sustainability assessment of hydropower project

1. 2013
Sustainability assessment in
Hydropower Projects:
A case study of Nyadi HEP, Nepal
An assignment submitted for Water
Resources Systems
Hydropower projects are large projects involving huge fund as well as structures.
Such projects should be sustainable ie, socially equitable, economically viable as
well as environmentally friendly. This assignment deals with the sustainability
issue in the hydropower projects and presents the sustainability of the Nyadi HEP,
Nepal.
Suwash Chandra Acharya
Graduate student, Water Engineering and Management, AIT, Thailand
9/2/2013

2. Table of Contents
1.
Introduction .......................................................................................................................................... 1
1.1
1.2
Objectives of study........................................................................................................................ 1
1.3
Limitations of study ...................................................................................................................... 1
1.4
2.
Background................................................................................................................................... 1
Structure of Report ........................................................................................................................ 1
Overview of project .............................................................................................................................. 2
2.1
2.2
Location and accessibility ............................................................................................................. 2
2.3
Catchment characteristics: ............................................................................................................. 3
2.4
Water quality ................................................................................................................................ 3
2.5
Land use pattern ............................................................................................................................ 3
2.6
Status of endangered species ......................................................................................................... 4
2.7
Population ..................................................................................................................................... 4
2.8
Women in the Project area............................................................................................................. 4
2.9
Disadvantaged groups ................................................................................................................... 4
2.10
Water supply and sanitation........................................................................................................... 4
2.11
Alternative Analysis ...................................................................................................................... 5
2.12
3.
Introduction .................................................................................................................................. 2
Financial Analysis ......................................................................................................................... 5
Sustainability Assessment ..................................................................................................................... 6
3.1
3.2
Assessment of Environmental aspects ........................................................................................... 6
3.3
Assessment of Social aspects ......................................................................................................... 6
3.4
Assessment of Economic aspects ................................................................................................... 7
3.5
4.
Introduction .................................................................................................................................. 6
Overall Assessment Result ............................................................................................................ 7
Conclusion ........................................................................................................................................... 9

3. 1. Introduction
1.1 Background
Nepal is endowed with abundant fresh water flowing Rivers and it is estimated that more than 6000
Rivers and rivulets flow within the country. A whole generation in Nepal has been consumed by the
seductive dream of the 83,000 MW hydro potential that the cascading waters of this land is
supposed to hold. However, at present, installed capacity in the country is slightly more than 690
MW whereas the demand of electricity at present is around 950 MW. It is evident that to overcome
this deficit, hyropower projects should be launched to utilize the abundant water resources.
Although, there are many proposed projects in pipeline at the design and implementation stage, one
of them is Nyadi Hydropower Project (NHP).
The sustainability assessment of hydropower project helps to direct the planner and decision maker
towards sustainability of the project. The study on assessment of the sustainability of any
hydropower is therefore essential so that it ensures that the plans and activities contribute towards
delivery of sustainable development.
In this context, the sustainibility of the Nyadi Hydropower Project (NHP) is accessed on social,
environmental and economic aspects. This report is purely based on the desk study and analysis of
secondary data available regarding the project.
1.2 Objectives of study
The major objective of the study is to access the sustainability of the Nyadi Hydropower Project on
the basis of environmental, social and economic aspects.
1.3 Limitations of study
Due to limitation of time and resources availability, the study is confined to fewer details. There are
various topics to be addressed under the environmental, social and economic aspects. Only some of
them are addressed here. Further, the assessment is purely based on secondary data and this may
also be reason for lagging in some of the information.
1.4 Structure of Report
The report is structured in four chapters. The report starts with introduction that highlights the
background information of the project, objectives and limitations of the study. The chapter two
highlights the overview of different details of project including catchment characteristics, water
quality, land use pattern, status of endangered species, population in the project area, women in
project area, status of disadvantaged groups and water supply and sanitation in the area. This
chapter also reviews financial analysis of the project.
The chapter three comprises the sustainability assessment of project. This chapter accesses the
environmental, social and economic aspects of sustainability of the project. The report concludes in
chapter four with the logical conclusions and recommendations.
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4. 2. Overview of project
2.1 Introduction
Nyadi Hydropower Project (NHP) is a Run-of-River (RoR) type project, located in Lamjung
District, Western Development Region of Nepal.
Initially, installed project capacity was estimated as 20 MW based on Nyadi River. On that basis,
feasibility study was carried out and applied for Power Purchage Agreement (PPA). The latest
development is that
the probability of tapping the tail water flow of Siuri Khola Small
Hydropower Project from the nearest tributary Siuri (Doranda) Khola has been explored and
decided to incorporate it so that the project become financially viable. As per the latest
optimization using the additional tail water flow of SKSHP, the project has an installed capacity of
30 MW and will generate 180.24 GWh of energy annually. Major construction of the Project has
been started from the early 2012 and expected to be commissioned in the mid of 2015.
2.2 Location and accessibility
Project area of NHP covers two Village Development Committees (VDCs) namely: Bahundanda
and Bhulbhule of Lamjung district, Western Development Region of Nepal. However, the major
project structures like intake, surgeshaft, waterways and powerhouse are located in Bahundanda
VDC. Geographically, the proposed project lies between 84° 25' 25” E to 84°28' 00” E and 28°19'
20” N to 28°21' 07” N.
Figure 1: Location Map of Myadi Hydropower Project
The access to the project area from Kathmandu is through an all season 135 km long Prithivi
Highway connecting the Bhanubhakta Highway at Dumre in Tanahu district. About 202 km of
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5. Bhanubhakta Highway from Dumre to Besisahar (district headquarter of Lamjung) and about 15
km road from Besisahar to Thakanbesi followed by the existing track roads leads to the project area.
2.3 Catchment characteristics:
The Nyadi River originates from the Himalayas at an elevation of more than 7,000 m and flows
south-west to join the Marsyangdi River about 7 km downstream of the proposed intake area. The
length of the catchment area is 20.5 km and the average width is 7.5 km. The Nyadi River
catchment has very steep valleys and a steep river profile. During the monsoon, the turbidity of
Nyadi River and its tributaries increases due to the large volume of suspended load. The Biological
Oxygen Demand (BOD) level will probably be lower because of the higher volume of sediment
influx. The concentration of other parameters is not expected to change significantly. The main
sources of sediment yield in the drainage basin are steep terrain and associated erosion at upstream
areas.
The landscape in the project area and the drainage basin is dynamic and unstable. Landslides are
visible along the Nyadi River. Some landslides were observed at the Siuri (Doranda) and Nyadi
Khola junction or 500 m upstream of the powerhouse site.
2.4 Water quality
The test of water sample reveals that the quality parameters are suitable for sustaining fish and
aquatic life. The dissolved oxygen content (an index of water quality in relation to flora and fauna)
was found to be between 8.1 mg/L and 9.9 mg/L which is an acceptable level (note that dissolved
oxygen content below 5 mg/L is unsuitable for fish and aquatic life). The pH level of the water at
sampling site was between 7.8 and 8.0 pH, which is suitable for aquatic life. Water of Siuri Khola is
free from anthropogenic source of pollution. The water is clean and seems drinkable. Sediment
yield is not serious at Siuri Khola as the catchments are all natural forest and pasture land. The
water remains clear even in the months of summer.
2.5 Land use pattern
The land use pattern of the project occupied area can be broadly divided into agriculture land,
barren land, forest land, river and flood plain. Agriculture land accounts for the major portion of
land, which is 66.164% of total land. Similarly, river and flood plain, barren land and forest land
accounts for 24.554%, 8.596 and 0.684% respectively
Table 1 : Land use pattern of project occupied area
S.N.
1
2
3
4
Total
Land use type
Forest area
Agricultural area
Barren land
River and Flood plain
Area (ha)
0.2
19.32
2.51
7.17
29.20
Percent
0.684
66.164
8.596
24.554
100
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6. 2.6 Status of endangered species
None of the plants species recorded in the NHP area were identified as endangered species. Simal
(Bombax ceiba) is a legally protected tree species of Nepal found in the project area. Cutting,
transportation, and export of these species are prohibited for commercial purposes and government
of Nepal may issue permission for cutting of these tree species for the implementation of national
priority projects, like hydropower. Among the faunal species, twelve species are listed in CITES I,
II and III, one species is protected under National Park and Wildlife Conservation Act, 1973.
(CITES = Convention on International Trade in Endangered Species of Wild Fauna and Flora)
2.7 Population
Lamjung District has an area of 1,692 Km2 (170,872 ha) with a population of 177,149 with an
average households size of 4.85. Bahundanda and Bhulbhule VDCs are within the project
influence area. These VDCs constitute a total population of 6033. There are no other permanent
settlements in the area and only a few seasonal shelters live above 3,000masl altitude.
Table 2 : Population characteristics of project influenced VDCs
S.N.
VDCs
Households Population Male
Female
1
2
Total
Bahundanda
Bhulbhule
502
703
1205
1247
1825
3062
2556
3477
6033
1282
1652
2934
Sex
Ratio
1.02
0.90
0.96
2.8 Women in the Project area
Women constitute about 49 percent of the total population in the project area as per household
survey. However, women in the project area are regarded as low class groups. They do all the
household works including cooking, cleaning, rearing children, tending cattle and even work in the
fields. The literacy rate among them is also low as compared to men.
2.9 Disadvantaged groups
Like in the other parts of the country, Kami, Damai and Sarki are the disadvantaged groups in terms
of economy, social behavior and status in the community and society. Kamis make agriculture tools,
Damais provide tailoring services and Sarkis are engaged in making leather items such as shoes. In
reality, they are providing enormous services to the community. However, their efforts are not
valued in society.
2.10
Water supply and sanitation
The supply of tapped drinking water is satisfactory in the project area. As per the district profile of
Lamjung district, 95% and 96% households in Bahundanda and Bhulbhule VDCs respectively have
access to tapped drinking water supply. Others use wells, stone taps and spring water for drinking
purpose. However, as per the sampled HH survey, on an average, 90% have access to tapped
drinking water supply (Table 3). Rest use wells, river, spring for the drinking purpose. However,
sanitation condition is not good in the project area and only 40% people have toilets.
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7. Table 3 : Use of different sources of water for drinking purpose in the project area
VDCs
Private
Tap
Bahundanda 1
Bhulbhule
1
Total
2
Percentage
2.11
Public Tap
Well
29
47
88
2
2
River
Other
spring
3
4
3
4
Total
Sampled HH
32
54
100
Alternative Analysis
Initially optimum project capacity was calculated as 20 MW based on Nyadi River. On that basis,
feasibility study was carried out and PPA was applied. However, the estimated cost of project and
the revenue from power generation based on prevailing rates indicated that the project was only
marginally feasible. Thereafter, the study team explored the options to increase power generation
by possible ways. The latest development is that the probability of tapping the tail water flow of
Siuri Khola Hydropower Project from the nearest tributary Siuri (Doranda) Khola has been explored
and decided to incorporate it so that the project become financially viable.
2.12
Financial Analysis
The financial analysis consists of a cash flow during the project life, a financial evaluation, which
suggests the Net Present Value (NPV), a Benefit Cost (B/C) ratio and the Internal Rate of Return
(IRR) on project and equity.
Capital cost for the project is US$ 67.349 million with installed Capacity 30 MW.Energy generated
by 30 MW power plant is estimated to be 180.24 GWh (Dry energy = 29.82 GWh, Wet energy =
150.41 GWh). Estimated consumption is 0.27 GWh for rural electrification and 1.78 GWh for Siuri
tailrace water pumping mechanism. The estimated sellable energy will be 178.19 GWh.
Table 4 : Results of financial analysis
S.N.
1
2
3
Economic indicators
Project Cost, US$ 000
Project Cost/kW, US$
B/C Ratio
Value
67349
2245
1.37
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8. 3. Sustainability Assessment
3.1
Introduction
Sustainable development is defined by World Commission on Environment and Development, 1987
as the development which meets the needs of the present without compromising the ability of future
generations to meet their own needs. Now, after extensive discussion on this issue for decades, the
sustainable development is expressed on the basis of three important aspects- social, environmental
and economical (people-planet-profit). According to this concept, for a project to be sustainable, it
should be socially equitable, environmentally bearable and economically viable.
3.2
Assessment of Environmental aspects
The sustainability of the project regarding environmental aspects can be explained in the following
points:

The catchment is steep and sediment yield in the monsoon is higher, it has negative impact
on the hydropower plant operation. Without addressing the problem, the implementation of
the project may exacerbate the situation. Also, the river bank is more prone to landslide so
the construction of retaining structures and the implication of bioengineering are required to
maintain the sustainability of the project.

The water quality of siuri khola is free from pollution as well as contains less sediment even
in monsoon. This should be maintained after the implementation of the project. During the
construction period, the pollution may increase in water due to construction materials which
is medium term problem.

During the operation, the degradation of water quality is likely to occur due to reduced flow
from the dam. Due to low discharge, the sediment carry will be high reducing the dissolved
oxygen affecting aquatic flora and fauna adversely for longer term.

The forest coverage in the project area is low. There are community preserved forests in the
area which are to be protected during the construction of the hydropower project. One of the
species, which is legally protected, should be preserved during construction. The project will
follow the rule of GoN if it is required to cut the trees in the project area.

The land used for agriculture and land containing forest will be used for the project
structures. This will change the land use permanently.

The faunal species in the project area shall be affected by the hydropower project as some of
the forest area in which they live will be used for the hydropower project. Due to decreased
flow to downstream and also flushing of sediment from hydraulic structure will directly
affect the aquatic species.
3.3
Assessment of Social aspects
The sustainability of the project regarding social aspects can be explained in the following points:

During the construction period, huge number of skilled and unskilled manpower will be
required. The priority will be given to the project affected villages. So, the people from the
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9. villages will be employed based on their skills and qualifications. But, shortly after
completion of project, there will be job deficiency which may force the men to migrate out
of project area in search of job leaving more responsibility to women (their wife) on
household activities.

The project will also support for public facilities such as clinics and building access roads
during the construction period. These will serve the villagers for long time i.e. during the
operation phase also.

Due to tunneling, the depletion of water sources along the tunnel alignment is likely to
occur. So, a detailed study on technical assessment of tunnel alignment should be done to
find out the likely affects on tunnel alignment.

After the production of hydropower from the project, the plant will be able to provide
electricity to the villages in the project area at low costs. This will facilitate the introduction
of electrically driven mills compared to less efficient water mills. The access to electricity
will enable the non-formal adult education classes that take place in the evenings. Electricity
will facilitate access of communication technologies such as television, radios which will
enhance public awareness to the villagers along with entertainment.
3.4
Assessment of Economic aspects
The sustainability of the project regarding economic aspects can be explained in the following
points:

The project area is located near the tourist area of the country, famous trekking route to
ACAP region. The availability of electricity will enhance other facilities and services will
further contribute to increase tourism in the area which will improve the rural economy.

At present, less than 40 % of the total population has access to electricity. There is a severe
shortage of power in the National Grid, which in the near future is going to increase further
if new hydropower projects are not developed. As the industrial sector needs huge amount
of electricity, the proposed hydropower will contribute 30 MW of electricity to the country
which will be a significant contribution to the national grid of Nepal considering the supply
of only 700 MW of electricity at present.

The financial indicators shows that the project has good B/C ratio, the project will serve
well. But the capital cost per KW is $2245, which is higher amount compared to other
hydropower plants (e.g. Chilime hydropower’s per KW capital cost=$1547.00, Hydropower
Pricing in Nepal, Jalsrot Bikash Sanstha(JVS)).
3.5
Overall Assessment Result
In summation, the hydropower project has adverse effect on environment affecting forest areas as
well as aquatic species. The amount of possible threats to environment and actions taken to
minimize the effects is a measure of sustainability of the project. This project cannot be decided as
sustainable by looking into environmental aspects alone.
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10. Further, the availability of employment facilities during the construction and benefits of access to
electricity is the positive aspects for the society. Further, the villagers will benefit from the health
facilities during and after the project. The project can be called sustainable on the social terms.
Although the unit cost of production is high but the Benefit to Cost ratio is good which indicate the
soundness of the project. Also, the project area will be benefited more through tourism after the area
will have electricity supply. So, the project can be said to be sustainable in economic terms.
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11. 4. Conclusion
The NHP will provide a significant contribution in reducing the deficit between present production
and present demand of electricity. This project will also contribute to the growth of local economy
for longer terms. The potential negative effects of the project on the local environment and
community are likely to be moderate and range from short term to medium term (some may be long
term too).
Overall, it can be concluded that the proposed works may have some adverse effects, during
construction and operation, the benefits it will bring to the local people and to nation itself has the
potential to be significantly greater. On expense of some of adverse affects, within tolerable limit,
the project shall ultimately be sustainable and serve the target group for longer period.
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12. References
1. Hydropower Sustainability Assessment Protocol, International Hydropower Association,
November 2010.
2. Sustainability and Sustainable Development, Jonathan M. Harris, 2003.
3. Updated Report, Environmental Impact Assessment of Nyadi Hydropower Project, Hydro
Consult Private Limited, March 2011.
4. http://nhl.com.np/general.php?pg=introduction&type=about
5. http://www.bpc.com.np/index.php?option=com_page&task=details&id=23
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