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Poverty Amidst Plenty: Renewable Energy-Based Mini-Grid Electrification in Nepal

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Book cover Mini-Grids for Rural Electrification of Developing Countries

Part of the book series: Green Energy and Technology ((GREEN))

Abstract

Providing access to electricity to a large section of rural population in Nepal has traditionally been a challenging exercise. This has been exacerbated by difficult geography, poor-socio-economic profile of rural Nepal and moreover by the on-going energy crisis. This chapter conducts an objective assessment of the renewable energy-based off-grid electricity sector in Nepal, with specific focus on micro-hydro-based mini-grid systems by applying a mixed method research design built on both qualitative and quantitative research techniques. While the country’s experiences of developing micro-hydro- and solar energy-based off-grid interventions are captured by qualitative analysis, a standard techno-economic analysis of a micro-hydro mini-grid project is conducted to explore the possibility of introducing additional productive loads and to examine the cost efficacy of generating energy from micro-hydro vis-à-vis solar. Assessment of off-grid electrification options reveals that despite visible progresses, there still exist multiple roadblocks to scale up. Absence of clearly spelt out policy goals, weak institutional designs, low load factors, and lack of adequate finance and overall regulatory concerns stand as major obstacles for off-grid electricity sector development in the country. In addition, project-specific analysis reveals that solar loses out as a cost-effective option compared to micro-hydro. But optimal use of energy generated from micro-hydro-based mini-grids requires creation of productive applications at the local scale on a sustainable basis.

Author V. V. N. Kishore is presently an independent renewable energy consultant and former Professor and Head of Department of Energy and Environment, TERI University, New Delhi.

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Notes

  1. 1.

    Energy Development Index (EDI) of International Energy Agency (IEA) helps in understanding the role of energy in promotion of human development of a country [5]. It is constructed by a set of four indicators i.e. per capita commercial energy consumption, per capita electricity consumption in the residential sector, share of modern fuels in total residential sector energy use and share of population with access to electricity.

  2. 2.

    We largely follow the methodology advocated by IEA for constructing such an index. However due to paucity of data, we have limited only to household level indicators of IEA. Variables are normalised applying the standard normalisation process. Equal weights to each individual indicator are assigned to construct the index.

  3. 3.

    These actors and entities consist of a couple of ministries like the Ministry of Science, Technology and Environment (MoSTE) and the Ministry of Energy (MoE), several government originations and institutions like the National Planning Commission (NPC), the Water and Energy Commission Secretariat (WECS), Alternative Energy Promotion Centre (AEPC), Renewable Energy Test Station (RETS), several donor agencies e.g. Danish International Development Agency (DANIDA), European Union (EU), United Nations Development Programme (UNDP), Norwegian Government, Bank Aus Verantwortung (KfW), Department for International Development (DFID) of UK Government, Asian Development Bank (ADB), a couple of associations like the Nepal Micro-hydro Development Association (NMHDA), and the Solar Electric Manufacturers Association of Nepal (SEMAN), banking and credit lending institutions the Clean Energy Development Bank Limited (CEDBL), the Himalayan Bank Limited (HBL), and the Lakshmi Bank Limited (LBL) and a number of manufacturing and installation companies, NGOs, micro-finance groups, local NGOs, village co-operatives, research institutes and many more.

  4. 4.

    These micro-hydro projects are Khani Khoka (20 kW) in Karve dirtict, Chari Tola (80 kW) in Ramechhap Dictrict, Thulo Khola (50 kW) in Okhaldhunga District, Swara Tap Khola (30 kW) in Khotang District, Lumju Khola (20 kW) in Khotang District, Midim Khola (100 kW) in Lamjung District [24].

  5. 5.

    NRREP is a joint programme of Government Nepal and multiple donor agencies which brings all the individual programmes supported by multiple donor agencies under one umbrella and is executed by AEPC.

  6. 6.

    For analysing the levelized cost of electricity (LCOE) one has to consider the total life time cost of the project which includes the capital costs, operation and maintenance costs, replacement cost, fuel cost and the environmental externalities costs and total electricity produced by the plant during its lifetime. The formula for estimating LCOE is, \( {\text{LCOE}} = \frac{\text{Total life time cost of the plant}}{\text{Total life time useful electricity produced}}. \)

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Author information

Authors and Affiliations

  1. TERI University, New Delhi, India

    Gopal K. Sarangi, D. Pugazenthi, Arabinda Mishra & Debajit Palit

  2. Department of Energy and Environment, TERI University, New Delhi, India

    V. V. N. Kishore

  3. De Montfort University, Leicester, UK

    Subhes C. Bhattacharyya

Authors
  1. Gopal K. Sarangi
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  2. D. Pugazenthi
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  3. Arabinda Mishra
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  4. Debajit Palit
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  5. V. V. N. Kishore
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  6. Subhes C. Bhattacharyya
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Corresponding author

Correspondence to Gopal K. Sarangi .

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Editors and Affiliations

  1. De Montfort University, Leicester, United Kingdom

    Subhes C. Bhattacharyya

  2. The Energy and Resources Institute, New Delhi, India

    Debajit Palit

Annexure

Annexure

Table A.1 Key stakeholders interviewed
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Sarangi, G.K., Pugazenthi, D., Mishra, A., Palit, D., Kishore, V.V.N., Bhattacharyya, S.C. (2014). Poverty Amidst Plenty: Renewable Energy-Based Mini-Grid Electrification in Nepal. In: Bhattacharyya, S., Palit, D. (eds) Mini-Grids for Rural Electrification of Developing Countries. Green Energy and Technology. Springer, Cham. https://doi.org/10.1007/978-3-319-04816-1_13

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  • DOI: https://doi.org/10.1007/978-3-319-04816-1_13

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