"The reason we haven't been able to revolutionize the Hydropower sector yet is because we’re looking at it from the wrong angle”; Interview with Gyanendra Lal Pradhan, Hydropower specialist and entrepreneur

Prelude: Debunking the myths in Hydropower Sector of Nepal with Gyanendra Lal Pradhan, Hydropower especialist and entrepreneur

Being the second richest country in water resources, why do you think it took us so long to revolutionize the hydropower sector?

The first thing is we aren’t serious enough. On what basis are we second? We are sitting between two large countries with larger natural capacities than ours, so when we say we are second richest country we need to be sure if we really are. Just cause somebody said it, doesn’t make it true or valid. India has a capacity for 1,56,000 MW, similarly China has 7,00,000 MW and, we stand around 83,000 MW only. So maybe we are 5^th or 6^th but definitely we’re not second.

Similarly, as far as hydropower sector is concerned the general perception is to focus on the energy generation. Whereas the fact is, the uses and importance goes beyond just production of electricity. There are three basic benefits of Hydropower:

1. Water

The water used in hydropower projects aren’t consumed, so even after energy production we have the same amount of water left. This water, with proper storage, can be used for household purposes for nearby localities, irrigation and numerous other purposes.

2. Peak power energy and Regular energy

The regular energy production is dependent on water. The energy is generated only when the water is available. In dry season when rivers go dry, there is no energy generation. But if we use peak power energy generation system by building high dams, it can function as a battery. We can store the water and generate energy as and when required. Thus if we’re able to capitalize on that, our capability of energy generation will go beyond 156000 MW.

Coming back to the question, as far as revolutionizing the Hydropower sector is concerned, the major hindrance is our mentality. Our market is need based, so we look for answers only when we really need it. Load shedding has come and gone for more than 10 times till now. Wouldn’t it have been better if we’d started constructing other hydropower projects right after Chandra Shumsher introduced it for the first time? When he introduced Hydropower, even India and China weren’t producing it commercially. This is the main problem, we fail to see the future potential until it becomes a necessity and we HAVE to do it. The large projects have come into our country only during the recent 2 decades or so.

The worst thing in this country is that we don’t follow the success stories. For example in Passport office earlier we had to stay in line overnight for passport, but now you can get it in 2 hours. Such improvement has become possible even when 3 lakh people are leaving the country every year. On this matter we’ve even left behind UK, US or China. But the irony is why we aren’t doing the same with other departments where we have to stay in line for driving license, tax payment, land ownership transfer, citizenship certificate etc..

Similarly, being a small economy we have a huge opportunity to boost up our GDP growth rate from Hydropower sector alone. Our country’s GDP is 250 billion USD and by addition of Tamakoshi project alone the growth rate climbed by 1%. So if we’re able to add few more hydropower projects of same magnitude then we can be the highest GDP growth rate economy in the world. This growth, will create two things. One, our economy will be able to grow in pace with the rest of the world. Two, people will know of our nation. Then the perspective investors looking at such attractive GDP growth rate will flow into our economy bringing FDI and a lot of new opportunities.

The other problem that has paralyzed our development is our tendency to choose a hotel just by looking at its toilet and disregarding other strengths of the hotel. What we should be focusing is on water, but we are giving higher priority to the regular energy generated from it. Come on, electricity is just a byproduct, if we can capitalize on the water we have we have endless prospects in our country. Our valued possession is water, not the energy to be generated from it. Energy can be produced from many other sources like sun, bio-wastes, wood, air etc. If we were to focus on the energy only, solar is much more cost efficient. We can currently buy electricity from solar at Rs 4.8/kwh, but in hydropower we will never be able to do the same.

So even in future if we keep on focusing on the energy we’ll never move forward.

To highlight the significance of water, let’s consider the total amount of water available to us. Of total, only 3% is pure water, out of which 70% is concentrated in North Pole, South Pole and mountains. Fortunately we are rich in mountains and glaciers. So 2.1% of remaining volume of fresh water is gone and the remaining 0.9% comprises the total pure water underground, in atmosphere and in surface. 60% of the 0.9% is in atmosphere, which leaves us with .36% of pure water and that is precisely why it is extremely valuable to us. So if you still think Hydropower is just for electricity generation, it’s time to wake up. We have countless other opportunities that are waiting to be uncovered.

Similarly, the other reason why we need to focus on water lies on the trick to change weakness into strength. Water is creating a lot of problem in countries like India and Bangladesh, even in Nepal during the rainy season as flood. So without making strong high dams, there’s no other way to eliminate the threat of flood. Once the dams are made, energy generation is the obvious second step. In this way we can find our way around the problems and create opportunity for ourselves.

What are the challenges and opportunities faced by Hydropower Developers in Nepal?

Challenges

The first challenge is, despite the fact that we say we’re open to investments, we aren’t very investment friendly country neither for foreigners nor for Nepalis too. Whatever success I’ve achieved till date is 20% of what I was capable, because 80% of my time was wasted on bureaucracy and multiple visits to government offices which could’ve been done at one go.

The second challenge that I find is, “No one is serious enough. All the promises are limited to lips and those words aren’t transferred to head, heart and limbs.”

The third challenge is our inability to explore, understand and capitalize on our potential. It’s not that we aren’t naturally rich, we actually are. The gap lies in our capability to commercialize it and derive optimum benefit from it.

The fourth challenge is our inability to conjure and implement integrated plan. What we currently need is a full-fledge ready-to-implement plan. First-of-all we need to design river basin, which will then facilitate water storage and then after water storage we need to devise a standard to decide when to produce and when to hold the reserve. Then in case the water exceeds the storage capacity, what to do with it? Should we use it to irrigate? If yes then at what places, by how much?

All these activities are inter-related and that’s why they must come into one integrated plan.

The ffifth challenge, or even the most difficult one, is our psyche and the way we think. We don’t start to choose among alternatives by analyzing its infrastructures or services or facilities or rooms; rather we make our decision by looking at benefits that matters the least.

Opportunities

The situation or trend in our country is that we don’t actively seek for opportunities, we don’t bother to create one. We do it only when the NEED arises. Hydropower came only after years of load shedding. Why didn’t it come earlier? Everyone knew we are rich in water resources? And hydropower isn’t like producing garments that will come into operation with a year or less. Many Hydropower projects have come and most are still under construction while we are buying 400MW from India.

Once all ongoing projects are done maybe we’ll be able to produce 10,000 to 11,000 MW electricity but still that wouldn’t represent our full potential. So if things are going to remain the same, Hydropower can never be as revolutionary as we expect it to be. Despite that output, the projects are going to be costly like Tamakoshi and time consuming too. The Tamakoshi project had an estimated cost of Rs 36 arba, which reached 50 arba while completion. This is not a meagre figure, a 40% cost overrun is that justified? Some of it might be cause of the Earthquake but there has been no authentic analysis if the entire overrun was because of the quake. The point I’m trying to make is not that Tamakoshi performed badly but the fact that Hydropower is such a sector that can’t be completed with the predetermined cost and time. A lot of external factors come into play that can in one moment change the entire mathematics.

So yes, Hydropower is a very vital sector for the development of entire country but we lack sync between the commitment we utter from our lips and the actions that we do.

The good news, however, is that even though pushed by need we’ve started these projects. From the current undertakings, we’ll be producing 2000 MW approximately from private sector and 1000 MW from Government sector. If these projects finish within estimated time then we’ll have no problem for next 5/7 years.

The third part of this interview will be published tomorrow. Please remain updated with our website to know more about hydropower sector.