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NepalENERGY, NEPAL
According to government reports for 1988-89,
approximately 95
percent of energy consumed was from traditional sources:
fuelwood
(76 percent), agricultural products (11 percent), and
animal waste
(8 percent). The remaining resources consisted of
petroleum
products (over 3 percent), coal (over 1 percent), and
electricity
(under 1 percent). Alternative sources, including steam,
solar, and
wind power, also were used on a very small scale.
Despite the great potential for hydroelectric power,
most of
the energy used by the Nepalese came from its forests
(see Forests
, this ch.). The terrain, lack of a transportation network,
and the
need for large amounts of capital investment for
hydroelectric
plants and electric facilities hindered the development of
these
sources of energy. The uneven distribution of resources,
however,
indicated the importance of moving away from excessive
dependence
on fuelwood as a source of energy. Nepals' forests were
rapidly
being degraded.
In the early 1980s, more than half the electric energy
generated was used by households, and only one-third was
used by
the industrial sector. The share of electricity use by the
household sector was declining in the late 1980s. In 1985
about 6
percent of the population had access to electricity, and
by 1991
electricity was accessible to more than 8 percent of the
population. There were no regional power grids, and
electricity was
available regularly only in the capital and a few of the
larger
population centers. Approximately 15 percent of the
electricity was
generated by diesel plants.
Some estimates indicated Nepal's hydroelectric power
potential
at 80 million kilowatts--2.6 percent of the world's
capacity. Only
a tiny fraction of this potential energy had been utilized
until
1960, and by 1964 less than 3,000 kilowatts of electricity
was
generated by hydropower. By 1989, however, in excess of
230,000
kilowatts of electricity--more than 80 percent of the
country's
installed electric power--was generated by hydroelectric
power.
Although there were difficulties, the output of
electricity had
grown. For example, a 60-megawatt hydroelectric project
known as
Kulekhani I, funded by the World Bank, Kuwait, and Japan,
became
operational in 1982. Kulekhani II, an additional
32-megawatt
project, was completed in 1987. Kulekhani III, in the
planning
stages in 1990, projected an additional 17-megawatt
capacity. It
was estimated that by late 1990, generating capacity would
be at
least 237 megawatts.
Feasibility studies and engineering designs were
planned for
several hydroelectric projects and rural electric
facilities. Nepal
and India had joint irrigation-hydroelectric projects on
the
Narayani (India's Gandak River), Kosi, and Trisuli rivers.
A
feasibility study was being conducted for a dam project to
harness
the hydropower potential of the Karnali River. Inasmuch as
Nepal
could not use as much energy as it could produce, the
potential for
selling excess energy to neighboring countries (especially
India)
existed. The expansion of electric power, however, had to
be
accompanied by the construction of transmission lines
across the
country, a project requiring considerable capital.
The Asian Development Bank committed funds to establish
a
national electricity grid with hydroelectric power plants
on the
Arun and Marsyandi rivers. The Marsyandi site, a US$325
million
project with a 69-megawatt capacity, was commissioned in
1990 with
major financing provided by Germany, Japan, Kuwait, Saudi
Arabia,
the Asian Development Bank, and the World Bank. A
404-megawatt Arun
III Project was planned, but construction was not
scheduled to
begin until 1992, and completion was not expected until
1997.
The government also encouraged establishing biogas
plants with
help from the Agriculture Development Bank. More than
1,000 plants
were erected in 1988 and 1989. Although these plants were
small,
they were capable of slowing deforestation--at least for
the short
term.
To meet energy needs, petroleum products were imported.
In the
late 1980s, more than 40 percent of Nepal's foreign
exchange
earnings were spent on petroleum imports--particularly
during the
trade and transit dispute with India. In 1988-89, the
government
contracted with two foreign companies to do exploratory
drilling
for oil and gas. A joint venture of Royal Dutch Shell and
Triton
Energy received a concession to explore for petroleum in
southeastern Nepal, but they relinquished their contract
in May
1990 upon drilling dry wells. Nonetheless, further
analysis of the
area was being carried on, and other exploration blocks
were being
evaluated and traded among various companies.
Data as of September 1991
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