Universe

At present, Industry Four and Industry Five are coming forward based on new technology for industrial production all over the world. Both of these are technologies where, in addition to making the most of human labor, machines can collaborate to increase production. The cost of production can be reduced. The standard of living of the common people can be improved. Now the world is moving in that direction.

The technology of Industry Four and Industry Five consumes a lot of energy. Today, the countries that produce and consume the most energy have a better standard of living, their own prosperity is higher and they are moving forward in the world.

There is a very close relationship between energy consumption, people’s living standards and the country’s economy. When energy consumption increases, people’s standard of living increases. As energy consumption increases, national production increases and economic growth accelerates. Countries that have been able to increase their energy consumption are either underdeveloped or newly developed. From that point of view, energy is very important right now.

There is also an estimate that in the coming days, there will be a war around the world over the sources of energy production and storage. Everywhere in the world now, the conflict is seen in rare earths, which can store energy, who can take control of the most valuable minerals, who can take control of their resources. The major powers seem to be working to expand their access to such resources and maintain their control over the supply chain.

The world is serious about not only the production of energy, but also the storage and consumption. On the other hand, how can we be more productive by using energy efficiently? Artificial intelligence can be used to use energy.

It takes a lot of energy to produce cryptocurrency. In such a situation, many countries of the world have invested. They have developed technology. They have encouraged their citizens to do so. Some countries keep such technology secret to other countries in order to secure their control over it.

In view of all this, energy is very important. There are two trends globally when it comes to energy sources. There is a resource like this, but it should be used. On the other hand, we need to use as little energy as possible that will have an adverse impact on the earth’s environment and make climate change more seriously difficult. We want to reduce carbon emissions and invest in renewable energy and clean energy as much as possible.

Due to the global climate change crisis, the international community is now moving towards renewable energy in clean energy. Some countries have said that the source of fossil-based energy is also the source of the earth. It also means that it should be used in a way that reduces carbon emissions. In the context of Nepal, we do not have many fossil-based energy sources. A small quantity of methane gas has been found in Dailekh. We still have to invest a lot more to use it.

Nepal Energy

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We have clean energy, renewable energy sources. We have been debating this for a long time. As this sector was not open until 2048 BS, Nepal could not work in the production of clean energy, renewable energy. There was a period when we had to face load-shedding for 15÷16 hours a day.

In recent times, the private sector has been encouraged. A flexible policy has been adopted in the private sector’s loan investment for renewable energy production. For this, the share of production has been gradually increasing due to encouraging banks and financial institutions to lend money. Now, the private sector has increased the production of electricity.

At present, the production of the private sector is much higher than what is made in the state-controlled and joint ventures with the state. Of this, more than 95 percent is hydropower-based. Nepal has wind energy as well as solar energy. Which we have not been able to identify and use so well so far.

Geothermal is one of the three sources that Nepal has yet to explore. It is found in some places in our high Himalayan regions. Nepal can also produce renewable energy from this source. If we can use natural gas without having an adverse effect on the environment, it can also become a source of energy.

Looking at all this, Nepal is one of the major countries that can produce energy and get a lot of energy production. Although we are small in terms of size, Nepal can produce more in terms of per capita production.

In 2035, 28 TAG_OPEN_strong_69,500 MW of electricity will be generated. It is estimated to cost around Rs 61 trillion. The quantitative target that the country has set and the investment that is said to be required is not a goal that Nepal could achieve. It’s possible. Because this sector is not going to be a loss. Once you invest in this sector, you will get returns for years. You don’t have to invest more for years.

Friendly environment

There has to be a conducive investment environment to generate more electricity. The government should have the necessary infrastructure and planning to produce in all sectors. There should be road infrastructure, electricity transmission line infrastructure and land needed for it. If this is not done, the investment will not be successful even if the private sector invests. The government should pay attention to this. The government should encourage the private sector as much as possible.

In terms of policy, producers are now entitled to tax exemption for 15 years to incentive. It encourages investment. Tax exemption is not a solution in itself. But it has created a conducive environment. There are still disputes about the use of forest and land by the projects and the sharing of benefits with the community.

In some places, it is seen that I need free shares before the promoter starts the work. There have been demands that the construction of schools and roads should be built before the producers start the work. Such demands increase the cost to investors. Ultimately, it is the common people who pay. Because electricity is consumed by the common people. Nepal is still lagging behind in creating a conducive environment.

Energy itself is an important raw material for the country to prosper. It is better to use such raw materials in the country as much as possible than to export them. Energy-efficient industries should be set up in the country. Aluminum processing, solar panel manufacturing, chemical fertilizer factories or similar energy-efficient industries should be opened. If the data center can be made to leapfrog artificial intelligence (AI), then this will be not only the production but also the consumption in the country. After that, if the value addition can be exported, then the country will also benefit from exports. Nepal’s efforts so far to move in that direction have not been enough.

In the current situation, Nepal is exporting electricity. But exports should not be Nepal’s priority. Instead of exporting, we need to add energy-efficient industries. Energy-efficient industries and businesses should be promoted. For this, some policy facilitation has been made for energy production. Similarly, there is a need for policy facilitation for those who invest in infrastructure.

There is a need for the government to facilitate both energy intensive services and intensive production and encourage investors to invest in them as well. In this regard, the Private Power Producers’ Association of Nepal (IPPAN) has tried to create a conducive environment to remove the obstacles by holding policy discussions and collaborating with the government. IPPAN deserves thanks for that.

Every body of the government is and should be committed to implement the policy and to translate speech into words, words into action or deeds.

Achievable Target

The government is planning to generate 28,500 megawatts of electricity by 2035. It is estimated to cost around Rs 61 trillion. The quantitative target that the country has set and the investment that is said to be required is not a goal that Nepal could achieve. It’s possible. Because this sector is not going to be a loss. Once you invest in this sector, you will get returns for years. You don’t have to invest more for years.

Nepal is prone to geological risk and in some cases, the impact of climate change may affect the hydropower dams and affect the flow of water. But that risk has not yet been seen. All the investments that have been made so far have been done in anticipation of such losses in order to minimize the risk. As a result, the investment of the general investor is safe. The return on investment is also safe. Therefore, investors are also excited to invest in this sector. Therefore, it will not be difficult for Nepal to raise Rs 6100 billion to generate 28,500 MW of electricity.

It is not a matter of debate now how much is the share of the government and the share of the private sector. Each hydropower project is a public-private partnership (PPP). No hydropower project or renewable energy project can be built without the help of public bodies. The land should be given to the government. The government should give the right to cut down trees. The government should construct the transmission line. The government should construct the road to reach there. That is why the government and the private sector collaborate in such projects.

Lately, the private sector has been encouraged. A flexible policy has been adopted in the private sector’s loan investment for renewable energy production. For this, the share of production has been gradually increasing due to encouraging banks and financial institutions to lend money. Now, the private sector has increased the production of electricity.

PPP is not just about the participation of the private and public sectors. It should not be understood that equity participation is only PPP. There is cooperation in the work. The Nepal government as well as the local government has invested in it. Some are invested by the state. I don’t see that there will be a shortage of resources on the part of the government if all these investments are made together.

The first thing we need now is willpower. Both the private sector and the government sector should have a strong will to achieve the target. The government should create a conducive environment for this. If the government simplifies the procedural process, does not remove the compulsion to wait for years to get approval, then the work is done at once, after getting a license, it has to go through the initial process to add it again if some minor things have expired, if the PPA is not done on time, if the PPA is not done, the market is not opened as an alternative after PPA, and does not open the way for the private sector to serve the private sector in the transmission line in a smooth manner. If we don’t open up these barriers, we won’t be able to achieve the goal. It is not so difficult to meet the target of 28,500 MW if all the work is facilitated.

Possible from national sources

A lot of courage was taken during the construction of the Upper Tamakoshi Hydropower Project. At that time, foreign assistance was expected during the construction of the Upper Tamakoshi Hydropower Project. Not at that time, but the government thought that the project could be done with national resources.

There are projects like Budhigandaki and Upper Arun that have been stuck for a long time. These projects should be expedited. In the case of the private sector, there are some procedural hurdles. Now, if a company that has made a profit while constructing the project says that it will issue the right shares, various agencies are stuck saying that it will not be available.

If the financial situation is good, audited, there is no risk, then the government bodies, the regulatory agencies should be a little more lenient in such things. There is a weakness in it. It needs to be improved. If that happens, the private sector can build even bigger projects with a capacity of more than 300 MW.

When the 5 MW project was constructed 10 years ago, it was considered a big project. At present, 300 MW is considered large. Five years from now, the project will seem normal. Nepal is now moving in this direction.

(From Finance Minister Khanal’s article Energy Prosperity Souvenir 2082)