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Evaluation and Solution of energy Crisis in Nepal

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Society of Nepalese Engineers in U.K. (SONEUK) Conference on Infrastructure Development in Nepal, London, 18th February 2017

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Evaluation and Solution of energy Crisis in Nepal

  1. 1. SONEUK Conference on Infrastructure Development in Nepal, London, 18th Feb 2017 Evaluation and Solution of Energy Crisis in Nepal Ramhari Poudyal, B.Eng,M.Sc.; MIET PhD candidate, Swansea University,UK
  2. 2.  The world is facing an enormous challenge to provide sufficient quantity of clean energy for its burgeoning population.  Energy is a fundamental asset for socio–economic development and poverty eradication of any country.  Over 1.2 billion people 20 % of the world population have no access to electricity  768 million people lack access to clean drinking water and 2.5 billion do not have adequate sanitation  2.8 billion people still cook with solid fuel like wood, agricultural residue, animal dung  1 billion people live more than 2 km from an all-weather road. Introduction
  3. 3.  Nepal has been suffering from the chaotic energy crisis for about a decade.  A normal life of citizens is being crippled with long hours of load shedding and never ending queues in front of the gas stations.  About 6.6 million people of Nepal have no electricity  However Nepal has huge potential for generating • 43,000 MW of hydro-electricity • 2,100 MW of solar power and • 3,000 MW of wind power Introduction
  4. 4.  Types of energy crisis : • Oil Crisis • Petroleum Crisis • Energy Shortage • Electricity Shortage Energy Crisis - Nepal Political Events Aging Infrastructure Attacks by Terrorists or Military Infrastructure damage from severe weather Over Consumption Industrial Actions Factors of Energy Crisis
  5. 5. Energy overview & Electricity Consumption 78% 12% 4% 3% 3% Energy Overview 2015 Biomass Petro -Product Coal Grid Electric Modern Renewable The electricity consumption in different sectors
  6. 6. Electricity Consumption Per Capita (MWh /Capita) in 2014 53.9 23 15.54 12.96 9.14 5.13 3.93 0.8 0.31 0.21 0.14 0 10 20 30 40 50 60 Total Energy Consumption Per Capita KWh/Year 2013
  7. 7. Total Electricity of Nepal S.No. Organisation Capacity 1 NEA 350MW 2 PPI 180MW 3 Imported from India 355MW Total 885MW Total Demand 1325MW Total Supply 885MW Total Deficit 440MW Total loss 25.78% (228MW) 13 Billion
  8. 8. Time overruns Hydropower and Transmission line projects in Nepal Project Time Overrun Kulekhani I 21 Months Marsyandi 7 Months Kali Gandaki – A 18 months Chilime 60 months Kulekhani III 54 months Raughat 72 months Upper Trisuli 38 months Upper Tamakoshi 12 months 220 KV Khimti – Dhalkebar More than 10 Years not yet completed 400 KV Dhalkebar – Muzzaffarpur 6 months Trisuli 3 A 26 months Chameliya 60 months Middle Marsyangdi 48 Months
  9. 9.  The main reason behind this time and cost overruns is mostly due to NEA’s centralised and prolonged procurement processes  ghost contractors leaving work to be executed by inexperienced and technically and financially weak local contractors.  low project readiness at project approval, weak project management capacity of NEA .  The total losses of NEA at present have reached NPR 27 billion despite the government written off NPR 27 billion in 2011.
  10. 10. Resource Value Units Rank Period Source Hydro Power 45,000 MW WECS Wind Potential 7,606 Area(Km2) Class 3 – 7 Wind at 50 m 36 1990 NREL Solar Potential 466,643,167 MW h/Year 89 2008 NREL Coal Reserves 1.10 Million Short Tons 77 2008 EIA Natural Gas Reserves 0 Cubic Meters(Cum) 152 2010 CIA World Fact Book Oil Reserves 0 Barrels (BBL) 151 2010 CIA World Fact Book Bio Gas reserves About 200,000 Plants of 10 Cu m size at excising livestock population Cu m APEC Fuel wood 7 metric Ton Metric Ton APEC Potential Energy source of Nepal
  11. 11. National GDP As usual reference scenario Sector wise Energy Demand As usual reference scenario
  12. 12. “To make an energy fix, We need an energy mix.” - BP Slogan Energy Matrix
  13. 13. “Sustainable Transport system a must to minimise air pollution in Kathmandu valley” – Dr. Carlos (WHO)  Kathmandu becoming mask town  Air pollution killing double of what tobacco kills in Kathmandu  Lung cancer is the No. 1 in Nepal.  Over 4 million people die prematurely from illness attributable to the household air pollution from cooking with solid fuels.”  According to Environment Performance Index, 2016, Nepal falls in the 149th place among 180 countries in terms of air quality.  The no. of deaths caused by air pollution indoor and outdoor is 30,000 a year. This is twice as much as the no. of deaths caused by tobacco Sustainable Transport System
  14. 14. Kathmandu Valley Pollution Index(PM2.5) on 2nd Feb, 2017
  15. 15.  A world Bank estimate of Nepal’s infrastructure gap pegs investment needs at between 8 – 12 % of national income  Nepal’s medium term ambition is to become a middle – income nation by 2030, while graduating out of the least developed country (LDC) status by 2022. Source: WDI 2012 Energy Investment of selected countries
  16. 16. Distributed Renewable energy in Developing Countries Technology Typical Characteristics Installed Costs or LCOE US$ / KW or US Cents /KWh Biogas digester Digester size: 6 – 8 m3 Unit cost: US$ 612/Unit (Asia); US$ 886/Unit (Africa) Biomass gasifier Size: 20 – 5,000 KW LCOE: 8 – 12 (Global) LCOE: 5 – 6 (China) Solar home system System size: 20 – 100 W LCOE: 160 – 200 (Global) LCOE: 4 (Bangladesh) Household wind turbine Turbine size: 0.1 – 3 KW (Off – grid, residential) 1. – 2.5 MW (Industrial, institutional) Capitol cost: 10,000 / KW (1 KW turbine) 5,000 / KW (5KW) 2,500 – 3,500 / KW (250 KW) LCOE: 15 – 35+ Hydropower: Off – grid /rural Plant size: 0.1 – 1,000 KW Plant / Storage type: Run – off – river, diurnal storage, hydrokinetic Capital costs: 1,175 – 6,000 LCOE: 5 – 40 Village – scale mini – grid System size: 10 – 1,000 KW LCOE 25 – 100
  17. 17. 0 200 400 600 800 1000 1200 1400 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24  The electric utility managed to post healthy growth in revenue, thanks to uninterrupted power supply to many parts of the country mainly due to effective demand side management and 18 percent rise(18.28 billion NRs) in electricity tariff in July last year. Load Profile of NEA
  18. 18. Electric power transmission and distribution losses (% of output) 15.11 28.84 37.5 26.75 30.05 21.34 20.89 21.62 21.8 21.08 19.31 21.11 19.73 22.41 21.85 20.99 19.49 28.34 30.26 34.44 31.55 31.48 0 5 10 15 20 25 30 35 40 1971 1973 1975 1977 1979 1981 1983 1985 1987 1989 1991 1993 1995 1997 1999 2001 2003 2005 2007 2009 2011 2013 Electric power transmission and distribution losses (% of Output) in Nepal 1971 - 2013
  19. 19. Comparison of Transmission line
  20. 20. Comparison of Transmission line
  21. 21. The costs of new electricity transmission infrastructure Case Study 75 KM Route Build (Capital) Lifetime Report per KM National Grid Per KM Report per KM National Grid per KM Overhead £ 1.6 m £ 1.6 m £ 4.0 m £ 4.8 m Underground £ 16.7 m £ 18.8 m £ 18.9 m 20.8m Cost Difference £ 15.1 m £ 17.2 m £ 14.9 m 16.0 m Case Study 15 KM Route £1.7 m £1.6 m £4.1 m £4.8 m Underground £ 17.4 m £ 18.0 m £ 19.3 m £ 19.2 m Cost Difference £ 15.7 m £ 16.4 m £ 15.2 m £ 14.4 m
  22. 22. (Investment Requirements 2011–2020 (total, in billions of dollars 2010) Source: Andres et al. (2013), World Bank
  23. 23. Access to infrastructure Services in South Asian Region Countries Source: World Development Indicators 2013
  24. 24. Solar and Wind maps of Nepal “our goal here is to fundamentally change the way the world uses energy. The goal is a complete transformation of the entire energy infrastructure of the world.” Elon Musk, CEO of Tesla & Chairman of Solar City, May 2015 Solar radiation 3.6 – 6.2 KWh/m2/day, 300 days sunny, Average sunshine day 6.8Hours/day  Wind projects are relatively quick to install, and takes much less space than large solar arrays. If there is road access, equipment and no political obstructions, a 100MW wind farm can be built within six months. Our primary concern would be road access to wind sites since bigger turbines mean cheaper cost of electricity generation.
  25. 25. Solar and Wind Price in $ Million/Megawatts 2010 - 2016 5.5 4.2 4.5 2.7 2.8 2 1.65 1.8 1.9 2 2.4 2.2 1.8 1.66 0 1 2 3 4 5 6 2010 2011 2012 2013 2014 2015 Q - 3 2016 Solar Wind Source: Bloomberg Energy Finance
  26. 26.  “Bangladesh is the world’s largest market for solar home systems, and other developing countries are seeing rapid expansion of small-scale renewable systems, including renewables-based mini-grids, to provide electricity for people living far from the grid.” – REN 21  IEA estimates that to achieve that Universal electrification objective by 2030, grid extension will be 30% and 70 % will be mini grids or off grid system. 0 500,000 1,000,000 1,500,000 2,000,000 2,500,000 3,000,000 3,500,000 4,000,000 Bangladesh India China Nepal Kenya Number of Solar Home Systems in top five Countries, End - 2014
  27. 27. Monthly Lifecycle costs of cooking in urban households Source: NOC 2013, NEA 2012 Economic Cost of cooking kerosene NRS1500 Economic Cost of cooking LPG NRS1375 1 INR = 1.60 NRS Monthly Lifecycle costs of cooking in urban households (Based on D’sa, A. and Narsimha Murthy, K.V. 2004) Year Kerosene LPG Electricity 1997 180 350 605 2000 270 410 680 2003 340 510 790 2012 1640 1030 940
  28. 28. Traditional bulb CFL LED Light Output Watt s EnergyBillsNRs/M onth(@5hr/day) Watts EnergyBillsNRs/ Month(@5hr/da y) Watts EnergyBillsN Rs/Month(@ 5hr/day) Lumens 40 Rs 45 8-12 Rs 11 4-5 Rs 5 450 60 Rs 68 13 - 18 Rs 18 6 – 8 Rs 8 300 - 900 100 Rs 113 23-30 Rs 30 16-20 Rs 20 1600 - 1800 150 Rs 169 30-55 Rs 48 25-28 Rs 30 2600- 2800 Source: [NEEP] Equivalent Wattages and Light output of Traditional, CFL and LED light
  29. 29. Energy Cost on product value in % for different industrial Sectors in Nepal  The UN Secretary – General’s initiative Sustainable Energy for all mobilizes global action to achieve universal access to modern energy services, double the global rate of improvement in energy efficiency, and double the share of renewable energy in energy in the global energy mix by 2030. 630 560 630 300 380 1020 470 0 200 400 600 800 1000 1200 Energy efficiency in Kgoe/US$ 1,000GDP (IEA,2012) Series 1 47.6 37.91 31.91 19.83 14.41 7.54 5.344.914.794.593.242.682.261.391.21 0 5 10 15 20 25 30 35 40 45 50 Energy Cost on product value in % for different industrial Sectors in Nepal
  30. 30. Source: Nepal Energy Efficiency Program
  31. 31. Sectors % for Electrica l % for Thermal The Electrica l Saving Potential The Thermal Saving Potential Beverag e 9.09% 19.25% 1390.804 MWh 10707.58 7 GJ Biscuit Sub Sector 29.47% 15.38% 1052.435 MWh 8702.705 GJ Dairy Sub Sector 6.31% 13.91% 504.602 MWh 12785.20 2GJ Instant Noodle Sub Sector 6.15% 11.38% 243.34M Wh 26786.58 2GJ Sugar Sub Sector 14.55% 20.73% 783.678 MWh 2095.16 GJ Vegetabl e Oil & Ghee Sub Sector 5.49% 11.07% 1200.312 MWh 78084.57 3GJ 0.065$/KWh 0.035$/KWh 0.032$/KWh 0.042$/KWh Residential Commercial Industrial Aggregate Avg. Average Costs of Energy Efficiency Programs by Sector(2012) Energy Saving Potential Sectors (ESPS) conducted by NEEP
  32. 32. Conclusion  Government of Nepal needs a new strategy to come out of the power crisis along with adding new power generation.  The major reason of current power crisis is the inefficient use of available resources.  Development and deployment of renewable energy resources; solar, wind, micro hydro, biomass etc.  Optimum and Efficient use of resources and conservation of energy  More researches on electrical power and potential renewable energy solutions must be applied to improve of life of Nepalese people.  NEA should take this power outage as an opportunity to brainstorm how to create innovative policies and encourage private sector investment.  Nepal needs significant investments into modern infrastructure to avoid the transmission and distribution losses.  In order to improve the industrial energy efficiency, the government can greatly influence and develop the relevant policy including collection of appropriate data.

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