dispatch Center (LDC), and writes that NEA’s loss was due to the delay in construction of three power line projects, including Khimti- Dhalkebar (220kv), Suchayatar-Matathirtha-Kulekhani – 2 (132kv) and Bharatpur-Hetaunda (220kv). The delay affected power generated from hydro power projects like Kaligandaki, Marysandi, Madhya Marsyandi, Trishuli, Chilime, Indrawati and Spring Khola to connect to the national grid. The news reiterates the fact that Nepal should focus on building new transmission and distribution lines to accommodate additional generation if it seriously wants to solve the energy crisis.
Power Grid preparing road map for SAARC electricity grid (The Economic Times, accessed August 30 2013)
This is a very welcoming news indeed. An electricity grid connecting South Asian countries will not only increase reliability, but also will help to harness each SAARC nation’s capacities and resources to address growing energy needs in the region. India, Afghanistan, Bangladesh, Bhutan, Maldives, Nepal, Pakistan and Sri Lanka are part of SAARC. The Indian State-run Power Grid is finalizing the construction of transmission line between India and Nepal for transfer of bulk power.
Other News articles:
Nepal’s energy situation is marred with massive power shortages. Besides low production of electricity, the other cause for the shortage of electricity is the amount of power lost during the transmission and distribution process. The average annual transmission loss in Nepal’s electricity market is about 28 percent of total electricity generation (Nepal Electricity Authority, 2011), whereas the average power loss among 134 countries that are in World Bank’s database is 13.67%.
Reducing transmission loss is very important because the saved power can be sold to consumers and thus can generate extra revenue. It is even crucial in Nepal’s case, since we have not been able to produce enough electricity to meet the demand. Thus, decreasing transmission losses not only generates additional revenue, it can also be an alternative for saving capital cost from building new infrastructures.
Have you ever wondered where does Nepal’s electricity come from? Nepal Electricity Authority (NEA) primarily gets electricity from three sources – self-owned hydropower plants, purchase from India, and purchase from Nepal’s Independent Power Producers (IPP). The graph does not include electricity generated from thermal plant and electricity produced from micro-hydropower plants that are not connected in the national grid.
During 2001 – 2011, more than half of the grid connected electricity came from NEA owned plants. IPP’s contribution has doubled during the same period; NEA purchased 501.38 GWh of IPP generated electricity in 2001, whereas this amount increased to 1038.84 GWh in 2011. NEA also depends heavily in India for the electricity – in last ten years, on average, India supplied 12 percent of NEA’s electricity . However, the most concerning part is that the share of purchase from India has increased to 17 percent in last two years. Is it good to depend on India for almost one-fifth of Nepal’s electricity? Doesn’t it enhance India’s strategic power over Nepal? What do you guys think?
Data Source: NEA Annual Report (2011)