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PES for Water Storage
There is a growing interest in PES among countries in the Table: Land use in the Kulekhani Watershed in 1991
Hindu Kush-Himalayan region. Recognising the value of
Land use category Area (ha) %
incentive-based mechanisms, China has implemented an
Sloping terrace 4254 34.0%
Upland Conversion Programme while India has initiated
Level terrace 237 1.9%
a Watershed Development Programme to reduce fl oods
and droughts. In addition, there are now benefi t sharing
Valley terrace/fans/tars 713 5.7%
policies in the hydropower sector in most Himalayan
Forest 5455 43.6%
countries. This article examines the use of PES as a
Shrubland 1147 9.2%
policy instrument in the Kulekhani watershed in central
Grazing and grassland 200 1.6%
Nepal, and how it has played a role in enhancing the
Barren land/rock 50 0.4%
capacity of water storage.
Lakes 216 1.7%
Gullies/landslides 18 0.1%
Kulekhani hydropower (Nepal)
Other 210 1.7%
Total 12,500 100%
The Kulekhani watershed is located 50 km southwest of
Kathmandu and is the source of water for the Kulekhani
Source: IWMP 1992 in Sthapit 1996
reservoir, which supplies water to hydropower plants
downstream. The 92 MW Kulekhani hydropower plant
precipitation; this rain is the main source of water for
is different to most hydropower plants in Nepal in that
agriculture. In general, there is a shortage of water
it relies entirely on monsoon rain collected in a reservoir
during the remaining eight months.
rather than on rivers emerging from the Himalayas. As
The Kulekhani watershed receives 1500 to 1700 mm
with similar reservoir systems, the plant was designed to
of rainfall annually on average but the rainfall is often
supplement peak load in the drier seasons.
uneven. In July 1993, the watershed received 542 mm
In 1973, Nepal generated 39 MW of electricity, of
over a 24-hour period with rainfall reaching 80 mm in
which 32 MW came from run-of-the-river (RoR) systems
an hour, causing a massive landslide, fl ooding, and
(Ghimere 2004). At this time, the demand for electricity
siltation. The plant required major repairs. Over 20
was increasing by around 4% per year. The generating
years of operation, the reservoir has lost more than 25%
capacity of the RoR plants was nearly one-third less in the
of its storage capacity due to siltation (Sangroula 2006).
dry season. In 1980, the peak load requirement was 65
MW, indicating a need for an additional 40 to 60 MW
The PES mechanism
by the mid 1980s. The 92 MW Kulekhani hydropower
With the rapid loss in capacity of the reservoir, the
plant was commissioned by the Nepal Electricity Authority
government recognised that Kulekhani was a critical
in 1982. The original gross capacity of the reservoir was
watershed of strategic importance and started programmes
85.3 million cu.m, of which 73.3 million cu.m was live
targeted at participatory conservation. More attention was
volume. The reservoir, designed with a life-span of 50
paid to promoting proper land use management in the
years, was expected to last 100 years (Sthapit 1996).
uplands to reduce siltation. Activities to promote watershed
However, the main problem for reservoir type hydropower
conservation included community forestry, conservation
plants in Nepal is sedimentation. Sediment loads in
education, terrace improvement, and fruit plantations.
Nepal’s watersheds are among the highest in the world;
85% of the runoff occurs during the monsoon yielding
Various studies (e.g., Amatya 2004; Ghimere 2004)
98% of the sedimentation load (Mahmood 1987 in
have shown that soil erosion from agricultural land is
Sangroula 2006).
as much as 73 times higher than that from forested
land. Analysis of land use patterns showed that forest
The Kulekhani watershed
cover in the watershed declined between 1978 and
1992, but that it had recovered to earlier levels by
The hydropower reservoir depends on the water from a
2001. An analysis of sedimentation patterns indicated
12,500 ha watershed with a mosaic of different land
that the rate of sedimentation in the Kulekhani Reservoir
uses (Table). The watershed has 8000 households with
declined with the increase in forest cover and that the
over 45,000 residents, spread over 8 VDCs living in a
dry season water fl ow gradually increased (Upadhyaya
subsistence economy based on (sloping land) agriculture
2005). Maintaining forest cover appeared to be an
and livestock rearing. Communities also manage forests
effi cient way of reducing siltation. In 2003, in line with
to extract timber, fuelwood, fodder, and litter. The four
this, the Rewarding the Upland Poor for Environmental
monsoon months account for around 80% of the annual
Services (RUPES) programme (WAC no date) started
32
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