Nepal Case Study on

ENVIRONMENTAL IMPACT ASSESSMENT OF

MULTI-FUEL POWER PROJECT
1.0 Introduction

1.1 Project Description

Duhabi Multi-fuel Project (DMP) is situated at 10 km north-west of Biratnagar, in

Morang District of Koshi Zone, Nepal. Koshi Highway, connecting Biratnagar with
the National East-West Highway passes adjacent to the power plant. Proposed
extension aims to installing two 6.5 MW units, VASA 32 series Wartsila Diesel
Engine at the existing 26 MW Duhabi Multi-fuel Power Plant, to the east of the
existing power plant building, integrating with the existing system. The extension
units will incorporate noise controlling devices, air emission stacks (30 m in
height), additional fuel storage tank, settling tank, sludge tank, cooling tower, and
deep tube well, etc.

1.2 Environmental Setting of the Project Area

The project area is drainage-deficient and receives torrential rainfall in the monsoon
season (June to September) by the virtue of being in Terai (plain) region of Nepal.
Surface soils are permeable and the ground water table lies at a very shallow depth.
Wind conditions are generally stable except in the pre-monsoon season. The area is
predominantly industrial with intermittent residential clusters in between; along
with agricultural farms.

The existing DMP, initially, was not equipped with adequate noise controlling
devices, adequate emission discharge system (short stacks), waste water treatment
facility, sludge and solid waste control system and ultimate disposal mechanism
etc. Under the prevailing geo-climatic conditions and land utilization practices, it
exerted a series of adverse impacts to the local physical, biotic, socio-economic
and cultural environments.

1.3 Objective of EIA

The overall objective of the study is to identify, analyze, and interpret additional
impacts of 13 MW Multi-fuel power plants over the existing 26 MW plant, on the
physical, biotic and socio-economic and cultural environment in the project area
and also to recommend mitigative measures and monitoring plans for the use of
project proponents and decision-makers.

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1.4 Methodology

EIA study for 13 MW extensions on Duhabi Multi-fuel Power Plant was

conducted in accordance with the National EIA Guidelines (1993) and EIA
Guidelines for Industry Sector (1995). Other guidelines and literatures were also
consulted to accomplish the task. A few of the other consulted guidelines were:
Asian Development Bank's Environmental Guidelines for Selected Industries and
Power Development Projects (1990); Environmental Assessment Source Book,
Volume III; Guidelines for Environmental Assessment of Energy and Industry
Projects, Environment Department; World Bank Technical Paper Number 154,
The World Bank, Washington, DC, 1992; Guidelines for Environmental Impact
Assessment in Development Assistance, 1989, FINNIDA; etc.

This EIA study of 13 MW extension on Duhabi Multi-fuel Power Plant was mainly
based on environmental audit of the existing 26 MW Multi-fuel Power Plant.
Environmental Impact Assessment Study of the similar power plants in the
subcontinent have also been reviewed and evaluated in depth in order to predict the
impacts for the project.

To meet the objectives as mentioned in the TOR and to identify and weigh the
significance of environmental issues, a scoping exercise was undertaken. Scoping
was also helpful in determining the level of field information required for a full-
scale EIA. Preliminary exercises by the team of experts were started by reviewing
generic and sectoral EIA guidelines and literature with regards to the Multi-fuel
Power Plant operation in Duhabi, Biratnagar. With completion of this exercise, the
team of experts came up with the significant environmental issues related with
Multi-fuel Power Plant operations. A scoping exercise at the presence of
responsible officers of the proponent and members of the community was
conducted to finalize the major issues, and level of field investigation required for a
full scale EIA. Based upon this exercise, an inception report was presented to the
proponent for their final approval. After the acceptance of the report by the
proponent, field study was conducted at the DMP facility and the adjoining areas to
collect field level information in detail on the following issues:

1. Physical Environment
2. Biotic Environment and
3. Socio-economic and Cultural Environment

The analysis, interpretation and reporting was done on the basis of available
baseline data followed by a series of predictions about magnitude, extent, and

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 duration of the impacts identified. The following paragraphs reveal the assessment
of the physical, biotic, and the socio-economic and cultural environment.

(i) Assessment of the Physical Environment

Review of the data furnished by the project appraisal report (FINNIDA, 1994),
field study and auditing and monitoring of the existing 26 MW Power Plant at
Duhabi and their in-depth analysis and evaluation were the main methods utilized
to assess the potential impacts on the physical environment.

Field Observation
Field observation mainly focused on the land form characteristics, surface and
subsurface water and their hydrology, geomorphic processes like sedimentation,
erosion, inundation etc., meteorological characteristics and their seasonal variation
etc. The gathered field observations were then related with available information to
evaluate the overall physical characteristics of the area and possible impacts from
the project to the surroundings.

Auditing of the 26 MW Multi-fuel Power Plant

Detailed auditing of the 26 MW Multi-fuel Power Plant process, material input,
waste output, power output, waste management, administration, plant
management, occupational safety and health management etc. was conducted in
order to evaluate the current management practices and the nature of likely impacts
from the plant. Oil transportation and present oil handling methods were looked in
detail and major leakage points were identified. The total volume of daily oil
leakage from different points was calculated and the current handling methods of
such leakages and their impacts on soil and water were assessed and interpreted.

Monitoring
Monitoring to elucidate the quality of emissions, noise, sludge and waste water
from the current plant was conducted. The results obtained were assessed to
predict the project’s impacts on air, water, land, and biological environment.

A. Sludge Monitoring and Analysis

Sludge is the toxic substance generated during the operation of the plant and its
management is a key issue in the impact assessment. Representative sludge samples
from the sludge tank and sludge waste tank were taken and analysed following standard
procedures of sampling and analysis

B. Air Pollution by the Plant

The major air pollutants generated by the DMP were SO2, NOx and CO. Gaseous
emission from stack was monitored for estimation of air pollutants and its load in
ambient air. Quantity and quality of emission of air pollutants from the stack was

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 assessed by stack monitoring of SO2, NOx, and CO. For gaseous emissions detection
precision was 1 ppm.

Based on the environmental implications, mitigating measures for emission to control

the pollution were suggested. Controlling measures included estimation of stack height
which could best suit for proper mixing of the air. In addition to the stack height, other
possible mitigating measures were also looked and recommendations were made.

C. Waste Water, Surface/Subsurface Water and Soil Analysis

Samples of both surface and subsurface water, soil and waste water of the plant
and the surrounding areas were taken and analyzed to analyze the impacts of oil
leakage and mishandling.

D. Noise Pollution
Noise level at the DMP premises and in the surrounding locality were measured in a
weighted decibel by using noise level meters (Rion, Japan) according to JIS C 15 1502,
1505, and 1512. Noise levels up to a distance of 500 m from the DMP facility were
measured to get knowledge on the noise level around the DMP and its impacts in the
surrounding working environment.

(ii) Assessment of Biotic Environment

While assessing the biotic environment, field observation, checklist and
questionnaires were used to determine the type of vegetation, aquatic life and wild
life of the area. Specific information on these aspects with regard to their status,
distributions and abundance were collected during the field survey for impacts
prediction.

(iii) Assessment of Socio-Economic and Cultural Environment

The population in and around the study area that have been directly affected by the
project (DMP) were investigated. Structured and unstructured questionnaire sets were
developed to establish the characteristics of the affected group, including ethnicity,
occupation and skill levels, income, land holding and value, livestock, education, health
condition, social structure, and age/gender factors. Random sampling was done and 35
household surveys were conducted including Focused Group Discussion. Similarly,
sixteen workers from DMP, working in different environmental conditions and
positions were selected randomly and questionnaire survey was conducted. PRA and
RRA methods have been adopted while collecting information. Field observations,
public hearing, and checklists were utilised to collect information on the social, cultural
and economic aspects.
The impacts of noise, waste water, solid waste and air pollution on local people and
livestock were discussed. Detailed analysis and interpretation of the socio-economic

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 study was done. The attitude towards upgrading of the project development was
investigated by interviewing local people as well as different personnel who were
working in different sections of DMP.

2.0 Nature and Scope of Issues

2.1 Major Issues

The exiting 26 MW DMP exerts several emissions and pollutants, some of which
have significantly impacted the local environment. Some of the issues and causes
are as follows:
• Installation of several noise producing equipments such as: Turbo-charger,
Compressor, Cooling Towers, Ventilators, Air Charge Units etc.
• Emission of large volume of harmful greenhouse gases (CO2, CO, NOx, SO2
etc.)
• Consumption of fossil fuel for the power plant operation and lacking in
capacity of quality control mechanism leading to generation of toxic sludge.
• Generation of waste water having concentration of oil, grease and chemical
toxicants.
• Rise of ambient temperature within the power-plant.
• Low level of employment opportunity to the local people leading to less
harmonious environment with local community.

2.2 Key Players

NEA, a government of Nepal owned utility decided to add two 6.5 MW units of
Diesel engines and the engines were to be supplied by Wartsila Diesel, Finland. The
Environment Division of NEA was supervising the EIA study and monitoring the
construction works.

3.0 Process and Procedural Context

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3.1 Current Policies and Legislations

Environmental management was relatively a new subject in Nepal during the

1990’s. Some of the existing environmental policies and legislations are briefly
mentioned here.

• The Constitution of Nepal, 2047 (1990)

• The National Conservation Strategy for Nepal (1988)
• Eighth Five Year Plan (1992 - 1997)
• National Environmental Impact Assessment Guideline (1993)
• Water Resources Sector Guidelines for Power and Irrigation, 2051/1994
(Draft)
• National Environmental Policy and Action Plan (NEPAP) (2050/1993)
• Industrial Enterprise Act, 2049 (1992)
• Land Acquisition Act, (2034/1977) and first amendment 2049/1992
• Labor Act 2048 (1991)
• Electricity Act, 2049 (1992)

EIA study of DMP was done by NEA upon the suggestion of FINNIDA. During
that period, there was no legal binding for any project to get approval of EIA
report even though the Electricity Rule, 1993 suggested the contents for the EIA
report and made the EIA study mandatory.

3.2 Relevant Institutions

The following institutions are directly related to the administration of the EIA study
of the DMP.
• The Ministry of Water Resources (MoWR)
• Ministry of Population and Environment (MoPE)
• Department of Electricity Development (previously named as Electricity
Development Centre)
• Nepal Electricity Authority (NEA)

During the EIA study period, there was no legislation enforcing any definite
procedure and authorizing any institution for the approval of the EIA reports, so
the consultant prepared the report and submitted to the client, NEA. But then,
NEA also did not have to get approval of the EIA report so it went directly to the
implementation of the project.

4.0 Approach of Study

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 This is the first EIA study conducted in Nepal without the help of foreign
consultants or advisors under their prominent banners. All the experts engaged in
this study were Nepalese nationals. National Environmental Impact Assessment
Guidelines, 1993 was extensively used while conducting EIA study. World Bank
Guidelines and Operational Directives, ADB Guidelines, FINNIDA Guidelines,
and other guidelines along with the relevant literatures were studied and also taken
into account while formulating the study approach and methodology. The
guidelines, comments, and suggestions provided by the NEA during the study
period were also of an immense value. Therefore, it is for sure that with the effort
of all the key actors such as: NEA, DMP and the consultants, the EIA study was
successful.

4.1 Environmental Impacts

4.1.1 Environmental Impacts

After a detailed analysis of the audit results, monitoring data, socio-economic

survey and evaluation of identified environmental impacts, the environmental issues
were rated for a comprehensive assessment. The ratings of the significant negative
as well as positive environmental impacts were analysed.

4.1.2 Identification and Prediction

Since, the proposed extension is for 50 percent increment in power generation of

the existing facility at DMP, waste water generating sources such as rinse water,
facility use and cleansing, drainage from additional sludge tank is proposed to be
added. The current scenario itself is in severe negative condition which needs a
sincere management. The project document for further extension overlooks to
manage waste water, although establishment of a sludge storage tank of 40 cubic
meter and sludge treatment unit (205 l/hour) may withhold overflowing on
temporary basis. Henceforth, further extension will, of course, be an extra burden
with high magnitude and irreversible effects on local environment unless managing
the present situation is managed.

The emission of air pollutants is the function of fuel quality and operation hours of
the power plant which depends on peak load demand in future. In order to
increase the atmospheric dilution of exhaust gases, provision of the increment in
the stack height (30 m above the ground level) is a partial solution. This may not
compensate for the gaseous emission due to smaller height of the existing stacks.

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 To minimize the adverse effects on the local air quality, existing stacks height
should also be increased. Otherwise severity of air pollution in terms of magnitude,
extent and duration will not select.

The proposed extension plant proposes to limit noise level to the World Bank
recommendations at the plant boundary. However, noise level limiting instruments
are provided to the proposed plant and there is no provision for the existing facility.
This clearly indicates that there will be no improvement in the existing situation as
discussed above.

The extension project proposal does not have provision of solid waste
management. Since the additional facility will generate solid waste by 5 to 7 kg. per
day, more than the current quantity, the risk of pollution and hazards due to waste
is envisaged to increase.

Based upon these analyses and identified environmental issues of existing power plant,
the significant environmental impacts are identified and predicted for 13 MW capacity
power plant extension.

4.1.3 Alternative Analysis

FINNIDA (1994), Appraisal report has analysed with regards to the location of the
proposed Multi-fuel Power Plant. Based upon the analysis for the proposed size of the
project, extension of the existing power plant at Duhabi is the best alternative for
proposed plant location. EIA team of experts agree to the conclusion made in the
FINNIDA appraisal report with regards to alternative site for the proposed project.
Three alternatives i.e. do nothing, implement the proposed project, and implement
proposed project incorporating improvements in the existing facility have been
considered

For a country like Nepal, hydropower development should always be regarded as the
only long-term alternative of power development. Currently, very little has been done to
harness the water resources in a planned fashion to meet the national requirements.
Multi-fuel power plants are short-term alternatives or emergency alternatives to fulfil
the power demand. These alternatives should not be taken as the ultimate option and
the country should not depend upon them as the main source for power supply in long
term. Hence, there is a need to balance these thermal power plant systems to the
emergency need alternatives of hydropower.

4.1.4 Mitigative Measures

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 Mitigative measures proposed here are intended for the best alternative identified
above. The measures proposed are to be adopted in order to minimize or eliminate
the adverse impacts and to maximize the positive impacts, implementation of
mitigation measures only for the proposed extension will have minimum impact on
the environment. From the environmental audit study of the existing power plant, it
is found that the plant has already contributed to aggravate negative environmental
impacts on water quality, air and noise levels in the surrounding areas. Proposed
sets of mitigative measures are not the alternatives but are complementary to each
other. It is therefore, suggested that these mitigation measures be implemented as
far as possible.

Negative environmental impacts of the Duhabi Multi-fuel Power Plant relates to

the discharge of stack emission, untreated waste water, improper management and
handling of fuels and sludge during transportation and storage, elevated noise
levels, etc. Waste reduction and control of wastes at source is the best solution to
abate the impact on biophysical and social environment including community and
occupational health.

4.1.4.1 Responsibility

It is the duty of Nepal Electricity Authority to establish a separate environmental

management office in order to coordinate environmental activities concerning
mitigation and monitoring. Specially, trained and knowledgeable environmentalists
have to be deputed at Duhabi Multi-fuel Power Plant. The implementation of the
proposed mitigation measures will be the responsibility of Duhabi Multi-fuel
Power Plant, Nepal Electricity Authority, and donors in coordination with
appropriate government agencies and the local communities.

4.1.5 Monitoring

The purpose of monitoring is to check whether the predicted impacts from the 13
MW Multi-fuel Power Plant are within the acceptable limits, and establish baseline
information which shall provide early warning of unacceptable environmental
conditions. Multi-fuel Power Plant is recommended to develop and initiate a
monitoring program a year in advance of the construction phase of the project. It
will help to determine the baseline conditions. Constructional and operational
monitoring will determine the degree and significance of impact that will occur
during these phases of the project in relation to the baseline conditions. It is the
responsibility of the power plant management to carry out in-house environmental
monitoring of the power plant. DMP should depute an environmental expert to
conduct timely environmental monitoring.

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5.0 Results and Implications

When the EIA report was submitted to NEA, the concerned authority immediately
sent the report to the FINNIDA for review and comments. As the report was
comprehensive, the FINNIDA appreciated the report and suggested NEA to fully
comply with the report.

One expert from the Environment Section of NEA was made responsible to
oversee and monitor the mitigative measures being taken during the construction
and installation of the 13 MW Diesel plants.

6.0 Lessons Learnt

There are some significant negative impacts of the DMP and except for the air, noise
and sludge emission, it is hoped that the other impacts are not of the significant value
even at the local level. The tentative additional mitigation cost for the project is
estimated at NRs. 10 million. This does not include the cost of silencers, plantation,
solid waste, sludge management, air pollution control devices and their recurrent
costs. Besides, the project has to allocate annually NRs.1.25 million for impact
monitoring and occupational health and safety measures.

It is recommended to implement the proposed extension of the project only after

incorporating the proposed mitigation and monitoring measures. This will bring
down the level of pollution to the acceptable limit. Besides the management of waste
water, solid waste and sludge; vigilance through monitoring in the issues of air quality,
noise level, water & soil quality, public health, occupational health & safety measures,
fire & accidental hazards and vegetation should be continually done.

7.0 References

ADB, 1988. Environmental Guidelines of Selected Industrial and Power

Development Projects, Asian Development Bank, Manila, Philippines.

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D.P Kothori and Subir Sen, 1996. Minimization of Environmental Pollution
due to Thermal Power Generation - A Novel Approach, Power Development
Strategies for 21st Century, 3rd International Conference, Volume 3, PP 1553-
1561, Kathmandu (Nepal) 4 - 7 March, 1996.
FINNIDA, 1989. Guidelines for Environmental Impact Assessment in
Development Assistance (Draft), Finland.

FINNIDA, 1994. Project Appraisal: Extension of Diesel Power Plant in

Biratnagar, Nepal.

His Majesty’s Government of Nepal, 1992. Electricity Act (1992), Ministry of

Water Resources, Kathmandu, Nepal.

National Planning Commission and IUCN, 1993, National Environmental

Impact Assessment Guidelines 1993, Kathmandu.

Nepal Electricity Authority, 1994. Tender Document for Parwanipur Multi-

fuel Power Plant, Tender Lot No- 1, Vol. 11, Kathmandu.

United States Environment Protection Agency, 1985. Compilation of Air

Pollution Emission Factors, Vol. I: Stationary Point And Area Sources, USA.

World Bank, 1991. Operational Directive 4.01: Environmental Assessment,

Washington D.C., U.S.A.

World Health Organization, 1976, Manual on Urban Air Quality

Management, edited by Suess, M. J. and Craxford S. R., W. H. O. Regional
Office for Europe, Copenhagen.

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Annex 1

Person Preparing the Case Study

Name: Dilli Bahadur Singh

Organization: Department of Electricity Development,

H. M. Government of Nepal.

Position: Senior Divisional Engineer

Feasibility Study Division

Contact Address: Ga. 1/181; Kopundole, Lalitpur, Kathmandu, Nepal.

Mailing Address: G.P.O. Box-7220 Kathmandu Nepal

Phone: Off: 977.1.4476190, 4480425

Res: 977.1.5542151

Fax: 977.1.4480257, 4480276

E-mail: dillisingh@yahoo.com

Date of Preparation: 21st. Sept. 2003

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