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Official Name:
Federal Democratic Republic of Nepal

National Designated Entity

Type of organisation:
Mr. Raju Sapkota
Under-Secretary and Head, Climate Change Section
+977 1 4200090

Energy profile

Nepal (2012)

Energy profile
Energy profile
Extent of network

Population Access to Electricity (2011): 56% (including on-grid and off-grid)Rural: 49%Urban: 93%A little over half (56%) of households in the country have access to electricity (including off-grid solutions). On the other hand, 33% of households still depend largely on kerosene for lighting. Almost all households (99.7%) in the urban areas of Kathmandu valley have access to electricity .There is a disparity between rural and urban access to electricity. More conservative estimates suggest only 18% of Nepal’s population has electricity, while 16.1 million people do not have access to electricity.At present, the total installed capacity of the Integrated Power System is 400 MW, with hydro-plants of 75 MW or smaller contributing about 85% in the total system capacity mix. The main transmission infrastructure operates at 132 kV, and runs parallel to the Indian border in the south of the country. Plans are in place to upgrade much of the current transmission infrastructure to 220 kV soon. 

Renewable energy potential

Because of the country’s increasing dependency on imported energy sources, and environmental and public health hazards associated with the traditional practices in the use of biomass as a source of energy, a decentralized, efficient, low cost and environment friendly energy supply system based on diverse indigenous renewable resources is the present need of scattered settlements in the country .HydropowerThe distinct topography, with its unique high hills and more than 6,000 rivers (approx. 2800 miles in total length) provides many opportunities for large and small hydro power development. Nepal is estimated to have theoretical hydro potential of 83,000 MW, of which 42,000 MW is economically feasible . Yet so far the country has tapped less than 650MWof this potential and hydroelectricity meets less than 1% of total national energy consumption .  Four hydropower plants, with a total installed capacity of 353.4 MW, are under construction. Chamelia (30MW) and Kulekhani-III (14MW) are planned to be completed in 2011 .Solar Energy Nepal, receives ample solar radiation. The average varies from 3.6–6.2 kWh/m2/day, with approximately 300 days of sun a year. The development of solar energy is thus reasonably favourable in many parts of the country. As per the report of the Alternative Energy Promotion Centre (AEPC), 2008 under the Solar & Wind Energy Resource Assessment in Nepal (SWERA), the commercial potential of solar power for grid connection is 2,100 MW.  With National average sunshine hours of 6.8/day, and solar insolation intensities of about 4.7 kWh/m2/day, there is a huge potential for Solar Water Heaters (SWH), Solar Dryers (SD), and Solar Cookers (SC). SWH have been fully commercialised, and by  2009 more than 185,000 SWH had been installed. SD and SC are still in the phase of commercialisation.Wind Energy Nepal has considerable wind potential. The theoretical potential has been estimated at over 200 MW. Extreme wind speeds of 46.76 m/s have been recorded, with 238 kW/m2 of energy density. Potential sites for wind power systems include the Mustang district, and wind/solar hybrid systems have been trialled for rural electrification in Pyuthan district.Biomass EnergyBiomass dominates the energy mix in Nepal, and its potential is still considerable. Total growing forest stock is estimated at 53 million m3. Biogas, in particular, has been utilised, with production capacity of 924,000 m3 by 2004. The estimated potential for family-sized biogas plants, operating on agricultural residues primarily, amounts to roughly 200,000 units.Geothermal EnergyAs of 2004, 32 hot water spring sites, with temperatures exceeding 50ºC had been identified. Currently, geothermal energy provides roughly 2.1 MWt . Further investigation and development of the resource is ongoing. 

Energy framework

RE development continues to be a high priority program of government as it provides a least cost solution to remote, sparsely populated areas unviable for grid extension, while being clean, safe and environmentally friendly. GoN's goal for the next 20 years is to increase the share of RE from less than 1% to 10% of the total energy supply, and to increase the access to electricity from alternative energy sources from 10% to 30%.  The government plans to invest USD 1,076 million in RE by 2020, which will include support for hydro power, solar PV and biogas technologies. The sources of funds envisaged include government revenue, support from development partners, loan financing from financial institutions and private equity. Complementing the above, the current Three Year Plan (2010-2013) envisages the addition of 15 MW of mini/micro hydro power; 225,000 solar home systems; 90,000 domestic, 50 community and 75 institutional biogas plants; 1 MW of wind power; and 4,500 improved water mills .National Electricity Crisis Resolution Action Plan 2008 The government brought out a 38-point Electricity Crisis Resolution Action Plan in Poush 2065 (2009) that provides for immediate, short-term and long-term programmes. Immediate programmes include determining a Power Purchase Agreement at a flat rate for power plants up to 25 MW, 7 years of income tax holiday for such plants, and waiver of the provision for performing an Environmental Impact Assessment (EIA) for power projects expected to achieve implementation by Chaitra 2068 (2011). The Plan also included plans to import more power from India, build 200 MW of thermal power plants, encourage power generation through captive plants by subsidising the additional cost involved in producing power from oil, and strengthen and add transmission capacity. It will also encourage solar and wind power through various concessions and facilities. Emphasis has been given to encouraging efficiency through low energy lightbulbs, a system of energy auditing, a code of conduct to save energy, and raising public awareness for demand-side management. The concession also included an 80% subsidy for micro-hydropower below 1 MW capacity.Short-term measures included additional transmission lines to import power from India, increased power production through the efficient operation of generation facilities, control of technical losses, and controlling theft of electricity. Long-term programmes include high capacity transmission lines between India and Nepal and large multi-purpose projects. It also includes financial restructuring of the Nepal Electricity Authority (NEA).Rural Energy Policy 2006 The  Rural Energy Policy 2006 has been designed, in particular, with the following strategies:Development of a policy which addresses the energy needs of the rural population;Creation of a rural energy subsidy with clear objectives and criteria for target groups;Development and enforcement of efficient and effective credit systems;Incorporation of rural energy policies of ministries and institutions related to rural development;Effective cross-sectoral and donor coordination of rural energy programs;Adequate information campaigns and education programs; andA broad stakeholder involvement to ensure success.The policy specifically targets the installation of improved biomass technologies to meet cooking and heating needs, off-grid micro-hydro for rural electrification capable of being grid-connected when the grid is extended, solar home systems (10 Wp and above) and white-LED and photovoltaic-based solar lights replacing kerosene lamps. The approach is to move away from per-kW subsidy to per-household subsidy. The program of small solar systems, based on small photovoltaic and white-LED as an immediate and intermediate solution will be more affordable to the poor. The policy recognises solar home systems as a mainstream electrification option for many rural areas, where grid connection and micro-hydropower are not an option for the foreseeable future.Subsidy Policy for Renewable (Rural) Energy (SPRE) 2009  SPRE is the latest policy instrument, which is redefined to make the existing subsidies equitable, inclusive, and effective to promote rural electrification. The policy specifically targets the installation of improved biogas technologies to meet cooking and heating needs, decentralized mini- and micro-hydro for rural electrification capable of being grid-connected when the grid is extended, SHS (10 Wp and above) and white-LED and PV based solar lights replacing poor quality of kerosene lamps. The subsidy was redefined based on per kW generated capacity in MHP projects. A subsidy amount of NRs 12,000 per household will be provided for new MHP project up to 5kW capacity; however, the subsidy will not be more than NRs 97,500 per kW generated. An additional subsidy will also be provided for the transportation of equipment and materials of the MHP project based on the remoteness of the projects.Biogas Support Program (BSP) Presently, the Biogas Support Program (BSP) of the Netherlands Development Organization-Nepal (SNV/N) is the second largest to improved cook stoves (ICS) program for alternative rural energy program in Nepal. BSP also became the first Clean Development Mechanism (CDM) project of Nepal with the registration of 2 projects in 2005. Technology for biogas plant, commonly known as gobar gas by locals, has been available in all 75 administrative districts of the country. As of June 2009, some 2800 village development committees(VDCs) of the total 3913 in Nepal have biogas plants. However, biogas technology is not the panacea for the energy problem of rural Nepal because of several factors. Because the optimum temperature required for biogas production through anaerobic digestion is 35–37 ◦C, cold mountainous regions coupled with chilly winter throughout the country make it unfavourable for biogas production year round.Biofuel Program The Government of Nepal (GoN) announced its Biofuel Program in the fiscal year of 2008/2009 to promote biofuel in Nepal through AEPC. The program focuses particularly on Jatropha curcas L. as a biofuel feedstock for biodiesel production. The program has established 20 modern Jatropha nurseries through 12 different organizations, and has produced and distributed 1.25 million Jatropha saplings to interested farmers and organizations. Also, two processing plants – each with capacity of 1000 l biodiesel per day – have been established through two private organizations.Scaling-up Renewable Energy Program Nepal one of the two Asian countries selected for the Scaling Up Renewable Energy Program (SREP), A targeted program of the Strategic Climate Fund within the framework of the Climate Investment Funds. Multilateral Development Banks (MDB) comprising the Asian Development Bank (ADB), World Bank (WB) and International Finance Corporation (IFC) jointly provide assistance and oversight for the Nepal SREP in collaboration with other development partners including the UN and bilateral agencies.   The objectives of SREP in Nepal are to:leverage complementary credit, grant and private sector equity co-financing,bring about transformational impacts through scaling up energy access using renewable energy technologies (RETs), poverty reduction, gender and social inclusiveness and climate change mitigation, andensure sustainable operations through technical assistance and capacity building. 

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