Nepali Times
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Energising the economy


LETTING OFF STEAM: Industries that are unscientifically built without energy efficient technologies are wasting energy and money.

Nepal is the second richest country in terms of per capita hydropower resource in the world, yet it contributes only three per cent of Nepal's total energy. Only 56 per cent of the population has access to electricity. The state likes to boast about Nepal's hydro potential and has made energy a high-priority sector, but it can only supply power to 15 per cent of Nepalis.

The net electricity generated per capita in Nepal is the lowest in the world and so is energy density. Since the state has failed to deliver the required power, households and communities have taken up the challenge and gone into alternative renewables like biogas, solar, wind, and improved water mills. Nearly 90 per cent of consumed energy comes from such sources and about nine percent of Nepalis have access to them.

With more than 12 hours of blackouts during the most critical and productive hours of the day, the economy has been the hardest hit by the chronic energy shortage. While commercial electricity consumption has swelled in the last two decades in large part due to growing consumerism (transport and retail, hospitals, the booming education sector), the government has been unable to meet the demand. And looking at current trends, demand will continue to outstrip supply for another five to six years.

However, even the available energy is being wasted through pilferage, system loss, and careless consumption leading to greater inefficiency and stunting the country's growth. Industries and commercial buildings that are unscientifically built without energy efficient technologies in lighting, heating, ventilation, air conditioning, insulation, roofing, windows, and appliances are the biggest culprits.

Both the state and international organisations have stepped in to encourage industries to minimise energy wastage. The Nepal Energy Efficiency Program NEEP) along with the German aid agency, GIZ have identified the eight most energy-intense industries in Nepal, such as hotels, and are helping them to reduce their energy consumption and save money. Similarly, donor agencies like Winrock and Adelphi are working on capacity building programs for efficient energy use.

Despite these efforts, changing deep-rooted work culture is a huge challenge. Commercial developers are not inclined to improve technologies or switch to greener methods due to high capital costs; industries are ill-disposed to improve the energy efficiency of their equipment and premises because for them energy efficiency is not a prime concern. Since energy bills are a small portion of their overall operating costs, many companies would rather keep the production line running than to prioritise energy savings.

Making industries energy efficient will not be possible until we can change these behaviours and attitudes. This is where government intervention is needed. To ensure that there is acceptance and adoption of energy efficient products and practices across the board, the state should raise the standards for mandatory adoptions and introduce certain incentives.

Adequate monetary incentives like tax credits, tax deductions, solar rebates, and accelerated depreciation could be provided to industries and businesses who comply with energy efficient standards. Minimum energy efficiency quotients should be fixed for industrial equipment, and the adoption of such practices should be made mandatory for obtaining financing. Listed companies should be required to make disclosures on their energy performance, and energy audits should be made compulsory and part of financial audits for all companies to ensure compliance.

In addition, for maximum impact, energy efficiency efforts require greater engagement and participation. Awareness campaigns should be carried out among consumers and businesses to educate them on the benefits derived from making energy saving choices. Commercial property owners and developers must be made to realise that they can fetch higher rents from tenants for more efficiently designed and structured properties. Tenants should be informed that energy efficient properties will reduce their overhead and operating costs in the long run.

There is a saying in Japan about food: fill your stomach only 80 per cent. Here in Nepal, it may be premature to talk about energy efficiency until there is enough electricity to meet the country's demand.

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(11 JAN 2013 - 17 JAN 2013)