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3 energy sector mr sagar raj goutam

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Presentation by Mr. Sagar Raj Gautam, SDE of Ministry of Energy, Water Resources and Irrigation

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3 energy sector mr sagar raj goutam

  1. 1. ENERGY: GENERATING POWER FOR ECONOMIC TRANSFORMATION Sagar Raj Goutam Senior Divisional Engineer Ministry of Energy, Water Resources and Irrigation
  2. 2. BACKGROUND: ENERGY MIX (IN %) 65.7 22 6.7 12 5.2 13 16.2 20 6.2 33 Fuel Wood Biomass Coal Petroleum Products Electricity /Renewable 12.87 MTOE 16.93 MTOE1 Data Source : Economic Survey, Ministry of Finance; Energy Sector Vision 2050 AD, WECS 1 With GDP growth rate of 5.6% and certain policy intervention 20502016
  3. 3. BACKGROUND 520 412 92 53 5 off Grid Thermal Storage NEA _ P/ROR IPP _ P/ROR 55 742500 2600 5600 IPP (PPA Processing) IPP ( PPA Concluded) IPP (Under Construction) Public Sector Hydro Projects in development (MW) TOTALINSTALLEDCAPACITY:1082MW Current Electricity Mix (MW) Micro/Renewables
  4. 4. BACKGROUND: GENERATION REQUIRED (GW) [7.2 GDP Growth] 3.61 6.62 11.11 18.12 29.43 6.62 9.99 15.73 23.05 36.49 2020 2025 2030 2035 2040 Reference Policy Intervention Data Source : Electricity Demand Forecast, Jan 2017, Water and Energy Commission Secretariat
  5. 5. BACKGROUND: RIVER SYSTEM AND POTENTIAL Sapta Koshi: 10.86 GW Sapta Gandaki: 5.27 GW Karnali Mahakali: 25.1 GW Southern Rivers: 880 MW Techno Economical Potential : 42.11 GW
  6. 6. BACKGROUND: KEY ELECTRICITY FIGURES • Electricity Access: 87% (Grid: 69%; Off-grid: 18%) • Consumption: 200 kWh/capita • Installed Capacity: 1082 MW • Peak Demand : ~1,500 MW • System Loss: 19% • Electrical energy generation: 4,476 GWh • Electrical energy import: 2,582 GWh Data Source : Annual Report, August 2018, Nepal Electricity Authority; White Paper, May 2018, Ministry of Energy, Water Resources and Irrigation.
  7. 7. BACKGROUND: SECTORAL TARGETS Data Source : Annual Report, August 2018, Nepal Electricity Authority; White Paper, May 2018, Ministry of Energy, Water Resources and Irrigation.  Per capita electricity consumption:  700 kWhr (5 years)  1,500 kWhr (10 years)  Electricity Generation: • 3,000 MW (3 years) • 5,000 MW (5 years) • 15,000 MW (10 years): 10,000 MW for domestic consumption; 5000 MW for trade  System loss: Reduce to 15 % from 20.45 % (5 years)  Access to electricity: 100 % (5 years)
  8. 8. POLICY: GUIDING POLICIES Constitution of Nepal: Article 51 (g) (4) says, "To ensure reliable supply of energy in an affordable and easy manner, and make proper use of energy, for the fulfillment of the basic needs of citizens, by generating and developing renewable energy sources.” Hydropower development Policy, 2001: • To develop hydropower also as an exportable commodity. • Implementation of hydro projects based on Build, Operate, Own and Transfer (BOOT) model. • Risk Coverage Arrangements. • Electricity Act, 1992 • Electricity Regulation, 1993 • Environment Protection Act, 1995 • Environment Protection Regulation, 1996
  9. 9. POLICY: ELECTRICITY MARKET Internal: • Nepal Electricity Authority to buy generated electricity • Transmission System Development Plan, 2018 • Distribution Master Plan • Aggressive Transmission / Distribution Infrastructure reinforcement and expansion throughout the country External: • Nepal – India Agreement Electric Power Trade, Cross Border Transmission Interconnection and Grid Connectivity, 2014 • Nepal – Bangladesh MOU on Power Sector cooperation, 2018 • Nepal – China MOU on Energy Cooperation, 2018
  10. 10. POLICY: ELECTRICITY MARKET Internal: • Province wide Distribution Company • Take or Pay PPA • Generation Mix: • Storage 30-35% • Peaking 25-30% • ROR 30-35% • Alternate 5-10 % External: • SAARC Framework Agreement for Energy Cooperation (Electricity), 2014 • MOU for establishment of the BIMSTEC Grid Interconnection, 2018 • BBIN Forum
  11. 11. POLICY: FACILITIES • BOOT model for private investment • Sole or JV investment • Nominal Royalty to be paid to the Government • Guaranteed water rights • Lease arrangement for public land • FC exchange facility and repatriation • Dollar PPAs for the projects with installed capacity over 100 MW • Progressive PPA rates for PROR / Storage Projects • Fiscal Incentives: • VAT exemption and 1% custom duty on the import of construction equipment & spare parts • Exemption of 100% Income tax for first 10 years from COD and 50 % for next 5 years.
  12. 12. POLICY: RISK SHARING ARRANGEMENTS & CONCESSION AGREEMENT • Backstopping against Non Payment by the off taker • Sharing of hydrological risk and benefit • Use of International standards on environmental and social sustainability • Protection from change in law • Parallel Compensatory mechanisms in case of event of default • Project Handover mechanism • Transfer Price Determination
  13. 13. INVESTMENT OPPORTUNITIES: PUBLIC SECTOR PROJECTS • The Government through its agencies are conducting studies of several hydropower projects • Development of storage projects is a priority Some of the projects being showcased are as follows: • Nalsing Gad HEP: 410 MW • SR 6 HEP: 652 MW • Sunkosi II HEP: 1,110 MW • Sunkosi III HEP: 536 MW • Tamor HEP Project: 756 MW • West Seti and SR 6 Combined HEP: 1200 MW (750 MW and 450 MW) • West Seti HEP: 750 MW • Lower Arun HEP: 679 MW
  14. 14. INVESTMENT OPPORTUNITIES: PRIVATE SECTOR PROJECTS • Private Sector Sponsors have been studying /developing numerous projects under the Licensing framework • A range of projects at different level of development are available for prospective Investors. Private Sector Projects: Survey License: • 1-25 MW: 201 Projects with combined installed capacity of 2 GW • >25 – 100 MW: 51 Projects with combined installed capacity of 2.7 GW • > 100 MW: 27 Projects with combined installed capacity of 13.2 GW Generation License Application: 27 Projects: 1.5 GW Data Source : doed.gov.np [ Updated data as of March 24, 2019], Department of Electricity Development Generation License: 201 Projects : 7.7 GW
  15. 15. INITIATIVES • Institutional Arrangement • Formulation of overarching water resources policy and Act • Electricity Act • Hydropower development master plan • Electricity Regulatory Commission • PPP and Investment Act • Foreign Investment and Technology Transfer Act
  16. 16. To Conclude……. The potential to harness water resources for hydroelectricity; with the evolving electricity market – Domestic and Cross Border - AND positive reforms in our policy framework , have created investment friendly environment in the energy sector. We request you to consider the avenues for the investment that have been offered and Ministry is committed to extend all the necessary support and assistance.
  17. 17. Contact Agencies 1. Projects license, study guidelines and regulatory and legal information can be downloaded from http://doed.gov.np/ 2. It also has a list of licensed Projects (and their status) and a list of Government owned Projects. 3. Information about investment on large PPP Hydropower projects can be downloaded from http://ibn.gov.np
  18. 18. Thank You

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