27 May - 2 June 2016 #810

Mustering up energy to face the future

Petroleum is volatile, wind is uncertain, solar has storage issues, there is no alternative to large-scale hydropower
Om Astha Rai

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When India turned off the tap on Nepal‘s petroleum imports for five months last year, Ranjana Silwal spent entire days waiting in line for precious cooking gas. She then bought an electric stove, and realised that it was more energy-efficient and cost-effective than gas.

Silwal started cooking on electricity, as did tens of thousands of Nepali families. But overloaded transformers started exploding all over the country. The Nepal Electricity Authority (NEA) reported 35 transformer explosions in just one day in November in Kathmandu.

“I wanted to use my electric stove, but there was no electricity,” Silwal recalled. “But if there was enough electricity, no one would use gas cylinders.”

The Indian Blockade was a stark reminder to Nepalis that dependency on imported fossil fuel is not sustainable and it was time to have a national policy to switch to cleaner, cheaper and more efficient energy like electricity, solar and wind.

During the blockade, Prime Minister KP Oli made ambitious promises to rid Nepal of electricity rationing in one year. Early this month, the government announced a target to generate 10,000 MW electricity by 2026 and talked about fulfilling ‘basic’ and ‘actual’ demand.

Bikram Rai
During the blockade, Ranjana Silwal bought an electric stove, and realised that it was more energy-efficient and cost-effective than cooking gas

Water resource analyst Ratna Sansar Shrestha says the prime minister’s promises ring hollow, and is puzzled by what Oli meant by meeting ‘basic’ and ‘actual’ demands. “It will be a waste of time to pin our high hopes on what the prime minister says. His target is 10,000 MW in 10 years, but we already need 6,000 MW right now if we really want to provide power in adequate quantum to industries and replace fossil fuel.”

Despite having a potential to generate 43,000 MW of electricity, Nepal’s per capita electricity consumption is less than 100 kWh – the lowest in South Asia. Nepal’s installed hydropower capacity is just 787 MW, which is less than half of the demand. The import of 90MW from the Dhalkebar-Muzzafarpur transmission line doesn’t even make a dent on the shortfall.

Shree Raj Shakya of the Centre of Energy Studies (CES) says: “People have woken up to the need for an integrated policy that ensures that our energy sources are diverse, cleaner, and sustainable. It is now time for the state to wake up.”

Electricity demand has already exceeded 1,300 MW, and is expected to reach 1,600 next year. Experts say the demand is very low because people know electricity is scarce. The latest National Energy Strategy Report by the Water and Energy Commission Secretariat shows that firewood still contributes 77 per cent of Nepal’s energy needs, and trailing much behind is fossil fuel with just 8 per cent. The share of electricity is only 2 per cent, and solar is not even 0.5 per cent.

Shakya of the CES says this is a very precarious situation. “Over dependence on just one source is a threat to our energy security. We must reduce our dependence on biomass and fossil fuels, and promote hydro, solar, wind and other clean energies.” An optimum energy mix would reduce the share of biomass to 25 per cent to protect our forests.

The milestone in energy was the 1992 Electricity Act, which opened Nepal to private and foreign investment in hydropower. New power projects quickly came on line and Nepal actually had a surplus of electricity in the mid-1990s. But the Maoist conflict delayed all power projects, leading to worsening power cuts for the last 12 years.

Analyst Ratna Sansar Shrestha does not entirely blame the war for delayed power projects. He says the real reason is the tendency on the part of investors to sit on hydropower licenses for long periods without beginning projects. The Ministry of Energy has issued licenses for projects to generate more than 12,000 MW, but he says licenses for 8,000 MW worth of electricity are being held by foreign companies, mostly Indian.

Shrestha proposes raising the bank guarantee from investors to discourage them from sitting on river projects, expanding the transmission network and upgrading infrastructure. “We have a huge electricity market within Nepal, and we must cater to it before exporting hydropower to India,” he says.

Sunny and windy tomorrows

Bikram Rai

The five-month Indian Blockade was a blessing in disguise for Nepal’s solar industry. The Alternative Energy Promotion Centre (AEPC) had declared a solar subsidy for city dwellers, but few had taken up the offer. But during and after the Blockade, the sale of solar photovoltaic (PV) cells increased dramatically.

About 600 households have installed PV cells in Kathmandu after the blockade began in September of last year, and installed capacity from solar has now crossed 40MW. This week, the AEPC revised its policy, declaring more solar subsidy for those whose houses were destroyed by last year’s earthquakes.

“Solar subsidy is an excellent policy,” says Jagan Nath Shrestha, President of Nepal Solar Energy Society. “We are making slow but steady progress in generating solar energy. Hydro is definitely our top priority, but it takes years to build one hydro project, but solar is right here with minimal subsidised investment and can be up and running in no time.”

But the AEPC is wary about people installing solar only as long as there is a subsidy. Ram Prasad Dhital of the AEPC explains: “This is why our subsidy policy requires people to invest their own money, too.”

Prime Minister K P Oli was ridiculed when he proposed the development of wind power, but it is not a wild idea. Nepal has the potential to generate 3,000 MW from wind energy, with the hills on the rim of Kathmandu Valley alone capable of producing 70 MW.

Wind is erratic and utility-scale solar power needs storage for non-daylight hours, they can never be alternatives to hydropower. But relatively quick and easy installation and low operational costs, experts believe, give Nepal the potential to have a sunny and windy future.

Read also:

A fossil economy, Editorial

Back to the dark age, Om Astha Rai

A new energy mix for a new Nepal, Suraj Pandey

Mirage of prosperity, Bishal Thapa