Hydropower Projects in Nepal: Status, Issues and Solutions document summarizes Nepal's hydropower potential and development status. Nepal has over 83,000 MW of hydropower potential but has only developed 851 MW so far. Key issues facing hydropower development include difficult financing, lack of coordination between agencies, transmission infrastructure challenges, and managing community expectations. The government is working to address these issues through policies supporting private investment and measures to increase local community benefits and participation in projects.

1. Hydropower Projects in Nepal:
Status, Issues and Solutions
National Workshop on Small Hydro Power Projects-its Role, Issues and Prospects in the
Changing Energy and Environmental Landscapes
5th & 6th January 2017
Energy Management Centre,
Sreekaryam, Thiruvananthapuram, Kerala, India
Prof. Dr. Hari K. Shrestha (Nepal Engineering College)
Er. Komal Nath Atreya ( Nepal Electricity Authority)

2. Outline
• Country Background
• Energy Consumption Situation in Nepal
• Government Priority for Renewable Energy
• Hydropower Potential and Its Current Status
• Rural Electrification Model Adopted
• Opportunities for Renewable Energy in Nepal
• Economic Growth Activities- Photos
• R&D

3. Country Background
• Located between two giant neighbors (India and China),
with in area of 147,141 km2, and a theoretical HP potential
83 GW, Nepal opened power market for private investment
in 1990s. Current installed capacity: 851 MW (HP).
• An opportunity for HP investors.
3

4. Energy Consumption Status
• Per capita energy consumption: 16 GJ
• Per capita electricity consumption: 120 kWh (225 kWh
in Developing Countries)
• Access to electricity: 76%, (61% grid, 15% renewable)
• Electricity as % of total energy consumed: 3%, mainly
from Hydropower.
• Grid Power capacity: 904.4 MW (851 hydro+53.4 diesel)
• Generates 525MW in winter (peak demand: 1414MW)

5. Classification of Hydropower in Nepal
- Pico Hydro: < 10 kW
- Micro Hydro: 10 - 100 kW
- Mini Hydro: 100 kW - 1 MW
- Small Hydro: 1 - 10 MW
- Medium Hydro: 10 - 50 MW
- Large Hydro: > 50 MW
In comparison to India’s classification
- Pico Hydro: < 5 kW
- Micro Hydro: 5 - 100 kW
- Mini Hydro: 100 kW - 1 MW
- Small Hydro: 1 - 25 MW
- Medium Hydro: 25 - 100 MW
- Large Hydro: > 100 MW

6. Legal and Policy Environment
• Government has adopted the Hydropower
Development Policy of 2001 and encourages both local
as well as foreign investment, especially for the
development of SHP
Highlights of the Hydropower Development
Policy, Nepal 2001
• Development at an affordable price
• Uplift the living standard of the rural community
• Efforts to reduce the risk of investment
• To open market for sale of electricity both at
national and international level.
• Easy acess for foreigners to work in the country in
relation to the project implementation

7. Legal and Policy Environment
Government Agencies in the power sector
i. Ministry of Energy (MoE)
ii. Water and Energy Commission Secretariat (WECS) –
planning and policy research.
iii. Department of Electricity Development (DoED) –
licensing, facilitation, promotion, compliance monitoring
and project study (regulating body under Ministry of Energy).
iv. Nepal Electricity Authority (NEA) – public utility for
generation, transmission and distribution of electricity
(Government of Nepal undertaking company under Ministry of Energy).
v. Electricity Tariff Fixation Commission (ETFC) – tariff
setting

8. Legal and Policy Environment
Application Process for SHP
•Survey license.
 To study generation, transmission, distribution survey
To obtain survey license, desk study report should be
submitted.
•Operation lisence.
 Production License (for construction and operation of a
production facility).
 Transmission License (for construction and operation of
a transmission).
 Distribution License (for construction and operation of a
distribution facility).
For operation license, Feasibility Study Report along with Detailed
Financing Plan should be provided. Power Purchase Agreement between
the developer and potential energy purchaser should also be provided
• Electricity Act 1992: a legal basis for HP
development

9. Issues in SHP development in Nepal.
• Hydropower Financing
• Project financing is challenging
• Multiple agencies
• Lack of "one-stop shop" for hydropower
development
• NEA as a Single Buyer
• Single buyer
• "Affected" Communities
• Rising expectation among local residents
• Poor Road and Transmission Infrastructure
• High social overhead cost
– Risks: Hydrological Risks, Geological Risks, Unstable
political situation, Sediment problem

10. Addressing the Issues
• Affected parties as owners (10% share); 90:10
ratio for rural electrification
• Benefit sharing mechanism (downstream-
upstream)
• Better compensation mechanisms: open
negotiation for land acquisition
• Open public hearing during EIA
• Negotiated corporate social responsibility: road,
school, water supply, livelihood training, …
• Preference to local residents for long term
employment

11. Some evidences of Positive Impacts
• Back migration in Taplejung district
• Long queues of people to invest in
hydropower, mostly SHPs
• Load shedding free zones in remote areas
• Demonstrated increase in income generation
activities at SHP areas
• Better market access to local products
• Villagers welcoming SHP promoters: access to
market, health facilities during emergencies,
fire brigade, …

12. River Nos.: 6000
Hydropower potential: 83,000 MW
Technically feasible: 42,000 MW
Generation: 851MW (≈ 1%)
Water Resources in Nepal

13. Energy Service Provider (ESP) Model for Pico,
Micro and Mini HPPs

14. Special Purpose Vehicle (SPV) Model

15. Renewable Energy & Enhanced Livelihood: A Concept

16. Entrepreneurship Creation Model
Creation of
Enterprise
Social
Mobilization
for Enterprise
Development
Entrepreneur
/Managerial
Skills
Technical
Skill
Finance
Appropriate
Technology
Marketing
Business
Counseling

17. Key elements of Community Based
Micro Hydro Systems
 Organization Development
 Formation of Community Organizations(COs)and
Functional Groups(FGs)
 Capital Mobilization
 Saving and Credit at Local Level
 Skill Enhancement
 For income generating activities of communities
to pay for electricity charges and to support some
other financial needs

18. Key Elements of CBMHS contd…
 Technology Promotion
 Promotion of MH technology and electricity driven
productive end uses
 Environment Management
 Community Forestry
 Tree Plantation
 Bio Engineering activities
 Promoting sanitation and toilet construction
 Programmes during world environment day(awareness
creation)
 Empowerment of Women and Dalits
 Positive discrimination to ensure equity to all
disadvantaged group

19. End-Use Applications Nos. No. Employed
Rural Communication Centre 1 1
Computer Lab in School 2 2
Health Center with X-ray, ECM & Lab. 2 4
Dental Clinic 1 2
Fresh House 3 3
Metal Workshop 3 7
Rural Carpentry 4 4
Huller/Grinder 7 14
Digital Photo Studio 4 4
Electronic Repair Centre 4 4
Cable Operator - Television 2 4
Poultry 11 12
Herbal Soap Factory 1 9
Noodle Factory 1 6
FM Radio Station 1 12
Mushroom Drying & Packaging 1 2
Milk Chilling & Processing Unit 1 4
Telecommunication Repeater Tower 2 2
Total 51 97
Girindi Khola Micro Hydro: End-Use Applications

20. HEALTH AND
SANITATION
IMPROVEMENT
LABOR SAVING
AND
DRUDGERY
REDUCTION
SOCIAL, CAPITAL
BUILDING &
EMPOWERMENT
BETTER
EDUCATION AND
AWARENESS
EMPLOYMENT &
INCOME
INCREMENT
HRD &
CAPACITY
BUILDING
MAJOR
IMPACT
ENHANCED
LIVELIHOODS
FUEL WOOD, BIOMASS.
KEROSENE & DIESEL
CONSUMPTION
REDUCTION
LOCAL
RESOURCES (WATER,
FOREST, LAND AND
SKILL) OPTIMIZATION
Achievements and Impact

21. Project
Identification
DESIGN
•Detailed survey
•Design
•Cost Estimate
Settlement
Selection
•Secondary data
•Field survey
•Comparative
Analysis
•DDC
endorsement
Community
mobilization
Community
Organization
Female
male
Micro Hydro
Functional
Group
Financial
mobilization
Community
Energy
Fund
(CEF)
DEF ..50%
DDC/VDC..10%
Community.40%
MH
construction
Procurement
Ordering
Construction/
Installation
Commissioning
Operation &
Maintenance
Produces
•O&M Manuals
•Spare part management
•Account keeping
Consumer Services
•Administration
•Tariff Fixation/ collection
•Maintenance
Technical Support
•Training
•Maintenance Centre
feedback
Rural Electrification Implementation Modality
Productive Energy use
&
Income Generating Activities

22. Micro Hydro Project Cycle
4 months3 months
6 months
2 months 1 months
3 months
30% of total
subsidy
40% of total subsidy
on completion and
remaining 10% after
one year
20% of total
subsidy

23. Opportunities for Renewable Energy in Nepal
• 12-14(last year) hours of load shedding during
winter months
• More than 42000MW of untapped Hydro
Potential
• Government has taken ambitious target to
achieve 10,000 MW in Ten years, including 10%
from renewable (200MW of wind and solar by
2017)
• Open to 100% foreign direct investment
• Enhanced investment climate foreseen in near
future with recent promulgation of constitution

24. Powering Education: Computer Training Center in Baglung
8/1/2017 24

25. Powering Communication: A FM station in Kharbang
8/1/2017 25

26. Powering Health Services:
8/1/2017 26

27. Powering Agriculture: Lift irrigation
8/1/2017 27

28. Powering Livestock activities: A poultry farm in Sindhuli
8/1/2017 28

29. Value addition for local resources: Drinking Water, Ghandruk, Kaski
8/1/2017 29

30. SHP Potential Vs Its Current Status
SHP Potential (up to 10 MW)
• 2000 MW
Current Status
PMMHP(Pico Micro and Mini Hydro Plants)
Installed Nos. > 2500
Installed Capacity: 42 MW
Under Construction: 105 Nos. (4.5 MW)
SHP
Installed Nos.: 35
Installed Capacity: 156 MW
Under Construction: 223MW (45no)

31. Distribution of Hydro Power Stations and
Transmission Lines in Nepal

32. Micro Hydro Power(MHP) Plants in Rural Nepal

33. 2X4.25 MW, IPP developed Naugadgadh SHP in Far Western Region of Nepal

34. In country Technical Experience
• 22MW indigenously designed HEP in
operation for more than a decade
• Local Civil Contractors are able to construct
projects in the SHP range including tunneling
• Design and fabrication of 92kW Francis
turbine

35. Technical Experience contd…
• Manufacture of up to 5MVA, 33kV Class Power
Transformer
• Fabrication and erection of Spiral Casing, Draft
Tube for 2*35MW Plant on behalf of VOITH
• Fabrication and erection of 18mx12m radial
gates
• Fabrication of Penstock Pipes, Expansion
Joints Gates, Trash Racks etc for large hydro
power plants

36. Repair and Maintenance
Heat Treatment of repaired runners
20MW Cracked Pelton Bucket of
Bosachu HEP, Bhutan
NDT and Static Balancing

37. Repair and Maintenance
Repair of Francis Runner

38. R&D Work and Turbine Testing Laboratory
• 30m natural head.
• 150 m Closed Head and 0.5 m3/s
flow
• 300 m3 Lower Reservoir
• 100 m3 Upper Reservoir
• Two centrifugal pumps each 250
kW with VFD (Variable Frequency
Drive) for each pump.
• Prototype test up to 300 kW and
model test for larger turbines.

39. Computational analysis of Bifurcation
Computational analysis of Pelton turbine
CFD analysis Torque estimation
Computational analysis of RPT
FSI analysis of Francis runner
R&D Work and Turbine Testing Laboratory

40. Opportunities for SHP in Nepal
• 12-14 hours (last year) of load shedding during winter
months
• More than 42000 MW of untapped Hydro Potential
• Open to 100% foreign direct investment
• Enhanced investment climate foreseen in near future
with recent promulgation of constitution
• Government positive in facilitating SHP: from take and
pay to take of pay
• Rs. 5 Million/MW VAT exemption approved by cabinet
• Higher purchase rate for peak energy
• SHP can be made multipurpose with flood control, dry
season irrigation, drinking water… and contribute in
reducing carbon footprint

41. R&D on Energy Sectors

42. R&D Areas by Govt. Agencies
Research on Hydro power includes
• Digital ELC, Turbines, SCADA system, Energy and Internet
(Tele linking), Study on sediments impact on turbines
Research on Solar System,
• Dye synthesis solar PV, Solar PV Cleaning Mechanism, Solar
Mapping, Used Lead Acid Battery Management System
Research on Small Wind Energy
• Design on PM generator, wind blade for small and wind
mapping, Energy and Internet
Research on Biofuels
• Electricity from biofuels including waste cooking oil
Research on Mini grid system
•Study on Grid Impact Study, Smart inverter and net metering, pre-
paid meter
•Nepal Solar Calculator- Android and iOS

43. TESTING
• Testing of Renewable Energy Technologies (Solar
Panel, Batteries, Lamps, Inverter, Solar Thermal,
etc.) by “Renewable Energy Test Station” under
Nepal Academy of Science and Technology
(NAST).
• Non Destructive Test for Electro-mechanical
Components at Small Hydro laboratory, NAST
• Turbine Testing Lab at Kathmandu University
(KU).
• Electrical Resistivity Tomography (ERT) by NEA
• Transformer Testing (Hi-pot Test) at Institute of
Engineering (IOE).