Government Failing to Implement Energy Development Roadmap

Kathmandu : It has been almost a year since the government made public its Energy Development Roadmap. Through the roadmap, the government had set a target of increasing Nepal’s installed electricity capacity to 28,500 MW by 2035, of which 15,000 MW would be exported and 13,500 MW consumed domestically.

Although the roadmap set a goal of exporting 10,000 MW of electricity to India, energy producers have stated that the government has not been able to make sufficient progress to achieve this target.

According to them, the government has failed to move ahead by resolving the many issues present in the energy sector.

Independent Power Producers’ Association of Nepal (IPPAN) President Ganesh Karki said that investors have been discouraged because Power Purchase Agreements (PPAs) have been stalled for a long time.

According to him, the government has not been able to move forward in line with the vision presented in the energy roadmap over the past year. Energy producers have had to face numerous problems one after another, and Karki stated that the government’s overly strict policies have made it very difficult to work in accordance with the roadmap.

He said, “The energy roadmap provided a clear vision of what needed to be done. But a year has already passed since its release, and looking at its implementation, there is little confidence that it will be fully achieved. When the roadmap was unveiled, the public was very excited. If we do not move forward with the vision that has already been prepared, not just this sector but no sector will move forward.”

According to IPPAN, if the government is to follow the roadmap, the Ministry of Energy must coordinate with the Ministry of Forests to facilitate EIA/IEE approvals, bring forward a plan to increase electricity consumption, allow private sector participation in transmission line construction, expedite the listing of hydropower companies that have been stuck at the Securities Board despite approval from the Electricity Regulatory Commission, and open the way for private sector participation in power trading.

The Department of Electricity Development must extend generation license periods to 50 years in accordance with the Electricity Act 2049 (1992), issue generation licenses aligned with RCOD timelines, and revise licensing guidelines to discourage arbitrary fines and penalties.

As for the Nepal Electricity Authority (NEA), which the private sector frequently clashes with, it must advance PPAs for projects that have already applied for connection agreements and PPAs.

Similarly, the RCOD deadline must be extended by three years, PPAs for projects up to 10 MW must be immediately processed, the contingency provision must be removed, hydrology penalties must be abolished, energy tables must be updated, and the provision that allows projects under construction to automatically get PPAs when their capacity is increased by up to 25 percent must be continued, Karki said.

According to Karki, NEA has been holding back PPAs for a long time, citing a lack of market for electricity, which has demoralized private investors. He said that IPPAN officials recently met with Energy Minister Kulman Ghising to inform him about this issue.

During the meeting, Minister Ghising stated that the private sector would be further encouraged to invest. He said that if regulations and directives need to be changed, the Cabinet will do so, and if the law itself needs to be amended, it will be done through an ordinance.

Ghising assured that the ministry is aware of issues such as PPAs, RCOD deadline extensions, and contingency provisions, and expressed commitment to taking initiatives to resolve them.