Electricity Trade between Nepal and India: Problems and Prospects
Electricity Trade between Nepal and India: Problems and Prospects
- 주제(키워드) International Trade , Nepal , India , Electricity Trade
- 발행기관 아주대학교
- 지도교수 송영균
- 발행년도 2008
- 학위수여년월 2008.12
- 학위명 석사
- 학과 및 전공 국제대학원 국제통상학과
- 실제URI http://www.dcollection.net/handler/ajou/000000009913
- 본문언어 한국어
- 저작권 아주대학교 논문은 저작권에 의해 보호받습니다.
초록/요약
Abstract Nepal is one of the most trade dependent countries in South Asia. India is the major trading partner of Nepal. Because of geographical proximity, trade with India is more convenient than with any other neighboring countries. Trade relation between India and Nepal has a long history. However, despite of all the trade treaties between two countries, India rejoices the economies of scale where as Nepal is facing a severe trade deficit. According to the “Nepal Quarterly Economic Update” published by Asian Development Bank, total export to India decreased by 5.4% and to total imports from India rose 2.7% this year. Through this thesis, I have tried to analyze the problems of bilateral trade in electricity between two countries and what are the significances of the trade. If Nepal continues trading with India then what would be the future prospects of Nepalese economy. The main objectives of the study are to a) Review of Nepal and India electricity trade relation b) Analysis of the electricity market growth of both nations c) Study of Nepal’s water resources as a comparative advantage d) Analysis of the impact of electricity trade, in particular, in improving trade relation in terms of friendly and historical relationship between the two countries. e). Identify the problems and scope and areas of improvement in Indo-Nepal electricity trade relations. Economic growth of Nepal on the basis of hydroelectricity trade is the primary focus of the study. The electricity deficit has the major role in economy growth of the country. At the present context, Nepal and India electricity trade is based on the intra industry trade theory but it will no longer exists in the future when Nepal will only export the hydroelectricity to India. With available data I have tried to analyze numerically that Nepal and enjoy the electricity export led growth. The projected ten years revenue growth is positive and supports the theory of comparative advantage. The cost analysis of producing electricity by using coal (69%) in India since it is the highly dependent factor for power generation for India and by water resources (63%) in Nepal has been shown. Nepal also has the advantage on cost of production because of run of river type which naturally discourages the construction cost of big dams’ reservoirs. Finally, on the basis of my study, it is illustrated that Nepal and India electricity trade relationship is going to grow stronger with the market demand growth. Nepal can rejoice the comparative advantage in producing hydroelectricity and sell it to the highly potential market of India and gain the economic growth for both the countries. Acknowledgements This dissertation would not have been completed without the guidance and support from my advisor Professor Young-Kyun Song. I am very thankful for his encouragements and suggestions during the preparation of thesis. Similarly, I am also grateful to my committee members Professor Soobok Lee and Professor Min-je Sung for their valuable inputs during the defence of my thesis. It would be unthinkable of me not to thank my father and Dhiraj for always encouraging me to pursue my beliefs and dreams. My brothers and aunty with their faithful and loyal support have been instrumental in my endeavours. All of my loved ones’ absolute support gave me the courage to follow this complicated journey and focus on my goals. My sincere thank goes to Mr. R.P Devkota for his immense support on my thesis completion without which my thesis would have remained incomplete. Likewise, my extended thank goes to Mr. Sachidananda Joshi for his priceless suggestions and feedback on my draft thesis. I would also like to thank Mr. Arun Ranjitkar, Mr. Deepesh Man Shrestha, Mr. Jeevan Baniya, Munna, Rita and to all of those who helped me on the entire process of writing my thesis. I am especially grateful to GSIS, all the professors of GSIS and the entire family of Ajou University for giving me the opportunity to learn in a multicultural environment and giving me an edge to explore the world in a different way. Dedication This dissertation is solely dedicated to my dad and my mom whose love and support made me reach so far. Mom, you are always missed and your memories can never fed away. It is your love and blessing that holds me high when I am low and tormented. Dad, thank you for your faith in me and keeping my moral always up. I am so proud to be your daughter.
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Table of Content
Abstract I
Acknowledgements III
Dedication IV
List of Figures V
List of Tables VI
List of Abbreviations VII
Table of Content IX
CHAPTER ONE 1
1. Introduction 1
1.1. Objectives of the Study 4
1.2. Scope of the Study 4
1.3. Methodology 5
1.4. Limitations of the Study 5
1.5. Structure of the Thesis 6
CHAPTER TWO 7
2 Literature Review 7
2.1 Role of International Trade in Economic Growth 7
2.2 Importance of Trade Liberalization and Foreign Direct Investment 8
CHAPTER THREE 14
3 Power Industry Analysis 14
3.1 Bilateral Trade Relationship with India 14
3.2 Nepal India Electricity Trade 17
3.3 Nepal Electricity Industry 18
3.4. Electricity Trade Between Nepal and India: Growth and Trend 24
3.5 A Case Study 31
CHAPTER FOUR 33
4 Comparative Study with India 33
4.1 Trade Theories Applicable to Electricity Trade Between Nepal and India 33
4.2 Market Analysis 36
4.3 Projects and Costs 39
CHAPTER FIVE 41
5 Trade Potentials, Problems and Recommendations 41
5.1 Trade Potential 41
5.2 Factors Inhibiting Electricity Trade in the Past 47
5.3 Recommendations 53
CHAPTER SIX 57
Conclusion 57
References 59
Internet Sources 61
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List of Tables
Table 1: Electricity Distribution 21
Table 2: Total Peak Demand and Available Energy 22
Table3: Electricity Exchange between Nepal and India 24
Table 4: Statement of Tariff for Power Exchange between Nepal and India 29
Table 5: Expected Tarrif Rates 42
Table 6: Energy and Peak Load 43
Table 7: Expected Revenue Growth 44
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List of Abbreviations
NEA - Nepal Electricity Authority
UN - United Nations
INPS - Integrated Nepal Power System
PEC - Power Exchange Committee
GDP - Gross Domestic Product
TFP - Total Factor Productivity
FDI - Foreign Direct Investment
WTO - World Trade Organization
LDC -Least Developed Country
FNCCI - Federation of Nepalese Chambers of Commerce and
Industries
PTC - Power Trade Corporation
IOC - Indian Oil Corporation
MW - Mega Watt
GWh - Giga Watt hour
KV - Kilo Volt
BMI -Business Monitoring International
NPR - Nepalese Rupees
HEP - Hydro Electricity Projects
BOT - Built Operate and Transfer
BOOT - Built Operate Own and Transfer
SANEI - South Asia Network of Economic Institute
PPA - Power Purchase Agreement
IPP - Independent Power Producer
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List of Figures
Figure 1:Annual Energy Generation from Different NEA Power Station 20
Figure2:Consumer Growth 21
Figure 3:Available Energy and Peak Demand 23
Figure 4: Power Development Map of Nepal 26
Figure 5: Energy Contribution 30
Figure 6: All India Cumulative Hydro Target vs Actual Generation 38
Figure 7: Load Forecast 45
