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Welcome
Sustainability of Hydropower in Nepal
A Case of Upper Karnali Project
By
Hari Prasad Pandit
Institute of Engineering, TU
hppioe@gmail.com
April 2014
Content of Presentation
Why this Presentation
Why Upper Karnali in Consideration
Conceptual Layout of Development Options
Technical and Financial Indices of Options
Comparison with Other Reservoir Projects
Financing Model
Time Frame of Implementation
Inference from Upper Karnali HEP
Sustainable Energy is the key input for industrial
Development and Prosperity of any Nation>
Do we have Resources?
No Oil, No Gas, No Coal
83,000 MW, 44000 Economically Feasible Hydropower
With the balance of Storage and RoR Projects ~
100,000 MW (with PF~ 0.5) can be generated
Considering all kinds of benefit (Power, Irrigation,
Navigation, Fisheries, Water Supply, Recreation.)
about 10 times the Annual Budget (5,000 bln/Year)
And Energy can be generated at a much cheaper price
if we develop in a planned way
Why this Presentation ?
Why this Presentation ?
Do we have Financial Resources for funding ?
Remittance Alone
About 4,000,000 Nepalese work outside
About 2,500,000 alone in Gulf and Malaysia
Minimum wage now is NRs 25,000/month (saving)
In average NRs 40,000/month (saving) can be estimated
In Annual term 12 00 bln will be received through official
and non official (Hundi) channel (now ~600-8 00 bln)
However most of this resource is not utilized in productive
sector
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Why this Presentation ?
Do we have Human Resources for Implementation ?
Nepalese professionals have graduated from across the Globe
Diversity of infrastructure projects in Grants/loan by Japan,
China, India, UK , Russia ,Germany, Norway, US
Nepalese professionals have diversity of knowledge
technology and experience
Nepalese professionals have been working in reputed
institutions across the Globe
Semiskilled and non skilled manpower will return from abroad if
there will be opportunity at home
Why this Presentation ?
Existing Power/Energy Scenario
~ 700 MW Installation with < 50% capacity in Winter
System Peak load ~ 1,200 MW
Load shedding ~ 18 hrs + ( disagree supply 22:00-6 :00)
1200 MW addition in 4 years all except KL-3 (14 MW ) are
RoR/PRoR
Only ~ 250-300 MW will be available in Winter
In 4 years time again a shortfall of ~ 600 MW
West Seti -750 MW From SMEC to Three Gorges
400 MW Nalsaugad in planning
Why this Presentation ?
Existing Power/Energy Planning
Upper Seti Tanahun 140 MW
Small reservoir, Expensive generation
Downstream benefit due to power/irrigation-insignificant
Budigandaki Storage ( 630 MW in next ~10 yrs)
Expensive, Revenue ~ 15-17 bln/year; social issues
severe, Financing ~ 250 bln
But downstream (India) Benefit (irrigation )~ 15 bln/yr
Due to flow regulation in Nepal ~ 3 bln/yr
Question-should we implement these projects ?
Yes, As we are paying twice as much now
Why this Presentation ?
How much Power (MW) we need in next 10 years ?
In Ten years horizon , again we will have shortage of ~330 MW
Add 600 MW plus if we can insure Energy throughout the year
Suggesting a single project with a capacity as 1500-2000 MW
with cascade benefit to be sought for 10 yrs planning
Remember , for a similar dam height the cost of the dam is
almost same . Be it, small Kulekhani or mighty Karnali
Summer Winter Peak Defecit
Current Availability 730 500 1200 700
Upper Seti 140 140
Budigandaki 630 630
West Seti 750 750 750
RoR in 10 yrs
(assumed) 2500 750
Total 4750 2770 3100 330
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Why this Presentation ?
Existing Scenario/Plan
Import from India ??????
Upper Karnali 900 MW (
900 MW in Summer, ~150 MW in Winter out of that 12% ( 18
MW will be supplied to domestic grid + 27% Free share)
Similar situation with Arun 3
Imbalanced generation makes energy very expensive and
state authority Bankrupt
Ministry of Water Resources eliminated, institutions like
WECS (heart of WRD) weakened or destroyed
Who to be blamed???
Problem in Understanding??
Whether we need Power/ Energy?
Whether we need Water ?
Whether we need both water and Energy?
In Major river basins we have surplus water for irrigation and
Water Supply
Only Basins such as Babai, Kamala, Bagmati are deficit
ones
Therefore, not a dam with big storage but a small
dam/ reservoir with multiple use and/or multiple
benefit in cascade is the sustainable option for Nepal
Problem in Policy/Regulations
Licensing Haphazard
No River Basin Study
No Master Plan preparation in most of the basins
No update - some of the basins with preliminary Master Plan
No policy for the pricing of Regulated flow (from Reservoir)
14 bln/yr in immediate downstream due to regulated flow
Nevertheless, licenses of RoR Projects - usual business of
DoED
Made aware Chief Secretary and DoED
Why Upper Karnali Project (UKP)
Because of Magic bend with a head
difference as 140 m this project is the
cheapest in Nepal and probably in the World
Often called Jewel of the Crown by
Engineers and Economists
Instead of Developing a single PRoR Project
as planned (UK 900 MW) high dam and
reservoir followed by RoR project with several
options can be planned.
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Upper Karnali Project: Dam Site
Upper Karnali Project: Reservoir Area
Study Methodology
Hydrology and Energy : Hydrology of
Asraghat(DHM:1962-2006), Fully Utilized
Topography and Head : Topographical Map, 1:25,000
(FinMap)
Geology: FSR by NEA/ CIWEC, 198? and Site Visit and
Study
Rockfill dam of 1:1.7 slope is considered for cost estimate.
Quantity Estimation : Sections drawn from Topo Sheets,
Quantity Estimates from Base Cost for large Hydropower
Plants, NVE, Norway, 2010
Cost : NVE, 2010 and Contractors rates from ongoing
Projects, Nepal
Benefit : Avg. Price of Energy U$c 6.0/kWh
Reliability/Accuracy: Revenue 5% ,Cost (20%)
Financial Analysis carried for Reservoir+ RoR Projects
Hydrology and Energy Potential
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Hydrology and Energy Potential
Qd= 680(m3/s) QEnv = 12.4 (m3/s)
Month Days Q (m3/s)
Asraghat
(1962-
2006)
Env Runoff
(mcm)
Effective
Runoff
(mcm)
Runoff
Wet
Runoff Dry Qexcess
Excess
Runoff
Jan 31 137.1
132
32.5 334.7 334.69 0.0 -
Feb 28 121.4
118
29.4 264.3 264.32 0.0 -
Mar 31 133.1
131
32.5 324.0 323.98 0.0 -
Apr 30 206.9
197
31.5 504.8 504.82 0.0 -
May 31 392.2
389
32.5 1018.0 1017.95 0.0 -
Jun 30 733.1
713
1900.2 1900.2 33.0 86
Jul 31 1166.7
1160
3124.9 3124.9 480.0 1,286
Aug 31 1376.8
1380
3687.6 3687.6 700.0 1,875
Sep 30 916.4
920
2375.3 2375.3 240.0 622
Oct 31 418.9
415
32.5 1089.5 1089.47 0.0 -
Nov 30 231.3
228
31.5 568.1 568.06 0.0 -
Dec 31 162.2
165
32.5 401.9 401.92 0.0 0
Annual 365 499.675 495.667 15593.2 11,088 4,505 3,868
Hydrology and Energy Potential
FSL 820 m
MDDL 730 m
TWL 480 m
QD 619.6 m
Gross Head 340.0 m
Net Head at FSL 333.2 m
Reservoir
Variation 90.0 m
Rated Head 304.0 m
Overall efficiency 0.9 m
Installed Capacity 1,822,704 kW
Total Generation
at rated head 11,626 GWh
Development Alternatives
Alternative 1 : Projects in Cascade
Project 1 at Upstream : Reservoir Project
230 m Dam at Tuinkuna (U/S of
Ramagad) with FSL at 820 masl
Gross Head = 200 m
Powerhouse at Dam toe
Discharge = 680 m
3
/s
Power = 1177 MW
Energy= 6272 GWh
Project Cost ~ NPR 175 bln
Alternative-1
Project 2 : RoR Project in Cascade
Tailrace Tapping with FSL at 620 masl
TWL = 480 masl
Gross Head = 140 m
Underground Powerhouse
Discharge = 680 m
3
/s
Power = 825 MW
Energy
RoR 3931 GWh
Reservoir storage 1303 GWh
Total 5233 GWh
Total Cost ~ 33 bln
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General
Impression
of Reservoir
after
impounding
Conceptual
Layout of
Alternative 1
Alternative 2 : Project 2 Further
Downstream- No tailrace tapping
Assumption: Project 2 starts earlier (Now)
Project 1 : Reservoir Project
Same as in Alternative 1
Project 2 : PRoR Project downstream of Ramagad
FSL = 620 masl
Diversion Headworks with all components
TWL = 480 masl
Other Parameters same as Alternative 1
As the project starts earlier, about NRs 15- 18 bln
more compared to Alternative 1 with delay of 1-1.5
yrs.
Project cost ~ NRs 50 Bln
Conceptual
Layout of
Alternative 2
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Alternative 3 : Single Dam/ reservoir
Dam/Reservoir at Dailekh/Achham
FSL =820 masl
TWL = 480 masl
Gross Head = 340 m
Underground Powerhouse across Valley
Discharge = 680 m
3
/s
Power = 1823 MW (16 hrs in winter)
Energy
Wet 7716 GWh
Dry+ storage 3910 GWh
Total 11,626 GWh
Cost 200 bln
Conceptual
Layout of
Alternative 3
Site Information- Reservoir Area Site Information- Dam Site
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Dam Site- Left Bank Site Information- Test Adits
Test Adit on Left bank Test Adit on Right bank
Site Information- Test Adits
Comparison of Alternatives
Parameters
Alternative 1 Alternative 2 Alternative 3
Storage RoR Storage PRoR Single Project
Total Power (MW) 1177 824 1177 824 1823
Total Energy (GWh) 6272 5233 6272 5233 11626
Total Cost (U$, Mln) 1719 373 1719 537 2064
Total Revenue (U$,
Mln) 690 691 697.5
Cost/kw (U$) 1045 1128 1132
Cost/kwh (U$c) 2.0 2.2 1.95
Cost/kwh (NRs) 2.0 2.2 1.95
Note : Interest Rate: 10%
Prelimanary calculation Without IDC
Power plant in operation for ~ 16 hours a day in winter
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Which Alternative Preferred
Phase 2 Development
With the development of RoR projects, Peak
demand will be increased
About 2000 MW (with total ~4000 MW) can be
installed keeping 8hrs/day peaking (eg. West
Seti, BG 640 MW etc, KL1 60 MW, KL2 32MW)
Phase 3 Development
With upstream dams in Tila/Sinja and Karnali
~2000-4000 MW (total 6,000-8,000 MW) can be
generated.
Therefore, Alternative 1 with Dam and
Reservoir upstream followed by RoR plant
with tailrace tapping is recommended.
Benefit to downstream Project
Benefit in Capital investment
No dam, no settling basins, which is major cost
item of Civil works. NRs 15 -18 bln saving
Benefit related to Operation and Maintenance
(Annual Flood and Sediment benefit)
No or negligible outage of plant
no or negligible damage in hydro-mechanical
equipment such as turbines and accessories, 3-
4 % of revenue in most of the RoR projects
significant reduction in operation maintenance
cost, especially, due to reduced number of
manpower
If coordinated properly, the d/s project can be
operated from powerhouse of upper Project
Benefit to downstream Project
Benefit due to Catastrophic Flood events and Glacier
Lake Outburst Floods (GLOF)
With the reservoir upstream, flood is dampened
and smaller flood peak is generated. In case of
GLOF, flood peak may not be the issue but a debris
flow, with a huge quantity of bed load is
anticipated, which is trapped in the upstream
reservoir.
Benefit in revenue due to augmented flow during dry
season
If sold in the same market the Energy Price will be
much higher because of increased Firm Energy
Downstream benefit
In Nepal (Not accounted in Financial Analysis)
Reduction of dam height at least by 20-40 meters
in Karnali Chisapani Dam.
No irrigation benefit is perceived in Nepal as there
is already sufficient flow for such purpose.
India and Bangladesh (Not accounted in
Financial Analysis)
Irrigation: 500,000 ha additional (which receives
no water during dry season) can be irrigated. The
resulting net benefit according to a research
carried out in farm land of Bihar is about NRs 15
billion/ year.
Benefit due to flood peak reduction
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Cost Benefit Sharing
Downstream project Because of the multiple other
benefits, rights to Energy due to Natural Flow only ~
4,000 GWh
Upstream project rights to regulated Energy from
downstream Project- Total 7,600 GWh (1800 MW in
winter)
Savings in Capital cost in d/s project can be settled
by mutual understanding
Cost/Benefit sharing with India/ Bangladesh can be
settled with dialogues
UKP VS other Reservoir Projects
Nameof
Project
Power
(MW)
Energy(GWh)
DamH
(m)/
Rated
head
Reservoir
(mcm)
Total
Cost
(Bln,NR
s)
Cost/kW
(Mln
NRs)
Appro
x.Cost
/kWh
(NRs)
Revenu
e,Nepal
(NRs
Bln/yr)*
Dry Total Gross Live
Pancheswor
Multipurpose
Project
(PMP) 6,480 10,671 315 6,560 298 45,988 3.07 53.41
UpperSeti 140 586 140 323 45 321,429 8.45 3,516
Budigandaki 640 1,800 2,900 245 3,320 2,755 250 390,625 9.48 17,400
Upper
Karnali 1,823 3,910 11,623 230 3,900 206 113,001 1.95 69,738
UKP VS other Reservoir Projects
Study of ICIMOD: So Far no threat to GLOF
in Karnali Basin
Sediment concentration 3 times less than
other rivers such as Budigandaki and
negligible such as Kaligandaki
Much less Environmental and Social
impact, sparsely populated area (~ 800
HH within Reservoir area counted from
Topo sheet)
Generation cost too low
Transmission line long
GLOF Threats (Recent ICIMOD Study)
Suggesting storage reservoirs to be developed in
Karnali Basin.
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How to Consume Huge Energy
Energy 11626 GWh
Wet 7716 GWh
Dry+ storage 3910 GWh
Fertilizer Industry ~ 800 1000 MW
Replacing Cooking Gas by Electricity~ 600-
1000 MW
Other Industries- Cement, Metal, Agri, ..
Transportation
Electric Car
Trolley bus/tram
Electric Railway
CONCEPTUAL WORK SCHEDULE
S.N Activities
Mo 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16
1 Decision Making for UKP 3
2 Pre-Construction Activities 24
Review/update of FSR
Physical Hydraulic Modelling
Detailed Engineering Design
Preparation of Tender
Documents
Financial Commitment
3
Bid Invitation/Evaluation/
Award
4 Construction of Civil Works 72
5 Electriomechnical & AIS Works 48
6 Hydromechanical Works 42
7
Testing & Commercial
Operation of theplant 6
Year7 Year8 Year1 Year2 Year3 Year4 Year5 Year6
Financing Model
Public Private Partnership
50 % (~100 bln) from Public ;12 bln/yr
20 % (~40 bln from Govt in 8 years)
15-20% (~ 40 bln from Banks in 8 years)
15-20% (~40 bln from Power Developers/Investors)
UTK-456 MW
Chilime Group
NEA
Other Developers
NTC, Citizen Investment Trusts
10% International Investor (Unconditional, who
provides technical assistance in Grant)
More than 100%
Corrective Measures Required
License coordinates of Upstream projects to
be corrected eg. Lower Tila, TWL > 850 m
Compensate for additional
investigation/design if already finalized
Flow Regulation provision in licensing
Revision in PDA of UK900 MW
Karnali Highway (~35 km ~ 1 bln) to be
shifted to > 850 m above
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Questions/issues raised
The person naming Jewel of the crown- Who will
listen to you?
Its too late now, govt. is finalizing PDA
GMR will go away if we now will change the MOU,
the state will lose huge revenue
Doesnt believe on cost and benefit
MOU- Clauses
36. GON acknowledges that due consideration may
be accorded to GMR-ITD Consortium for the
allotment of upstream/downstream project, if any.
Questions/issues raised
37. GoN shall ensure that the development,
implementation and operation of upstream /
downstream Projects by other developers shall not
be detrimental in any way to the Project
NEA
Reservoir too small
sediment too high- so NEA discarded
Difficult Layout of Dam and Appurtenant structures
Rethinking Domestic Investment in Hydropower
Current trend- Larger no of smaller
projects
Impact
Hurdles in licensing, study and implementation
Quality of study, implementation poor (both
Civil and EM works, life time questionable)
No proper manpower to design, implement and
operate
Often very expensive due to scale and lack of
proper knowledge
Complexity for all stakeholders (DoED,NEA,
Developers)
Rethinking Domestic Investment in Hydropower
Based on Ground Reality (Preparedness,
Finance, human resources) phase wise plan
as below suggested
First Phase
Identify/study best and sizable Projects (500-2,000MW)
Implement by all stakeholders (Govt, general public, private,
cooperatives with govt. initiatives)
Leads to good infrastructure network, confidence)
Second Phase
Implementation of Large and Medium size projects (100-
10,000 MW)
Large Projects (Developers of First phase+Intl investors,
intl lending)
Medium Projects (Domestic investors, Domestic lending)
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Rethinking Domestic Investment in Hydropower
Whose Responsibility? Where to Build?
Reservoir Projects- Long-term impact
States key responsibility and player
Mostly from Karnali Basin due to reservoir life
and minimal GLOF threats
West Seti -750 MW with benefit in cascades,
Upper Karnali, Karnali, projects in Bheri, Tila)
RoR projects
From any part of the country
Upper Arun with full optimization ~1000 MW,
high head projects in other basins
Thinking Realistic Model of Federal state
Water Resource is the largest income
generating natural resource, so the states
should be planned according to Watershed with
sub-states as Himal, Pahad, Madhesh as
discussed now, leading to
Less conflicts in resources sharing
Optimum Benefit
Faster development of Infrastructure network
A key to sustainability
Conclusions and Recommendations
Nepals vast water resources development- a key to
prosperity
Cheapest energy can be generated from Upper Karnali
Project, when sizable dam/reservoir followed by RoR
project is implemented
This will lead to end of torturous load shedding and
paves path of prosperity
With proper policy each year ~ 100 bln domestic
resources can be invested if good projects are
identified and implemented
Conclusions and Recommendations
State should react accordingly- Study, PDA, institutional
framework
Wasting cheapest energy resource (irreversible impact) with a
potential of ~ NRs 50 bln each year is a Huge Mistake and deprival
of rigths of future generation
Preliminary Homework at home
Visit by Intl dam expert and Geologist together with domestic
experts
Nepalese Hydropower Development Practice- to be rethought
Planning Design (Master plan, Ranking of projects)
Financing ( Implement large projects with all efforts)
As Water resources is the largest income generating sector, New
Federal states to be conceptualized on Watershed basis- North to
South with sub-states in terms of Geography, Ethnicity, Language
etc.
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THANK YOU
Any Questions?