Presentation made by Bhola Shrestha from Practical Action Nepal at the "Low Carbon Options in South Asia" workshop held in Nepal in August 2014.

1. Low Carbon Potential: Nepal
Case Study
Bhola Shrestha, Associate Consultant, PAC
Low Carbon South Asia Consultation
Workshop, 26-27 August, 2014
Hotel Soaltee, Kathmandu

2. 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.

3. 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

4. Energy situation and energy sources
77%
6%
4%
8%
2% 2%
1%
Firewood
Agriculture
residue
Animal dung
Petroleum
products
Coal
Grid electricity
Fig 2: Energy consumption by fuel type, WECS, 2010
 42,000 MW economic potential
hydropower
 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
Table 1: Trend, energy consumption by fuel type
Fuel Type % 2000/01 %, 2008/09
Traditional 87 87
Commercial 13 12
Renewable 0.36 0.68

5. Energy consumption by sector
89%
5%
1%
4%
1%
Residential
Transport
Industrial
Commercial
Agriculture
Fig 3: Energy consumption by sector
Fuelwood
87%
Agri
residue
4%
Animal
dung
6%
Modern
Energy
Sources
3%
Coal
58%
Agricultur
e residue
10%
Electricity
23%
Petroleum
products
4%
Fuel wood
5%
HS diesel
67%
LS diesel
0%
ATF
12%
LPG
1%
Gasoline
20%
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%

6. Energy use and access
7.1
75.4
22.6
14.2
20.9 18.4
28.1
35.6
51.9
76.6
90
80
70
60
50
40
30
20
10
0
Fig 7: Per capita total primary energy consumption, GJ (IEA 21010)
Per capita annual energy
consumption: 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 energy
poverty
 Global GHG contribution is
0.025%, one of the lowest.
Fourth most vulnerable
country affected by climate
change

7. Decentralized small scale RE
technologies
Technology
dissemination
Potential,
million
household
Outreach, million
household
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)
Source: AEPC/NRREP
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

8. 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.

9. Electricity demand and load forecast
4,000.00
3,500.00
3,000.00
2,500.00
2,000.00
1,500.00
1,000.00
500.00
-
20,000.00
18,000.00
16,000.00
14,000.00
12,000.00
10,000.00
8,000.00
6,000.00
4,000.00
2,000.00
0.00
Peak Load(MW)
Energy (GWh)
Fiscal Year 2013-2028
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 adequate
1203 MW under
construction, about 1892
MW projects planned and
proposed for construction,
their start and completion
dates not known

10. 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.

11. SE4ALL Scenario Projection
Capacity 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
Source: NPC/UNDP, 2013
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

12. 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)

13. 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.