Upper Karnali Project Pres May 2014 IOE and NHA

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WelcomeSustainability of Hydropower in Nepal

A Case of Upper Karnali ProjectBy

Hari Prasad Pandit

Institute of Engineering, TU

[email protected]

April 2014

Content of Presentation Why this Presentation Why Upper Karnali in Consideration Conceptual Layout of Development Options Technical and Financial Indices of Options Comparison with Other Reservoir Projects Financing Model Time Frame of Implementation Inference from Upper Karnali HEP

Sustainable Energy is the key input for industrial Development and Prosperity of any Nation>

Do we have Resources? No Oil, No Gas, No Coal 83,000 MW, 44000 Economically Feasible Hydropower With the balance of Storage and RoR Projects ~

100,000 MW (with PF~ 0.5) can be generated Considering all kinds of benefit (Power, Irrigation,

Navigation, Fisheries, Water Supply, Recreation.) about 10 times the Annual Budget (5,000 bln/Year)

And Energy can be generated at a much cheaper price if we develop in a planned way

Why this Presentation ? Why this Presentation ?Do we have Financial Resources for funding ? Remittance Alone

About 4,000,000 Nepalese work outside About 2,500,000 alone in Gulf and Malaysia Minimum wage now is NRs 25,000/month (saving) In average NRs 40,000/month (saving) can be estimated In Annual term 12 00 bln will be received through official

and non official (Hundi) channel (now ~600-8 00 bln) However most of this resource is not utilized in productive

sector

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Why this Presentation ?Do we have Human Resources for Implementation ? Nepalese professionals have graduated from across the Globe Diversity of infrastructure projects in Grants/loan by Japan,

China, India, UK , Russia ,Germany, Norway, US Nepalese professionals have diversity of knowledge

technology and experience Nepalese professionals have been working in reputed

institutions across the Globe Semiskilled and non skilled manpower will return from abroad if

there will be opportunity at home

Why this Presentation ?Existing Power/Energy Scenario

~ 700 MW Installation with < 50% capacity in Winter System Peak load ~ 1,200 MW Load shedding ~ 18 hrs + ( disagree supply 22:00-6 :00) 1200 MW addition in 4 years all except KL-3 (14 MW ) are

RoR/PRoR Only ~ 250-300 MW will be available in Winter In 4 years time again a shortfall of ~ 600 MW West Seti -750 MW From SMEC to Three Gorges 400 MW Nalsaugad in planning

Why this Presentation ?Existing Power/Energy Planning

Upper Seti Tanahun 140 MW Small reservoir, Expensive generation Downstream benefit due to power/irrigation-insignificant

Budigandaki Storage ( 630 MW in next ~10 yrs) Expensive, Revenue ~ 15-17 bln/year; social issues

severe, Financing ~ 250 bln But downstream (India) Benefit (irrigation )~ 15 bln/yr Due to flow regulation in Nepal ~ 3 bln/yrQuestion-should we implement these projects ? Yes, As we are paying twice as much now

Why this Presentation ?How much Power (MW) we need in next 10 years ?

In Ten years horizon , again we will have shortage of ~330 MW Add 600 MW plus if we can insure Energy throughout the year Suggesting a single project with a capacity as 1500-2000 MW

with cascade benefit to be sought for 10 yrs planning Remember , for a similar dam height the cost of the dam is

almost same . Be it, small Kulekhani or mighty Karnali

Summer Winter Peak DefecitCurrent Availability 730 500 1200 700Upper Seti 140 140Budigandaki 630 630West Seti 750 750 750RoR in 10 yrs(assumed) 2500 750Total 4750 2770 3100 330

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Why this Presentation ?Existing Scenario/Plan

Import from India ?????? Upper Karnali 900 MW (

900 MW in Summer, ~150 MW in Winter out of that 12% ( 18 MW will be supplied to domestic grid + 27% Free share)

Similar situation with Arun 3 Imbalanced generation makes energy very expensive and

state authority Bankrupt Ministry of Water Resources eliminated, institutions like

WECS (heart of WRD) weakened or destroyed Who to be blamed???

Problem in Understanding?? Whether we need Power/ Energy? Whether we need Water ? Whether we need both water and Energy? In Major river basins we have surplus water for irrigation and

Water Supply Only Basins such as Babai, Kamala, Bagmati are deficit

ones Therefore, not a dam with big storage but a small

dam/ reservoir with multiple use and/or multiple benefit in cascade is the sustainable option for Nepal

Problem in Policy/Regulations Licensing Haphazard No River Basin Study No Master Plan preparation in most of the basins No update - some of the basins with preliminary Master Plan No policy for the pricing of Regulated flow (from Reservoir)

14 bln/yr in immediate downstream due to regulated flow Nevertheless, licenses of RoR Projects - usual business of

DoED Made aware Chief Secretary and DoED

Why Upper Karnali Project (UKP) Because of Magic bend with a head

difference as 140 m this project is the cheapest in Nepal and probably in the World

Often called Jewel of the Crown by Engineers and Economists

Instead of Developing a single PRoR Project as planned (UK 900 MW) high dam and reservoir followed by RoR project with several options can be planned.

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Upper Karnali Project: Dam Site Upper Karnali Project: Reservoir Area

Study Methodology

Hydrology and Energy : Hydrology of Asraghat(DHM:1962-2006), Fully Utilized

Topography and Head : Topographical Map, 1:25,000 (FinMap)

Geology: FSR by NEA/ CIWEC, 198? and Site Visit and Study

Rockfill dam of 1:1.7 slope is considered for cost estimate. Quantity Estimation : Sections drawn from Topo Sheets,

Quantity Estimates from Base Cost for large Hydropower Plants, NVE, Norway, 2010

Cost : NVE, 2010 and Contractors rates from ongoing Projects, Nepal

Benefit : Avg. Price of Energy U$c 6.0/kWh Reliability/Accuracy: Revenue 5% ,Cost (20%) Financial Analysis carried for Reservoir+ RoR Projects

Hydrology and Energy Potential

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Qd= 680(m3/s) QEnv = 12.4 (m3/s)

Month Days Q (m3/s)Asraghat

(1962-2006)

Env Runoff (mcm)

Effective Runoff (mcm)

Runoff Wet Runoff Dry Qexcess Excess

RunoffJan 31 137.1 132 32.5 334.7 334.69 0.0 -Feb 28 121.4 118 29.4 264.3 264.32 0.0 -Mar 31 133.1 131 32.5 324.0 323.98 0.0 -Apr 30 206.9 197 31.5 504.8 504.82 0.0 -May 31 392.2 389 32.5 1018.0 1017.95 0.0 -Jun 30 733.1 713 1900.2 1900.2 33.0 86 Jul 31 1166.7 1160 3124.9 3124.9 480.0 1,286 Aug 31 1376.8 1380 3687.6 3687.6 700.0 1,875 Sep 30 916.4 920 2375.3 2375.3 240.0 622 Oct 31 418.9 415 32.5 1089.5 1089.47 0.0 -Nov 30 231.3 228 31.5 568.1 568.06 0.0 -Dec 31 162.2 165 32.5 401.9 401.92 0.0 0Annual 365 499.675 495.667 15593.2 11,088 4,505 3,868


FSL 820 mMDDL 730 mTWL 480 mQD 619.6 mGross Head 340.0 m

Net Head at FSL 333.2 mReservoir Variation 90.0 mRated Head 304.0 m

Overall efficiency 0.9 m

Installed Capacity 1,822,704 kW

Total Generation at rated head 11,626 GWh

Development AlternativesAlternative 1 : Projects in CascadeProject 1 at Upstream : Reservoir Project 230 m Dam at Tuinkuna (U/S of

Ramagad) with FSL at 820 masl Gross Head = 200 m Powerhouse at Dam toe Discharge = 680 m3/s Power = 1177 MW Energy= 6272 GWh Project Cost ~ NPR 175 bln

Alternative-1 Project 2 : RoR Project in Cascade

Tailrace Tapping with FSL at 620 masl TWL = 480 masl Gross Head = 140 m Underground Powerhouse Discharge = 680 m3/s Power = 825 MW Energy

RoR 3931 GWh Reservoir storage 1303 GWh

Total 5233 GWh Total Cost ~ 33 bln

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General Impression of Reservoir after impounding

Conceptual Layout of Alternative 1

Alternative 2 : Project 2 Further Downstream- No tailrace tappingAssumption: Project 2 starts earlier (Now) Project 1 : Reservoir Project

Same as in Alternative 1 Project 2 : PRoR Project downstream of Ramagad

FSL = 620 masl Diversion Headworks with all components TWL = 480 masl Other Parameters same as Alternative 1

As the project starts earlier, about NRs 15- 18 blnmore compared to Alternative 1 with delay of 1-1.5 yrs.

Project cost ~ NRs 50 Bln


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Alternative 3 : Single Dam/ reservoir Dam/Reservoir at Dailekh/Achham FSL =820 masl TWL = 480 masl Gross Head = 340 m Underground Powerhouse across Valley Discharge = 680 m3/s Power = 1823 MW (16 hrs in winter) Energy

Wet 7716 GWh Dry+ storage 3910 GWh

Total 11,626 GWh Cost 200 bln


Site Information- Reservoir Area Site Information- Dam Site

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Dam Site- Left Bank Site Information- Test Adits

Test Adit on Left bank Test Adit on Right bank

Site Information- Test Adits Comparison of AlternativesParameters

Alternative 1 Alternative 2 Alternative 3

Storage RoR Storage PRoR Single Project

Total Power (MW) 1177 824 1177 824 1823

Total Energy (GWh) 6272 5233 6272 5233 11626Total Cost (U$, Mln) 1719 373 1719 537 2064Total Revenue (U$, Mln) 690 691 697.5Cost/kw (U$) 1045 1128 1132Cost/kwh (U$c) 2.0 2.2 1.95

Cost/kwh (NRs) 2.0 2.2 1.95Note : Interest Rate: 10%Prelimanary calculation Without IDCPower plant in operation for ~ 16 hours a day in winter

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Which Alternative Preferred Phase 2 Development

With the development of RoR projects, Peak demand will be increased

About 2000 MW (with total ~4000 MW) can be installed keeping 8hrs/day peaking (eg. West Seti, BG 640 MW etc, KL1 60 MW, KL2 32MW)

Phase 3 Development With upstream dams in Tila/Sinja and Karnali ~2000-4000 MW (total 6,000-8,000 MW) can be generated. Therefore, Alternative 1 with Dam and

Reservoir upstream followed by RoR plant with tailrace tapping is recommended.

Benefit to downstream Project Benefit in Capital investment

No dam, no settling basins, which is major cost item of Civil works. NRs 15 -18 bln saving

Benefit related to Operation and Maintenance (Annual Flood and Sediment benefit) No or negligible outage of plant no or negligible damage in hydro-mechanical

equipment such as turbines and accessories, 3-4 % of revenue in most of the RoR projects

significant reduction in operation maintenance cost, especially, due to reduced number of manpower

If coordinated properly, the d/s project can be operated from powerhouse of upper Project

Benefit to downstream Project

Benefit due to Catastrophic Flood events and Glacier Lake Outburst Floods (GLOF) With the reservoir upstream, flood is dampened

and smaller flood peak is generated. In case of GLOF, flood peak may not be the issue but a debris flow, with a huge quantity of bed load is anticipated, which is trapped in the upstream reservoir.

Benefit in revenue due to augmented flow during dry season

If sold in the same market the Energy Price will be much higher because of increased Firm Energy

Downstream benefit

In Nepal (Not accounted in Financial Analysis) Reduction of dam height at least by 20-40 meters

in Karnali Chisapani Dam. No irrigation benefit is perceived in Nepal as there

is already sufficient flow for such purpose.

India and Bangladesh (Not accounted in Financial Analysis) Irrigation: 500,000 ha additional (which receives

no water during dry season) can be irrigated. The resulting net benefit according to a research carried out in farm land of Bihar is about NRs 15 billion/ year.

Benefit due to flood peak reduction

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Cost Benefit Sharing Downstream project Because of the multiple other

benefits, rights to Energy due to Natural Flow only ~ 4,000 GWh

Upstream project rights to regulated Energy from downstream Project- Total 7,600 GWh (1800 MW in winter)

Savings in Capital cost in d/s project can be settled by mutual understanding

Cost/Benefit sharing with India/ Bangladesh can be settled with dialogues

UKP VS other Reservoir Projects

NameofProject

Power(MW)

Energy(GWh) DamH(m)/Ratedhead

Reservoir(mcm)

TotalCost

(Bln,NRs)

Cost/kW(MlnNRs)

Approx.Cost/kWh(NRs)

Revenue,Nepal(NRs

Bln/yr)*Dry Total Gross Live

PanchesworMultipurposeProject(PMP) 6,480 10,671 315 6,560 298 45,988 3.07 53.41

UpperSeti 140 586 140 323 45 321,429 8.45 3,516

Budigandaki 640 1,800 2,900 245 3,320 2,755 250 390,625 9.48 17,400

UpperKarnali 1,823 3,910 11,623 230 3,900 206 113,001 1.95 69,738

UKP VS other Reservoir Projects

Study of ICIMOD: So Far no threat to GLOF in Karnali Basin

Sediment concentration 3 times less than other rivers such as Budigandaki and negligible such as Kaligandaki

Much less Environmental and Social impact, sparsely populated area (~ 800 HH within Reservoir area counted from Topo sheet)

Generation cost too low Transmission line long

GLOF Threats (Recent ICIMOD Study)

Suggesting storage reservoirs to be developed in Karnali Basin.

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How to Consume Huge Energy Energy 11626 GWh

Wet 7716 GWh Dry+ storage 3910 GWh

Fertilizer Industry ~ 800 1000 MW Replacing Cooking Gas by Electricity~ 600-

1000 MW Other Industries- Cement, Metal, Agri, .. Transportation

Electric Car Trolley bus/tram Electric Railway

CONCEPTUAL WORK SCHEDULES.N Activities

Mo 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16

1 Decision Making for UKP 32 Pre-Construction Activities 24

Review/update of FSRPhysical Hydraulic ModellingDetailed Engineering Design

Preparation of Tender Documents

Financial Commitment

3Bid Invitation/Evaluation/ Award

4 Construction of Civil Works 725 Electriomechnical & AIS Works 486 Hydromechanical Works 42

7Testing & Commercial Operation of the plant 6

Year7 Year8Year1 Year2 Year3 Year4 Year5 Year6

Financing Model Public Private Partnership

50 % (~100 bln) from Public ;12 bln/yr 20 % (~40 bln from Govt in 8 years) 15-20% (~ 40 bln from Banks in 8 years) 15-20% (~40 bln from Power Developers/Investors)

UTK-456 MW Chilime Group NEA Other Developers NTC, Citizen Investment Trusts

10% International Investor (Unconditional, who provides technical assistance in Grant)

More than 100%

Corrective Measures Required License coordinates of Upstream projects to

be corrected eg. Lower Tila, TWL > 850 m Compensate for additional

investigation/design if already finalized Flow Regulation provision in licensing Revision in PDA of UK900 MW Karnali Highway (~35 km ~ 1 bln) to be

shifted to > 850 m above

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Questions/issues raised The person naming Jewel of the crown- Who will

listen to you? Its too late now, govt. is finalizing PDA GMR will go away if we now will change the MOU,

the state will lose huge revenue Doesnt believe on cost and benefit MOU- Clauses 36. GON acknowledges that due consideration may

be accorded to GMR-ITD Consortium for the allotment of upstream/downstream project, if any.

Questions/issues raised 37. GoN shall ensure that the development,

implementation and operation of upstream / downstream Projects by other developers shall not be detrimental in any way to the Project

NEA Reservoir too small sediment too high- so NEA discarded

Difficult Layout of Dam and Appurtenant structures

Rethinking Domestic Investment in Hydropower

Current trend- Larger no of smaller projects

Impact Hurdles in licensing, study and implementation Quality of study, implementation poor (both

Civil and EM works, life time questionable) No proper manpower to design, implement and

operate Often very expensive due to scale and lack of

proper knowledge Complexity for all stakeholders (DoED,NEA,

Developers)


Based on Ground Reality (Preparedness, Finance, human resources) phase wise plan as below suggested

First Phase Identify/study best and sizable Projects (500-2,000MW) Implement by all stakeholders (Govt, general public, private,

cooperatives with govt. initiatives) Leads to good infrastructure network, confidence)

Second Phase Implementation of Large and Medium size projects (100-

10,000 MW) Large Projects (Developers of First phase+Intl investors,

intl lending) Medium Projects (Domestic investors, Domestic lending)

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Whose Responsibility? Where to Build? Reservoir Projects- Long-term impact

States key responsibility and player Mostly from Karnali Basin due to reservoir life

and minimal GLOF threats West Seti -750 MW with benefit in cascades,

Upper Karnali, Karnali, projects in Bheri, Tila) RoR projects

From any part of the country Upper Arun with full optimization ~1000 MW,

high head projects in other basins

Thinking Realistic Model of Federal state

Water Resource is the largest income generating natural resource, so the states should be planned according to Watershed with sub-states as Himal, Pahad, Madhesh as discussed now, leading to Less conflicts in resources sharing Optimum Benefit Faster development of Infrastructure network A key to sustainability

Conclusions and Recommendations Nepals vast water resources development- a key to

prosperity Cheapest energy can be generated from Upper Karnali

Project, when sizable dam/reservoir followed by RoRproject is implemented

This will lead to end of torturous load shedding and paves path of prosperity

With proper policy each year ~ 100 bln domestic resources can be invested if good projects are identified and implemented

Conclusions and Recommendations State should react accordingly- Study, PDA, institutional

framework Wasting cheapest energy resource (irreversible impact) with a

potential of ~ NRs 50 bln each year is a Huge Mistake and deprival of rigths of future generation Preliminary Homework at home Visit by Intl dam expert and Geologist together with domestic

experts Nepalese Hydropower Development Practice- to be rethought

Planning Design (Master plan, Ranking of projects) Financing ( Implement large projects with all efforts)

As Water resources is the largest income generating sector, New Federal states to be conceptualized on Watershed basis- North to South with sub-states in terms of Geography, Ethnicity, Language etc.

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THANK YOUAny Questions?

Upper Karnali Project Pres May 2014 IOE and NHA

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