Electricity Reforms and
Regulations
in
Nepal
Navin Dahal
South Asia Watch on Trade, Economics &
Environment (SAWTEE)
Outline
 An overview of electricity sector in Nepal
 Reforms and Regulations in the Power sector
 Conclusion and Recommendations
Programme
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An overview of electricity sector
 Ranks 2nd in terms of water resources after
Brazil on global scenario.
 Hydro-power potential of 83,000 MW.
 Economically viable-42,000 MW.
 Only 40 percent of Nepalese have access to
electricity.
 8 hours per day load shedding
 Additional power generation will not be
sufficient to meet demand
Programme
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An Overview
 Electricity rates in Nepal are among the highest
in the world.
 Hydro power sector has remained the state
monopoly for a long time.
 Concentration of generations, transmission and
distribution (NEA)
 Single Buyer dominates the market
Programme
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Installed Capacity (MW)
Source
Capacity in MW
1. Nepal Electricity Authority
a) Hydro
408
b) Thermal
55
2. Private Sector
148
Total (1+2)
611
Source: NEA, FY 2063/64 (FY 2006/07)
Programme
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Electricity consumption and sales
(in GWh)
2002
2003
2004
2005
2006
2007
Domestic
557.94
617.11
676.365
758.189
805.72
911.51
Non-commercial
78.22
80.736
83.012
100.543
95.29
101.15
Commercial
90.426
92.741
108.122
109.308
120.3
143.88
Industrial
596.677
629.505
689.799
764
784.55
877.26
Water Supply and Irrigation
29.283
29.983
31.671
49.98
45.5
49.43
Street Light
39.517
45.803
55.196
54.861
63.24
69.48
Temporary Supply
0.282
0.348
0.251
0.393
0.87
1.28
Transport
5.635
5.53
5.471
5.803
5.65
6.56
Temple
2.476
2.811
4.111
4.58
4.77
4.77
Community Sales
5.717
4.74
5.581
6.034
9.18
14.57
Total (Internal Sales)
1400.456
1504.567
1653.998
1853.691
1936.07
2179.89
Bulk Supply (India)
133.857
192.249
141.235
110.702
96.55
78.25
Grand Total
1534.313
1696.816
1795.233
1964.393
2032.62
2258.14
Category
Note- Provisional Figures, Subjected to Final Audit
Source: NEA, FY 2063/64 (FY 2006/07)
6
Programme
Growth of Consumers
Particulars
2002
2003
2004
2005
2006
2007*
Domestic
848540
930554
1010719
1113740
1229750
1335748
Non-Commercial
8629
9722
9865
9950
10010
10385
Commercial
3898
5317
5454
6000
6170
6520
Industrial
18789
19833
21374
22500
23020
23963
Water supply
251
305
352
370
380
403
Irrigation
1353
1721
2557
3400
6450
13248
Street Light
1048
1229
1437
1500
1550
1622
Transport
49
48
48
50
54
54
Community sales
1
1
15
35
58
107
Total (Internal sales)
884530
970606
1053930
1159850
1277442
1392050
Bulk Supply (India)
5
5
5
5
5
5
Grand Total
884535
970611
1053935
1159866
1277447
1392055
Source: NEA, FY 2063/64 (FY 2006/07)
Note: *Provisional Figures; subject to final edit
Programme
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Net system losses
(including Transmission and Distribution loss)
Description
Net system losses
(%)
2005/06
25.12
2006/07*
24.94
Increase (Decrease)
Difference
Percent
(0.18)
(1.00)
Source: NEA, FY 2063/64 (FY 2006/07)
Note: *Provisional Figures (Subjected to Final Audit)
Programme
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Policy and Acts
Hydro Power Development Policy, 1992
 Opened doors for private sector involvement in power
generation
 Electricity Act, 1992
 An act to as per the Hydro Power Development Policy 1992
Programme
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Policy and Acts
 The Foreign Investment and Technology Transfer Act,
1992
 An Act made to provide for matters relating to foreign
investment and technology.
 The Industrial Enterprise Act, 1992
 An act made to facilitate industrial enterprise.
Proposed Electricity Act
 Unbundling of NEA: Separation of generation,
transmission and distribution
 A separate body for the regulation of this sector
known as National Electricity Regulatory
Commission
 DOED – licensing of new generation, transmission,
and distribution projects
Distribution
 Hydro Power Development Policy, 1992 has
mentioned that the electricity generated from a
hydroelectric project must be distributed through
the NEA.
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Regulatory Body
 Department of Electricity Development (DOED)
under the Ministry of Water Resources (MOWR)
regulates the electricity sector.
 DOED is responsible for assisting MOWR in the
implementation of overall government policies
related to the power/electricity sector.
 Tariff Fixation Commission
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Conclusion
 Independent regulatory body.
 Un-bundling of NEA on generation ,transmission
and distribution.
 Encouraging private investors.
 Enforcement of new electricity Act.
 Creating conducive environment for investment.
Thank You
Programme
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