With improved electricity supply and reduced load-shedding
, the Nepal Electricity Authority (NEA) must be feeling like the victim of its own success.
Buoyed by the improving reliability of grid electricity supply, consumers are accelerating purchases of appliances that they might have put off earlier because of power cuts. The gap that the state-owned electricity utility needs to fill is getting larger – the prospects of another winter with long hours of load-shedding suddenly looks hauntingly real.
To meet the challenges of ever-growing demand and persistently short supply, NEA must aggressively adopt what might seem a bit counter-intuitive to its business: get its customers to stop buying its electricity by saving more of it.
Electricity demand is increasing faster than anticipated after reliable electricity supply uncorked latent demand and encouraged the rapid spread of mechanisation. In Nepal, reliable electricity supply, just like economic growth, is a big driver of power demand on its own.
Studies commissioned by NEA and the Investment Board of Nepal (IBN) project that peak demand could increase between 8.5%-10% per year to reach 3,200MW and 3,660MW respectively by 2025–2026. Even at these growth rates, energy demand will be approximately 15,460 million units or 483 units-annual-per-capita, placing Nepal as one of the energy poorest countries in the world.
If NEA offers reliable supplies, if it allows demand to come on to the system, Nepal’s electricity demand will easily be double of what has been projected. From a visioning perspective, Nepal’s energy demand must not be pegged to what we can supply but rather to our true aspirations and needs. One way to address Nepal’s energy challenge is to integrate energy efficiency
centrally within the national strategy.
Energy efficiency can help address Nepal’s complex challenges. In developed countries where there is a demand-supply balance, energy efficiency is about reducing the overall energy (and environmental) footprint. Our goals for energy efficiency are different: 30% of Nepal’s population doesn’t yet have access to electricity. Seventy percent of our energy mix is still traditional biomass fuels. We are dependent on energy imports and our supply chains are vulnerable. These challenges all stem from one common constraint: we don’t have adequate energy supply.
And that is exactly where energy efficiency plays a big role. Doing more with less through energy efficiency will enable us to transfer our savings to those that don’t have electricity. We will be able to reduce imports and the vulnerability to supply shocks. With energy efficiency, we may not be able to reduce our total energy usage but we will be able to make better use of our limited supply.
There are many opportunities for energy efficiency
in Nepal that could deliver immediate impact. NEA’s program of 20 million LED bulbs could deliver immediate saving of 200MW. But why stop there? Why not import more LED bulbs? Why not completely ban incandescent bulbs?
There are similar opportunities across commercial and industrial establishments: in water pumping, street lights, government procurement, better integration of distributed roof-top solar. If pursued systematically, savings from energy efficiency could fully offset electricity imports and current levels of load shedding.
The unique thing about energy efficiency in Nepal is that it could unlock Nepal’s true hydro potential. We can get to 10,000 MW or 20,000 MW of hydro power faster if we first start by saving energy.
The single biggest constraint to adding new hydro plants in Nepal is the need for storage capacity. A reservoir hydropower plant that delivers electricity at peak periods would diversify the system and allow many more run-of-river plants to come online. Storage hydro requires large reservoirs, which are expensive to build, hard to finance and have high social-environmental costs.
Could energy efficiency replace the need for a large reservoir based storage hydro plant? Absolutely. What is the difference between a storage plant that provides energy at peak hours versus a smart energy efficiency system that can reduce selected loads at the same peak hours? There is none.
An institutional approach to energy efficiency is urgently required. Enabled by today’s technology and management systems, distributed energy efficiency can deliver the same system benefits as a reservoir based storage hydro plant – and more. We have been intoxicated by the prospects of bountiful hydro power potential for so long that we have cast energy efficiency as a national antithesis. But if adopted and implemented properly, energy efficiency can meaningfully help address Nepal’s challenges on energy access, security and import dependence.
Bishal Thapa is Managing Director of Saral Urja Nepal, an energy services company
How to avoid power cuts this winter, Shreejana Shrestha
From hydro to solar, Navin Singh Khadka
No alternative to alternative energy, Bhrikuti Rai
The world’s ‘Solar King’, Ric Wasserman
Mustering up energy to face the future, Om Astha Rai