Low Carbon Potential: Nepal Case Study

Bhola Shrestha, Associate Consultant, PACLow Carbon South Asia Consultation

Workshop, 26-27 August, 2014 Hotel Soaltee, Kathmandu

Structure of presentation Country context Energy situation and energy sources

Energy consumption by sectors Energy use and energy access Overview of decentralized small scale RE technologies

Status of energy efficiency Electricity demand based on load forecast Energy resources and SE4ALL goals Scenario projection to meet these goals and investment

required and way forward.

Country context land area:147,181 km2

26.49 million population per capita income 700 USD (2012) 25.2% below poverty line (2010) 83% rural population, subsistence agriculture Agriculture contributes 1/3rd GDP, 23% by remittance And tourism another major contributor of economy More than 2 million people working abroad as migrant workers Coalition government’s goal to draft a new constitution within a year

Fig 1: Map of Nepal

Energy situation and energy sources

78%

4%

6%

8%

2% 2%

1%

Firewood

Agriculture residue

Animal dung

Petroleum products

Coal

Grid electricity

New renewable

Fig 2: Energy consumption by fuel type, WECS, 2010

42,000 MW economic potentialhydropower 607 MW generation capacity, 1.4% of its potential. Combined with import and thermal power generation, the total supply in 2012/13 was 720 MW Compared to peak load of 1095 MW. Estimated captive generation capacity of 600 MW in 2010 37 MW of off-grid hydro ( AEPC, 2012) Imported petroleum products worth 0.53 billion USD in 2008/09 61.5 % of its foreign exchange earnings (FEE). In 2011/12, 126% of FEE on the import of fossil fuel. Lack of political consensus,political transition and instability over the past two decades, major impediment for hydropower development

Fuel Type % 2000/01 %, 2008/09

Traditional 87 87Commercial 13 12Renewable 0.36 0.68

Table 1: Trend, energy consumption by fuel type

Energy consumption by sector

89%

5%

3%1%1%

ResidentialTransportIndustrialCommercialAgriculture

Fig 3: Energy consumption by sector

Fuelwood87%

Agri residue

4%

Animal dung6%

Modern Energy Sources

3%

Coal58%

Petro-leum

products

4%

Electricity23%

Agri-culture residue

10%

Fuel wood5%

HS diesel67%

LS diesel

0%

ATF12%

LPG1%

Gasoline20%

Fig 4: Residential sector energy consumption

Fig 5: Industrial sector energy consumption

Fig 6: Transport sector energy consumption

Commercial sector consumes 1.3%Agriculture sector consumes 0.9%

Energy use and access

Bangladesh

China India Nepal Pakistan Sri Lanka Africa Asia Latin America

World0

10

20

30

40

50

60

70

80

90

7.1

75.4

22.6

14.220.9 18.4

28.1

35.6

51.9

76.6

Fig 7: Per capita total primary energy consumption, GJ (IEA 21010)

Per capita annual energyconsumption: 14.32 GJ (2010) World average (2010) : 77 GJ

Per capita electricity Consumption: 106 (2011) World average: 2806 (2009)

Access to electricity: 74.7% 74.38 % household relied on traditional energy source for cooking in 2011. 75% population live in energypoverty

Global GHG contribution is 0.025%, one of the lowest.Fourth most vulnerable country affected by climate change

Decentralized small scale RE technologies

Technology dissemination

Potential, million household

Outreach, millionhousehold

Target , July 2017, million household

Improved cook stoves

3.7 0.74 (2012) 0. 475 ICS

Household biogas plants

> 1.3 0.290,510 (2012) 0.130

Solar home system - 0.411258 (9.9 MWp) (2/2014)

0.6

Micro hydro - 0.180755 (18.1 MW) 0.15 (25 MW)

Key drivers for success: Financing mechanism combined with quality monitoring Market approach for service delivery Institutional arrangement (Alternative Energy Promotion Centre) Deregulation of distributed generation

Source: AEPC/NRREP

Status of energy efficiency No energy conservation policy, no legislative mechanism

and specific institutional arrangement for energy efficiency. Very high energy intensity: 1.01 TPES/GDP compared to

international 0.25 TPES/GDP Little information on current status of energy efficiency use

in different sectors. GIZ/WECS supported National Energy Efficiency Program has

prepared a baseline study of eight energy intensive sectors of industries which has 157 GWh total saving potential and 8 million GJ thermal energy, CO2 saving of 0.5 million metric ton.

Electricity demand and load forecast

2013-14

2014-15

2015-16

2016-17

2017-18

2018-19

2019-20

2020-21

2021-22

2022-23

2023-24

2024-25

2025-26

2026-27

2027-280.00

2,000.00

4,000.00

6,000.00

8,000.00

10,000.00

12,000.00

14,000.00

16,000.00

18,000.00

20,000.00

-

500.00

1,000.00

1,500.00

2,000.00

2,500.00

3,000.00

3,500.00

4,000.00

Fiscal Year 2013-2028

Ener

gy (G

Wh)

Peak

Loa

d(M

W)

Source: NEA, 2013

Load demand of 3679 MW & energy demand of 17,403 GWh by 2027/28 As per SREP report in 2011, the current investment in electricity generation expansion is adequate1203 MW under construction, about 1892 MW projects planned and proposed for construction, their start and completion dates not known

Energy sources and renewable potential

• Except for the import of fossil fuel product, the energy sources Nepal has are all renewable energy: biomass, hydro, solar

• SE4ALL goals from the report, Rapid Assessment and Gap analysis Report, 2013: All households will have access to electricity by 2030; most of this will be from

hydropower grid. Cooking with solid biomass will be completely replaced with improved cook

stoves (ICS) by 2030 Priority should be for energy efficiency improvement in the household sector. Decrease energy intensity from the recent 1.166 toe/USD 1000 GDP to0.421

toe/USD 1000 GDP by 2030. This will bring Nepal at par with countries in South Asia.

Analysis indicates that in order to meet the development needs of Nepal, the electricity contribution in the energy mix should have share of 11% in 2020, 26% in 2030 compared to over 2% in 2010.

SE4ALL Scenario ProjectionCapacity addition required 2020 2030

Hydropower plant capacity, MW 5600 14,000

Off grid pico, micro/mini hydro, MW 60 220

Solar PV plants 100 2100

Table: Share of renewable energy in the total final energy consumption

Particulars 2010 2020 2030

Share of RE 3% 11% 26%

Source: NPC/UNDP, 2013

Source: NPC/UNDP, 2013

Investment requirements for SE4ALL Goals, MUSD

Technology costs 2015 2020 2025 2030

Biogas 33 38.2 44 176

Off grid hydro (mini/micro) 15.6 33.4 68 -

Pico hydro 2 5 10.6 10.6

Grid connect hydro 4,752 6295.45 9088.6 12,119.4

Grid connect solar PV plant - 277.3 905.8 2967

Solar home system 79 169 361 813

Total supply investment 7815 10,915 16,773.5 25,650.7

Source: NPC/UNDP, 2013

Exchange rate 1 USD = 97.55 USD ( THT, 25 March 2014)

Way forward

• The above projections and investment estimate are only preliminary and detailed action plan for achievement of SE4ALL goals are yet to be formulated.

• Low carbon potential is huge from saving in wood fuel using efficient fuel stoves and biogas and electricity generation from hydropower and solar.