New electricity act in limbo; bill remains stranded for the past one and a half decades

The government has failed to bring in the new electricity act even in one and a half decades of finalizing the related draft.

Speaking at the official launch of the third print edition of the Urja Khabar magazine on Saturday, the stakeholders and experts of the sector said the dilly dallying in the enactment of the law has impeded the desired development of the country’s energy sector. Currently, the electricity bill is at the purview of the National Assembly.

The bill to amend the Electricity Act-1992 has envisioned amending and integrating existing electricity laws. It has maintained provisions to provide licenses to the private sector to trade in electricity within and outside the country. But the bill has remained undecided in parliament.

According to stakeholders, in the lack of related law, the Nepal Electricity Authority (NEA) has been unable to sign new power purchase agreement, private sectors have failed to receive permission for power trade and the country has failed to expand electricity market both in the domestic and international arenas. They urged the new government to play an effective role in solving the existing problems underlying in the country’s energy sector.

Dilli Bahadur Singh 
Chairman, Electricity Regulatory Commission (ERC)

Inadequate resources available with the commission have impeded the pace of devising the necessary legal framework. Change in political condition and government actions have failed to provide a suitable environment to carry out necessary work. 

Although the government has delegated the ERC an extensive working area, except to issue electricity producing licenses, we are unable to enjoy the work freedom due to a shortfall of manpower. If the electricity act is approved, it will define clearly the role of ERC along with taking electricity development to a multi dimensional task.

Dipak Gyawali 
Former Minister for the Water Resource and expert at the Nepal Academy of Science and Technology 

The government needs to first sort out whether electricity is a private, public or social good to formulate separate strategies accordingly. It may not be feasible for Nepal to achieve economic prosperity by selling electricity to India.   
 
There is a high demand for electricity in India, but there is no energy market for us. As long as, we have to depend on the jurisdiction of the southern neighbor to sell our electricity, how is the market there secured for us in the long term?

The electricity bill was registered in parliament in 2009, while 142 points were amended over the period. However, the bill has not been given a way out on various pretexts. Even the ERC is left stranded in the absence of the related electricity act.

Dr. Madhusudan Adhikari
Executive Director, Alternative Energy Promotion Center 

The changed situation in the government system has created a lot of problems. The bureaucratic system from center to ministries, existing red tape and reluctance to assume responsibility has impeded the growth of the energy sector. Apart from hydropower, there are many sources while talking about the energy development. We need to go together with other dimensions of energy development. 

Umesh Prasad Thani
Managing Director, Nepal Oil Corporation (NOC)

For decades, the NOC has been connected with the major source of government revenue. At present, many challenges are associated with the management and use of petroleum products. The government’s concerns are only with pricing and profit/loss in petroleum business. Now, NOC should be taken under the Ministry of Energy, so that we can work comfortably on the management of fossil fuels along with transforming it into electricity usage. 

Rajendra Dahal
Senior Journalist

We have been writing on energy and water resources for a long time period. Energy and water resources should be viewed separately. The media needs to raise issues related not only to hydropower, but also with other energy sources like solar, wind, coal and petroleum imports. 

Dr. Krishna Prasad Dulal
Former Director, NEA

The government needs to facilitate private sectors’ contribution in electricity development. For long, new electricity act cannot come online. Due to this reason, there is slow pace in hydropower and solar projects being built by the private sectors. Power Purchase Agreement has stopped whereas the electricity market has gone uncertain. The government should bring in the new Electricity Act as soon as possible.  

Dr. Mukesh Raj Kafle 
Former Managing Director, NEA

Currently, a total of 2,355 MW of electricity is supplied in Nepal’s distribution system. Provided everything goes normal, an additional production of 900 MW has been projected to come online by the end of this fiscal year, which will increase our capacity to 2,300-3,300 MW. 

Surprisingly, the present government has reduced the target of electricity production. While the target for 15,000 MW was already set to be produced by 2028, the new government has said it will produce just 6,500 MW within the stipulated time. 
There is a need for new electricity act to solve the problems underlying in the sector. 

Hitendra Dev Shakya
Former Managing Director, NEA

We have arrived at the present situation of energy development due to result-oriented outcomes of our efforts for a long time period. We are facing a challenge to increase electricity consumption, which however cannot be achieved by just chanting verbally. We should work notably in the line to increase electricity demand. 

Kumar Pandey
Private sector hydropower producer

We have been facing the problems related to forest, environment and land use while constructing the energy-related projects. Until the new electricity act comes online, electricity development could not take the desired pace.

Surya Prasad Adhikari
Energy Researcher

Both the government and private sectors have been going through a complex situation. Absence of PPA, shortage of electricity markets and failing to construct adequate infrastructure, among many others, have adversely affected the targets of energy development and energy consumption. The main problem is with a lack of clarity at the policy level.

Semanta Dahal
Lawyer 

It is unfortunate not to get electricity act for the past 14 years. Only the act can open a door for development to energy. The formal legal document can direct energy supply to regional and other international market. Along with the act, we need to strengthen institutions like the ERC. 

Bhoj Raj Poudel
Infrastructure Researcher 

There is a need for taking forward an extensive discussion on development of electricity and energy sector, to cater them to achieve a notable economic gain.