This is part of a recurring series in which we share reports from Harvard students who have traveled to South Asia with support from a SAI grant during the winter session.
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By Anne Shrestha, MPA-ID ’16 Harvard Kennedy School
Research work for Second Year Policy Analysis: Electricity Crisis in Nepal
Going home this time was difficult but important. Difficult because the state of Nepal –post-earthquake, amidst a worsening trade blockade that has already lasted four months –was palpably crippled and painful to acknowledge, especially considering the government’s woeful response to both the disasters, both the natural one and the one of its own long-time making. This time was important because it made for a good time to search for answers and speak with experts regarding my paper on failures in hydropower development and the electricity crisis in Nepal. But more importantly, experiencing this allowed me to be on the inside of the crisis; it added weight to my understanding in ways that no amount of news could.
The severity of the electricity crisis is currently amplified by the fuel shortage. With LPG cooking gas only available to the politically connected, people have restored to electric cookers. But with over 15 hours of power cuts everyday, it’s hard to bypass the problem. So, even urban households have resorted to cooking with firewood. Mine is no exception. I had been told about this before I arrived but it only hit me when I realized that our brick and mortar house had acquired the smell of a logwood cabin. Having worked in the U.S. electricity sector, I know firsthand that many of the thousands of American power plants each have generation capacity greater than the total estimated demand of Nepal! It is regrettable to think that the magnitude of this crisis could have been avoided with only one large hydropower plant. So this winter, I shook off some frustration and set out to hear from experts in hydropower about why we have reached this point as a nation.
My goal was to learn why so many projects had been stalled in the pipeline and what contractual weaknesses could enable deals to be honored and plans executed. I was able to learn about these from several government officials at the Investment Board, the National Planning Commission, a lawyer who helped draft hydropower policies, activists and environmental scientists from environmental NGOs and the Nepal Electricity Authority, as well as from one of the lead private developers (IPPAN, Chilime) in the industry. I was able to string pieces of stories and perspectives together and understand the different binding constraints. In summary, I found that highly underestimated demand is at the top of the several layers of constraints. The next is transmission, the financial health of the only utility in the country and then time-inconsistency problems in PPP contracts. Underlying all this, the political volatility has been posing significant hurdles to the development of the sector.
But more importantly, I was able to get a deeper understanding of the political divide and regional geopolitics. I learned that there is a fundamental disagreement about the feasibility of a hydro-led development although the discourse that has dominated popular perceptions and the media is the one that paints a far too easy and optimistic picture of the possibilities of a fast-track hydro-led development. However, the complications inherent in the dominant discourse are evident in the two decades of failed attempts. They highlight the importance of i) rethinking why, how, when and for whom hydro resources should be developed as a country and as a region, ii) to understand issues of ownership versus rights of a river basin that flows through three countries, and ii) integrated development using collective expertise and thoughtful attention of economists, engineers, environment and climate scientists, agriculture and power experts, hydro-diplomats as well as policy makers.
I might have returned from this trip with more questions, but has added a crucial contextual dimension that will be central to my analysis – and I thank SAI for the support.