For the last few years, we are facing energy crisis that is deepening day by day with no sign of a silver lining. We are living through 14 hours of power cuts a day, this dry season. According to Nepal Electricity Authority (NEA), the power cuts may increase to 18 hours a day in the next dry season. Furthermore, NEA is claiming that it is losing Rs 5 billion a year. In the same way, Nepal Oil Corporation (NOC) informed that it is going to lose around Rs 18 billion this year if petroleum prices are not adjusted in line with the price in the international markets. We can expect the serpentine queues near the fuel stations in Kathmandu Valley and outside it very soon.

What went wrong? NEA has its corporate plan which projects the power requirements till 2028, if we go by its published data. Some of the political leaders are of the view that once the political situation stabilizes all these woes of the country –whether economic, energy or social–will go away. But wil it not be too late if we wait for the political scenario to stabilize? The political leaders have to come together without delay in prioritizing energy sector and take some concrete steps for the sustainable energy development in the country.

The scenario seems grim if we analyze the energy sector and notice the current trend. For instance, we have currently installed the power of around 700 MW only. We have huge hydropower resource of 43,000 MW but have been successful in harnessing only 1.5 percent of its potential. Besides, we do not have any known resources of petroleum products, but the consumption of these products has been increasing at a tremendous rate. In 2010, total petroleum products sales (1.2 million) increased by 27 percent but some of the products increased at a much higher rate such as petrol by 31 percent, diesel by 37 percent and LPG by 22 percent respectively. The consumption of the petroleum products is much higher in comparison with the GDP growth rate of around 3.5 percent . As per the Economic Survey of the country, import of petroleum products was just 27 percent of the commodity exports in 2001.

Now in 2011, it may surpass 110 percent (around Rs 70 billion) of the commodity exports (Rs 64 billion approximately). Because of the power cuts and other reasons such as strikes and labor problems, our industrial outputs are getting less competitive and hence, exports are stagnating at the range of around Rs 60 billion.

The opportunity cost of power cuts in the industrial sector alone in 2010 numbers approximately to Rs 47 billion. It may be little less in domestic and commercial sectors. As per the International Energy Agency, the oil prices in the international markets can be expected to be getting much firmer from present $ 120 a barrel. A UN report in 2007 showed Nepal as one of the most vulnerable countries in the Asian and the Pacific region if oil prices keep rising in the international markets. As per NOC, 40 percent of the diesel sales in 2010, pertain to captive power Gensets in the country. Based on the NOC data, under-recovery (loss) in selling 1 liter of diesel comes to be more than Rs 20 now. It means that the country or the NOC is bearing Rs 4 billion for the production of electricity by rich household, industrial and commercial sectors. It is evident that the surge in the diesel sales is in a way due to the non-availability of electricity. This contributes to the vulnerability of Nepal from oil price shocks in the international markets.

Let us see the situation in the household sector as it consumes around 90 percent of the total primary energy consumption in Nepal. Around 57 percent of the total primary energy consumption goes in cooking alone. Out of it, only 51 percent of energy supply is supplemented from fuel-wood. LPG comes at 1.5 percent and animal dung at 4 percent. But kerosene use is 0.5 percent. Use of electricity is insignificant for cooking in the country. In 1997, for an average family of 5 persons in the country, monthly household expense for cooking was Rs 180 for kerosene, Rs 465 for LPG, and Rs 605 for electricity respectively. But in 2011, the scenario has completely changed; now Rs 1,150 is spent on kerosene, Rs 930 on LPG, and Rs 790 on electricity (at the current market prices of the fuels). Electricity has been the cheapest form of energy for cooking for the last couple of years. It is no wonder that the sales of kerosene have drastically plummeted. The sales of LPG is rapidly growing by more than 20 percent a year, for many years because cooking on LPG has definitely become cheaper than on kerosene.

Based on import parity, NOC has been importing petroleum products from India on Refinery Transfer Prices (RTP) paying them in Indian currency since 2002. Import parity prices of petroleum products in India contain customs duty components as well and the refineries can sell these products to the oil marketing companies based on these import parity prices. It is evident that Indian refineries are in a way being provided with protective incentives by the Indian government. But it is likely that the costs of import for NOC have been higher due to this reason for several years. Nepal government has not been able to pay attention to this matter though, previous committee reports had clearly pointed out the need for more than six years ago. The avoidable costs are in billions of Nepali rupees which may come almost near to the cumulative losses NOC is claiming about.

The pattern of usage of energy forms in the country is totally unsustainable which will make the energy crisis much more severe in the coming years, if the country does not take urgent measures. Furthermore, the energy security is at jeopardy. We are becoming so dependent on imported petroleum products that we do not have a single drop of our own so far. For the sustainable energy development in the country, the political parties, which are at the loggerheads now, need to realize that they have to come together and formulate some concrete strategies in the energy sector. Otherwise, if they wait till the political stabilization, it will be too late and no party will be able to govern the country no matter what their governing models.

In the short term, structural changes in the state-owned energy enterprises are needed without delay. The current organizational structure will not allow the development needed in the energy sector. NEA should also be allowed to adjust the electricity tariff on the basis of its efficiency improvement. The process of reform at the NEA and the NOC should start immediately. NEA should be reformed. Petroleum marketing should be deregulated since the government cannot bear the burden of facing the contingency of oil markets due to political reasons.

In the medium and the long terms, the development of hydropower plants for domestic consumption should be preferred to imports. A study shows that Nepal needs 1,500 MW in 2015 and 9,000 MW by 2030 for domestic consumptions. The current household fuel economics shows that electricity has become cheaper for cooking than LPG and kerosene. So, if we take into this demand as well Nepal needs to develop 500 MW extra by 2015 and 2,500 MW by 2030 respectively. BY 2015, if we manage to have 500 MW, Nepal can replace the import of kerosene and LPG, and thus, save Rs 20 billion. For this, the investment required is around Rs 80 billion. Besides, the usage of the captive Gensets will decrease with the reliable supply of power in the country. In the transport sector, hybrid and electric vehicles should be given incentive for imports. Besides, public transport should be prioritized. Bio-fuels such as ethanol and bio-diesel need to be promoted.

Any policy implementation depends on how the government sets up legal bases with all necessary laws and regulations. Institutional reforms are to be in place and strong commitment from all the political parties is needed for the development of the indigenous energy resources. It must be noted that nothing will come about with mere plans and strategies. In absence of proper execution, they gather dusts. The political parties must be serious and need to take concrete steps to solve the problems of energy sector.

Writer is Professor & Coordinator at the Center for Energy Studies, Institute Of Engineering (IOE)/TU



The best leaders love to learn. And the greatest organizations are learning enterprises – places where ideas are the currency of success. Yet, so many amongst us resist learning and embracing the new ideas that change brings with it. The deeper question is why?

What I’ve realized, as I travel across the world helping people Lead Without a Title, is that the very act of learning something new means you must also disrupt your thinking of yesterday. To accept or even just to entertain a new idea means you must leave the safety of your former way of perceiving the world and open up to something foreign. And that means you’d have to leave the protection of your comfort zone/Safe Harbor of The Known and sail out into the unknown – even for just a moment.

The unknown is a pretty scary place for most people. Ordinary people get threatened there. Victims get frightened there. And so the average person in business (and within life) avoids learning and exposing themselves to any idea or influence that might cause them to have to rethink the way they think and re-behave the way they have always behaved. But the fascinating paradox is that trying to avoid new ideas to stay safe is actually enormously dangerous – and infused with risk.

On the other hand, those who make the choice to Lead Without a Title have a lust to learn. They remain blindingly curious. They read books daily. They drink coffee with brilliant people. They have long conversations with role models whose ideas provoke/challenge/irritate them. Real leaders truly get that learning and ideation is the fuel of life. And that all it takes is a single idea to change the game at work (and rescript the story that is your life). Sure they too feel uncomfortable or even scared when faced with an idea that confronts their most closely cherished beliefs. But they understand that to resist the idea is to resist growth. As well as their next level of Mastery+Progress+Leadership. And so they move forward. Into an uncertain yet gorgeously exciting future.

Climate science maverick James Lovelock believes catastrophe is inevitable, carbon offsetting is a joke and ethical living a scam. So what would he do?
By Decca Aitkenhead,

In 1965 executives at Shell wanted to know what the world would look like in the year 2000. They consulted a range of experts, who speculated about fusion-powered hovercrafts and “all sorts of fanciful technological stuff”. When the oil company asked the scientist James Lovelock, he predicted that the main problem in 2000 would be the environment. “It will be worsening then to such an extent that it will seriously affect their business,” he said.

“And of course,” Lovelock says, with a smile 43 years later, “that’s almost exactly what’s happened.”

Lovelock has been dispensing predictions from his one-man laboratory in an old mill in Cornwall since the mid-1960s, the consistent accuracy of which have earned him a reputation as one of Britain’s most respected – if maverick – independent scientists. Working alone since the age of 40, he invented a device that detected CFCs, which helped detect the growing hole in the ozone layer, and introduced the Gaia hypothesis, a revolutionary theory that the Earth is a self-regulating super-organism. Initially ridiculed by many scientists as new age nonsense, today that theory forms the basis of almost all climate science.

For decades, his advocacy of nuclear power appalled fellow environmentalists – but recently increasing numbers of them have come around to his way of thinking. His latest book, The Revenge of Gaia, predicts that by 2020 extreme weather will be the norm, causing global devastation; that by 2040 much of Europe will be Saharan; and parts of London will be underwater. The most recent Intergovernmental Panel on Climate Change (IPCC) report deploys less dramatic language – but its calculations aren’t a million miles away from his.

Read the rest of this entry »

Friends, I came across this article in I don’t know how much you agree/disagree with this article.

I have managed, counseled and led many graduates from IOE, Pulchowk. I have seen them grow, learn, mature and even struggle. I certainly feel that I have enough information about range of graduates from the school. The graduates from the school can be put all over the map. I have seen both the best and worst side of the graduates from the crème engineering school. By the way, the school has been producing so many great graduates for so many years not because of teachers or administration. The most of the credits go to the brand name (being the first engineering school in the country) which has been able to attract the great pre-engineering students from different part of country, mostly from the Kathmandu based high schools and pre-engineering colleges. Many smart students from the different part of the country end up in the school after one of the toughest entrance exams in the country. The school is considered equivalent to IIT of Nepal. I have been consistently impressed by the level of intelligence many of these graduates possess and most of them are ready for the challenge right out of the school. But these graduates have significant number shortcomings too that I would like to list here. Hopefully, many of them will read this blog and argue with me. I want them to disagree with me and prove me wrong. Remember, every rule and statement has an exception. What I outline below does not come without some exceptions.

I find most of the IOE graduates introvert with consistent deficit of the hunger for broader roles and challenges. Their vision is not clear and they come out of the school without fully carved dreams. They are not thinking of owning a business and/or creating a product. The level of confidence is not apparent. They hardly ask questions in the group settings. They prefer to remain quiet. Most of them care more about high individual performance than the teamwork. They mostly hang around with the same circle of friends that they have been in the school for years. They do not seem to know the value of extending a network. I see many IOE graduates going to the lunch or the drink with the same group of friends every day. They wait for opportunity and do not run to grab them. They do not ask for more work. They expect to be given. Most of them focus more in core technical side of the job (mostly coding) and pay very little attention to the quality control and the documentation. They have some level of arrogance, when it comes to dealing with non-IOE graduates, which is going to hurt them down the road. Since they do not network with people outside of their own circle, their role model is one of their seniors or one of their relatives who have been to B grade school in USA and have gotten a decent enough job. Most of them hang around with vague dreams and I do not find them sweating at the work for better rewards and recognition. I have hardly found any IOE graduate (do not discount exception) coming to me and expressing their dream of creating a product and changing the world. However, over the years, I have changed many of them and have been very fortunate to have them in my team. And they have helped me learn and grow too.

I always ponder what are we missing here? Why can’t we expect more from our best students? Is this because of education they get? Is this our culture? Can we change this? Can we change culture of IOE so that we produce a lot of innovators instead of bunch of nerds who just want to get A+ grade, great GRE score and a foreign job? All of those IOE graduates who have done well should think hard and try to change the very tradition of IOE that they had to through. This is a payback time. Let us help the school so that we produce innovators and thinkers instead of mere taskmasters and task wizards.

Road Ahead

January 7, 2010

As the poet T.S. Eliot famously wrote, ” For last year’s words belong to last year’s language and next year’s words await another voice”…. Let us all hope and pray the New Year voice that the Nepalese will listen to is going to be of contemplative tranquillity, peace and inclusive development. Let these voices provide a sanctuary of the spirit where every Nepali can find strength to face anew the conflicts and the confrontations that are part of our human predicament. For me democracy in Nepal is like a flower, beautiful to behold, but at the same time fragile and in need of protection.

Today Nepal stands at a defining moment in its history. the road to formulate our new and inclusive constitution (through the constituent assembly) is long and bumpy. we are confused, disillusioned. Our visions of new and inclusive Nepal present a complex scenario of tensions between constraints and liberty, bondage and freedom, and the imperatives of a modern nation and the aspirations of a free citizenry. The new constitution will be a document and a vision that holds the promise of equality, justice, and opportunity. This new political culture is a sure harbinger of a new era of the country. But this new culture has to be nurtured. New norms and values have to be articulated and adopted.

Someone said “When we dream alone, it is only a dream, but when we dream together, it is the beginning of a new reality.” Let us all dream together to start a beginning of a new reality – a reality based on trust, freedom, equality, pluralism and prosperity.

Just to remind us, let us go back to the midnight of August 14-15, 1947, when a new nation – India – was born. Mahatma Gandhi saw the tragic partition of India upon independence as a betrayal. Despite the flames of communal hatred and rioting that lit the midnight sky as the new country was born; there was reason for pride, and hope. India ’s first Prime Minister, Jawaharlal Nehru, put in words that still stir the soul ( Shashi Tharoor , India – From Midnight to the Millennium, 2000, pg.15,):

“Long years ago, we made a tryst with destiny, and now the time comes when we shall redeem our pledge, not wholly or in full measure, but very substantially. At the stroke of the midnight hour, when the world sleeps, India will awake to life and freedom. A moment comes, which comes but rarely in history, when we step out from the old to the new, when an age ends and when the soul of a nation, long suppressed, finds utterance. It is fitting that at this solemn moment we take the pledge of dedication to the service of India and her people and to the still larger cause of humanity.”

For a New and Inclusive Nepal, let us all make this solemn pledge – a pledge to have peace, security, freedom and prosperity. A complete vision of the whole can perhaps be achieved by a renewed and inclusive Nepal – one that places people at the center so that people can become the active builders and shapers of a New and Inclusive Nepal.

Thank You!
Pramod Shrestha
1 Jan. 2010

On this happy occasion of New Year 2010, may we extend our warmest wishes to you and yours for peace, happiness, good health and prosperity.

Today, Nepal is plagued by greater and greater division – within political groups, and families, even individuals. We are all in a state of total distraction and diffusion, hardly able to keep our minds in one direction before we are pulled in a thousand others.  Yes, we say, we live in a democratic age. But let us all remember the fundamental truth previously articulated by Aristotle and Tocqueville: unregulated democracy undermines liberty and the rule of law.

In the context of democracy in Nepal, the democratic institutions and instruments might exist but their utilization might be quite limited. It may be partly through our own faults because we don’t engage enough or the way our political parties are organized. Democracy in any country is a case of unfulfilled expectations. Yes, in many countries, elections have just become a ritual. In some case, elections merely legitimized power grabs. Elected governments in Nepal claiming to represent the people have steadily encroached on the powers and rights of other elements in society. A strong government is different from an effective government; in fact, the two may be contradictory. In Nepal, we all have seen and felt that the first source of abuse in our so called democratic system have come from elected autocrats – which is the case of the tyranny of the majority. This problem, alive and urgent is important for us today because the majorities have – often quietly, sometimes noisily – eroded separations of power, undermined human rights, and corrupted long-standing traditions of tolerance, respect and fairness.

Massive corruption and a disregard for the rule of law have transformed Nepali politics. Have we reach a point when we will describe our political system as ‘bandit democracy’ in which our ballot boxes are stuffed, elections are rigged and the elected become immensely rich and powerful by looting the public coffers? Let us all pray that this will not be the reality of democracy in Nepal. Our democracy should live up to its promise – the promise we have made for the ‘excluded millions’. But we still believe that democracy has not lost its luster and its legitimacy in the world and in our country!  It is because democracy is a new way of perceiving power that is premised on the fact that human beings can govern themselves. For some, democracy may also be a utopia; the key is how the disappointments of democracy can be contained. In a functioning democracy, we all have to be more tolerant, more secular, more law-abiding and more equitable. We will always believe that in a true functioning democracy, the ‘people’ should do all the corrections in the system. It does not matter if the people are poor or illiterate. If we are talking about growth and economic development, it should always be attempted through democratic institutions. While historic evidence is mixed on the contribution of democracy to economic growth, there is also no conclusive evidence in favor of non-democratic regimes either.

Over the last 2-3 years, in Nepal, we see democratization of violence; now small groups of people can do dreadful things and we all are silent spectators. In future, we can see the rise in ethnic and regional communal violence in Nepal. Can our democracy accommodate ethnic divisions without violence or terror? Ethnic conflict is as old as recorded history and democratizing societies display a disturbingly common tendency toward it. The reason is simple: as society opens up and political parties and politicians scramble for power and position, they appeal to the public for votes using the most direct and effective language, that of group (ethnic) solidarity in opposition to other ethnic group. Often this stokes the ethnic or religious conflict and sometimes the conflict turns into a full-scale war. This, we think is one of the major challenges in Nepal. Our political parties and politicians are organizing support along racial, ethnic, or religious lines. In this context, once an ethnic group is in power, it tends to exclude other ethnic groups. Compromise seems impossible and political competition that is so divisive can rapidly degenerate into violence. The unilateral declaration of autonomous republican states by the Maoists will create ethnic and regional violence and promote communal disharmony. New names for cities and states might seem merely symbolic, but they represent a seismic shift in attitude. In crises, this shift can turn bloody. India is one example. Let us not forget the Gujarat riots.

Let us pray that may we all live in freedom; freedom from fear, freedom to live up to our potentials and freedom to dream about a better world and better new Nepal. Let us also pray that we all will preserve our integrity, which for us is the highest form of loyalty. Integrity should mean being integrated or centered on principles, not on people and organization. You will find that the root of most issues that we are dealing with is “Is it popular (acceptable, political) or is it right?” When we prioritize being loyal to a person or group over doing what we feel to be right, we lose integrity. We may temporarily gain popularity or build loyalty, but downstream, the loss of integrity will undermine even those relationships. It is better to be trusted than to be liked. Ultimately, trust and respect will generally produce love.

We have always admired and respected you for your simplicity, your kindness, your civility, and the depth and extent of your scholarship. Here we would like to quote the Olympic Creed that we think captures the occasion and it reads as follows: “Ask not yourself for victory, but for courage, for if you endure, you bring honor to yourself; and even more, you bring honor to us all.” Let us all have the courage to speak against ‘injustice’. We are honored and proud to have friends and well-wishers like you all.

Prarthana, Pranita, Rita and Pramod
21 December, 2009