Report on electricity demand-supply mismatch

Abstract

Nepal has the potential to produce thousands of megawatts of hydropower, yet the country faces a continuing mismatch between the demand for electricity and its supply. In the wet season, there is a surplus that cannot all be used or exported, while in the dry season, river flows fall sharply and the supply becomes insufficient, so the Nepal Electricity Authority (NEA) imports power from India. This report studies the sector-wise consumption pattern in agriculture, commerce and households. It uses data from the NEA's annual reports and a sample survey of consumers. Households use approximately 42 percent of the total power, industry 35 percent, commercial users 10 percent, agriculture and irrigation about 3 percent, and others (water supply, street lights, transport and non-commercial users) about 10 percent (approximate figures, for illustration). Peak demand occurs between 6 and 9 p.m., mostly from lighting, heating and cooking. The study shows that the mismatch is caused by the lack of storage-type projects, delays in building transmission lines, and unbalanced use. The report suggests demand management, storage projects, more transmission lines, and a policy to use surplus power.

Introduction

Electricity is the base of the modern economy, but it is not reaching every sector at the right time. Though nearly all households now have access to electricity, outages and voltage problems are still common in the dry season and in remote places. Industrial users suffer losses when the power fails. Farmers cannot use electric pumps for irrigation when they need them most, since the supply is poor at night and in the dry season. On the other hand, part of the monsoon generation is "spilled", that is, wasted, because there is no demand or transmission capacity.

This report was prepared at the request of the Ministry of Energy, Water Resources and Irrigation to examine the pattern of power use in three sectors, namely agricultural, commercial and domestic, and to identify the reasons for the mismatch. It covers the last five years and uses national grid data. It does not examine the cost or tariff of electricity in detail.

Conclusion

1. The mismatch is mainly seasonal and time-related: a surplus in the monsoon and a shortage in winter and at the evening peak.
2. Domestic and industrial users together consume about three quarters of the total energy, and the agricultural sector uses only a small part, though its needs are growing.
3. Most plants are of the run-of-river type, so supply falls in the dry season. Storage or reservoir projects are few.
4. Delays in transmission and distribution lines, and system losses, make the situation worse.
5. The mismatch can be reduced by building storage projects, promoting electric cooking and electric vehicles in the surplus season, introducing time-of-day pricing, trading electricity with neighbouring countries, and reducing losses.

In short, Nepal's problem is not a shortage of power resources but their poor timing and management.