Nepal saw a 7.56 percent growth in peak hour electricity consumption during the last fiscal year. According to the Nepal Electricity Authority (NEA), peak power demand of the Integrated Nepal Power System (INPS) in 2014-15 stood at 1,291.8 MW, with 585 MW load-shedding. In 2013-14, the figure was 1,201 MW.  

The NEA’s own hydropower projects supplied 357.68 MW, independent power producers (IPPs) contributed 124.71 MW and 224.41 MW of electricity was imported from India.

Peak demand or peak load is an energy demand management describing a period in which electrical power is expected to be provided for a sustained period at a significantly higher than average supply level.

The NEA claimed that it had succeeded in minimizing load-shedding hours despite a huge surge in power demand.

“Given the power supply options, we had projected a maximum of 12 hours of daily load-shedding during the driest months—January, February and April. However, we succeeded in reducing load-shedding by one hour daily to 11 hours,” said NEA Managing Director Mukesh Raj Kafle, addressing the NEA’s 30th anniversary on Tuesday.

He added that efficient operation of the Kulekhani reservoir at the onset of the dry season had helped to cut load-shedding hours to some extent. The NEA said that electricity consumers had grown 5.75 percent to 2.87 million as of 2013-14.   

The financial performance of the NEA has not been satisfactory. The state-owned power utility said that it incurred a loss of Rs6.51 billion in the last fiscal year. With this, its accumulated losses have ballooned to Rs26.79 billion.

Four years ago, the government had written off its accumulated losses amounting to Rs27 billion. The NEA earned Rs32.56 billion in revenues in the last fiscal year.

Kafle said that it had become a must to review the electricity tariff to offset its ballooning losses. “As a long-term or permanent solution, there is a need to implement an automatic tariff revision system to make the NEA sustainable. We cannot bring down the power tariff, but we can promise to improve generation, transmission and distribution to reduce our current losses,” Kafle said.

Energy Minister Radha Gyawali said that reviewing the tariff was one way to cut the NEA’s losses. “But from a broader perspective, controlling electricity leakage is the answer.”

The NEA has urged the Electricity Tariff Fixation Committee to hike the tariff by 20 percent. In June 2012, the committee had raised the tariff by 20 percent, the first hike in 11 years. “We will

not interfere in this matter if the NEA thinks it is time to hike energy charges.” Gyawali said.

Regarding the matter of unbundling the NEA, Gyawali said that the government had decided to divide the power utility into generation, transmission and distribution entities in 2011, and that she had just given continuity to the plan.

“Water resources and energy are the biggest assets of Nepal. The NEA has grown substantially over the past decades and has become a big family. A division will ensure better management,” she said.