A Glimpse of Arun 3 Hydropower Project Nepal

Get here some facts and glimpse of Arun 3 hydropower project of Nepal. We have published here some points to remember about Arun3 hydropower project of Nepal.

A Glimpse of Arun 3 Hydropower Project Nepal

A whole generation in Nepal has been consumed by the seductive dream of the 83,000 MW hydro potential that the cascading waters of this land is supposed to hold and the hydro-dollar bonanza it is supposed to get after exporting it to India. The chimera endured for almost 30 years, but is now showing signs of turning into a cruel nightmare of recurring load­shedding and backbreaking electricity price hikes. In retrospect, Nepal’s failure to develop seems to follow from being mesmerised with the physics of falling water while ignoring social institutions that must harness and harvest the natural bounty. If Nepali hydropower is to see any meaningful development, the coming generations in Nepal will have to move beyond the euphoric physics of falling water to the grim social context in Nepal as well as the northern Ganga plains within which such an endeavour must be sustained. The physical fact of falling water will remain there till the Himalaya erode. However, it alone cannot become a resource unless Nepali society and its inherent weaknesses, as reflected in the prevailing institutional context, are brought to the centre-stage of national discourse. Such a review has to be through technology assessment of an argumentative style rather than a tame procedural one.


Arun 3 Hydropower Project Nepal water resource

New (but cheap) hydropower generation must come on line fast The deficit scenario that the central grid is facing in 1991, and which is projected to last well into the next century, means that promises of a Utopia in the distant future will hardly keep today’s starving economy alive. The demand in the Central Nepal Power System has reached approximately 215 MW whereas the reliable hydro capacity is only about 205 MW in mid-winter. The next officially planned capacity addition – Arun-3 – is not before the year 2005 except in the most optimistic of projections, but there are other viable alternatives that can come on line much faster. It has been realised only after the 1990 re-introduction of multiparty democracy that there are at least 80 medium-range hydro sites identified in Nepal totalling about 1340 MW (MWR 1991c). Of these, some 38 sites totalling 875 MW and located mostly in the eastern half of the country are relatively more accessible than Arun-3. Indeed, of these, some 20 sites totalling 417 MW are located mostly within 10 km of existing roads, rarely more than 30 km away, and can be developed relatively quickly.

see: 100 facts about Arun 3 Hydropower Project Nepal

Hydropower must be reliable in quantity and quality. Failure to provide either will cheat the economy of its future. Without contractual certitude, the fear of future load-shedding will not be banished and investments will shy away. The past dispensation created a state monopoly in hydropower development by nationalising smaller private power producers but this has not resulted in more reliable power. Besides insufficient quantity, quality of electrical supply is also poor: voltage drop of 20 percent or more and frequency drop of more than 0.5 Hz are quite common, resulting in nationally yet-to-be scientifically assessed equipment damage. Similarly, frequent unannounced outages result in loss of work time and hence industrial productivity. All this is a result of a state monopoly with no contractual accountability to the consumers to supply power of reliable quantity and quality, a flaw that must be redressed legislatively and administratively with the inclusion of punitive measures.

Regional balance must be maintained in developing generation capacity for both socio-political and techno-economic reasons. The people of Nepal from the east to west must feel that they are part of the overall national development

process, and this will occur if important symbols of development such as hydel plants are constructed in their regions. Such a political reality has arisen primarily because of the past propaganda of over-promoting water resources as the only hope of development in this country. This political reason for regional balance is strengthened by a strong technical reason: the existing 132 kV national grid cannot transmit adequate amount of power from one end of the country to the other without heavy technical losses. Medium-sized generating stations at different points from east to west not only reduce transmission loss and solve reactive power problems but also increase reliability in case of disasters. Such stations from east to west will make it possible to use the existing 132 kV transmission line for quite some time into the future and defer investment in a new 220 kV grid, with consequent economic savings. The argument that regional balance does not apply to power generation, that power should be generated where it is cheap and must be transmitted to where it is needed is simplistic economics: it ignores portfolio diversity, risk resilience and ‘inefficiency of size versus economy of scale’ in a country like Nepal.

Large-scale export potential should not be entertained without first achieving a strong domestic base. Lacking such a foundation, Nepal will not be able to negotiate an attractive price with energy distributors of basin countries. If Nepal’s needs are adequately met from development efforts within Nepal, she will be in a more comfortable bargaining position than if she is in a situation where her crying internal demands have to be met, especially in border towns, with the generosity of the Bihar and UP electricity boards. All large projects have export components that overwhelm the domestic demand; and, if complicated benefit-sharing issues have not been agreed upon prior to construction, then Nepal will be entering a risky negotiating trap. While the study of mega-projects needs to be carried out with intellectual vigour and a healthy dose of scientific scepticism, what should seriously be pushed forward is a strong medium-scale hydroelectric development programme that matches Nepal’s own demand growth of 15 to 20 MW per annum.

See : The Revolution of Arun 3 Hydropower Project Nepal

Arun is not cheap either in terms of investment or in terms of risks. Construction costs are much cheaper for many other projects; and, seeing how contractors have ‘front-loaded’ their bids on the road portion (making it five to six times more expensive than any other road construction in the Himalaya), one is left wondering if they will finish the tunnel, dam and powerhouse without massive cost escalations in the future. Insurance schemes are being pushed for this project that will essentially create a market for insurance multinationals; and Nepali consumers will end up paying premiums that will be reflected in their tariffs when they should actually not have to pay anything if their risks are minimised and spread in smaller projects from east to west. The Nepali Congress promised such a policy at its convention in Kalbalgudi but has failed to deliver.

A serious part of the cost of Arun-3 is the ‘crowding out’ it induces in other sectors of the economy. It has already occurred because Arun-3 soaks up so much of the available resources that development proposals of other ministries are being dropped from consideration by donor agencies. The situation has become so bad that officials in ministries other than water resources, freshly back from Washington DC, have been calling critics of Arun-3 to say that something must be done to stop Arun-3 because it is hampering their development plans. Donors are also pressing Nepal to ‘prioritise’ only 300 development projects (and dump the rest, which is about another 300) to accommodate Arun-3 within the allowed ‘resource envelope’. The Paris Nepal Aid Group meeting for the summer of 1994 was postponed because of the inability to decide on Arun-3 funding and procurement packages between major donors. It is claimed that there is a macro-economic study but the ministries of finance and water resources have not been able to produce it publicly or have it independently scrutinised.

this post is copyright @ Er. Dipak Gwali

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