Environment, Energy and technology

Unit:6Environment,Energy and Technology

Despite continuous endeavors by the Government and support by the Development Partners the energy supply in Nepal is still insufficient, and a significant obstacle for the social and economic development of the country. Nepal’s average annual per capita electricity consumption is about 161 kWh (CBS2013)– one of the lowest consumption in South Asia. The framework conditions and incentives for private investments in power plants are not adequate and a non-cost-covering tariff system discourages efficient electricity use. The import of petroleum products has exceeded total exports and thereby contributes significantly to Nepal’s trade balance deficit.

Compiled by Roshan pant (MBM-Nepal Commerce Campus)

Environment and energy management in Nepal

• Nepal’s economic and social development is being hampered by its inadequate energy supply. The country does not have its own reserves of gas, coal or oil. Although its most significant energy resource is water, less than one percent of the potential 83,000 megawatts of hydropower is currently harnessed.

• As climate change impacts increase, Nepal’s vulnerability continues to grow. About 80 per cent of Nepal’s population lives in rural areas, and improving the resilience of the villages is crucial.

• Access to energy in Nepal remains a critical barrier to long-term development. Today, 58 percent of Nepali households do have access to electricity.About 24 percent of Nepal’s total population still remained deprived of modern form of energy. Population without access to electricity in rural area is 30 times more than that of urban area.

• Energy from biomass constitutes an important part of the total energy supplies in Nepal. The manner in which biomass is currently utilized for energy is, however, far from ideal and is characterised by gross inefficiency and pollution of the environment.


• Firewood is the predominant energy carrier, counting for more than 70 percent of consumption. However, its use is inefficient and poses a threat to the country’s forests. At the same time, the indoor pollution caused by open hearths in homes presents a hazard to health. Mains electricity is generally only available in urban areas and some 30 percent of the population do not have access to it (CBS 2011).

• In Nepal, over 80 % of the total energy consumption comes from traditional energy resources. Biomass being the major contributing energy sector in Nepal, more than 75 % of the energy is supplied by firewood alone followed by 9.24 % from petroleum products, 5.74% from animal waste, 3.75% from agricultural residue, 3.53% from coal, 1.47% from electricity and 0.48% by renewable resources. The sectoral energy consumption pattern shows that the residential sector energy consumption is more than 80 % while the agriculture and others are the least energy consuming sectors.

• According to Water and Energy Commission Secretariat report of 1995 carried out for energy end use perspective, it was reported that residential cooking alone accounts for 65%, space heating accounts for 8%, agro-processing 3%, water boiling 2%, lighting for 1% while others account for over 20% of the total energy consumption in rural household sectors. Biomass has thus been very important source of energy in the Nepalese perspective. With the recent emphasis on renewable energy, there are various opportunities for economic development using these renewable resources.


Energy consumption

current scenario of sectoral en-ergy consumption which is dominated by Residentialsector as Nepal being developing country. The Resi-dential energy consumption is found to be around 80% followed by Industrial and Transport sector which contributed around 8% of total energy consumption. The commercial sector energy consumption is found to be 3.6% whereas agriculture and other energy combine con-sumption contributed to just over 1% of total energy consumption

Source:Economic Survey 2013/14 and 2014/15 (Ministry of Fi-nance),



• Other renewable energy sources abundantly available in the country are biomass and wind. The sustainable supply of fuel wood from reachable area of all land resources is around 12 million tons. Likewise total production of animal dung is about 15 million tons. Utilization of 10% of the total area of Nepal could commercially generate more than 3,000 MW of electricity with consideration of the installed capacity of 5MW per km2.

• However, we are not able to fully convert it into useful energy. Presently, around 12 % of population is electrified by alternative energy sources like micro hydro plant and solar home system. Around 900 thousand households are using clean energy solutions like improved cook stoves, biogas etc. for cooking. Although, the share of alternative energy sources is still small, it has increased by more than 50% since 2005.

• In the last decade dissemination of renewable energy in rural areas has been effectively promoted with assistance of the Development Partners. Decentralized electricity generation and biogas installations thereby improve rural living condition and contribute to a more sustainable use of biomass. Rising energy costs and prevailing energy scarcity increase attention to the efficient use of energy. Reasonable potentials for energy efficiency measures have been identified in industry and households as well as public infrastructure


• According to recent report of the Asian Development Bank (ADB), the demand for power in Nepal has increased steadily with an annual average growth rate of 8.5 % over the past decade, and is estimated to grow at least by 7.5% annually until 2020.

• However, the current energy generation trend shows that meeting this anticipated energy demand is likely impossible. It is reported that approximately 10% of the total energy demand in Nepal is met at present by imported petroleum products at a cost of over 40% of Nepalese total merchandise export.

• Despite great potential for hydropower development, power sector development has been constrained due to lack of visionary leadership, inefficient bureaucracy, insurgency, and most profoundly the corrupt mentality of the political stakeholders.

• Solar energy is another resource which has a great potential in Nepal. Nepal has over 300 sunny days in a year giving high potential of solar energy use. Generation of electricity using photovoltaic cells has become very popular in rural Nepal. The government has put heavy emphasis on subsidies for installation of solar home systems (SHSs). The problem of this system is that it is too expensive for those residing in isolated areas and even after the subsidy it is beyond the reach of low income group


• Recent developments on bio-ethanol production from ligno cellulose biomass have shown enormous potential for producing bio-ethanol from waste biomass products.

• Similarly, biodiesel can be produced from various plants and vegetable oils in Nepal. The most important source of feedstock for biodiesel production is Jatropha Carcus (Sajiwan) oil in Nepal.

• Thus, development of biofuels in Nepal not only helps achieve sustainable economic growth but also helps save the environment. There should be policy shift to consider biofuels as mainstream energy sources and petroleum fuels as alternatives.


Remarks• Energy is the key input for technological, social and economic development of a nation. The energy supply and demand characteristics

have a great role to play in order to attain sustainable development in the country. Thus, meeting Nepal’s current energy demand would help foster higher economic growth.

• Energy demand increases not only due to the increase in population but also due to the people’s access to new utilities in the market. As the rate of globalisation has a quick impact in technology development, the most affected sector due to growth and globalisation is the energy sector and Nepal can not be its exception.

• Despite endowed with huge natural resources, Nepal has not been able to tap its vast energy resources for the benefit of the country.• Development of commercial biofuels has a great potential in Nepal. This can reduce the dependency on import of petroleum products

from abroad. Even though biomass such as fuel wood, agricultural residue and animal wastes are the major contributing energy sources in Nepal, development of commercial liquid biofuels such as biodiesel and ethanol that can replace the import of diesel and gasoline respectively are largely ignored.

• The most important part of biofuels is that they do not produce greenhouse gases to contribute global warming. If the biofuel conversion process does not involve contamination of synthetic chemicals, the CO2 and other gases produced from biofuels are acceptable to plants. Emission of greenhouse gas particularly CO2 is of great concern today. Even though CO2 is considered as one of the major greenhouse gases, production of natural CO2 is essential for maintaining life on earth.

• The high potentiality of the renewable energy resources available in the country is the most appropriate option for Nepal. It also helps to reduce the dependency on the traditional biomass energy resources and fossil fuels and to manage the energy crisis of the nation. This ultimately helps to minimize the degradation of the environment.

• Development partners are very positive and supportive in promoting alternative energy in Nepal. implementing a five year National Rural and Renewable Energy Program (NRREP) which is a single framework program that allows government to collaborate with many development partners has ample potentialities. The recent power cut down elimination is a good news for Nepalese.

• What is required is the efficient use of energy and exploration of new source that can reduce the tremendeous demand of energy consumption and environmental degardation issues


Environment protection legislation and Programs

• Nepal government has laid emphasis on the conservation of environment through implementing various policies and programmes.

• During the 7th Five Year Plan, the policy of conservation of natural resources such as forest, agriculture and land was made, maintenance of the ecosystem, the policy of making minimum use of forest zone was adopted.

• Similarly, in the 8th Five Year Plan, control of landslides, soil erosion and flood; management of water shed, conservation of wild animals and hereditary species, maintenance of biological diversity of national parks.

• As stipulated by the Eighth plan, Environment Protection Council (EPC) has been formulated, the council is the highest level body to formulate policies and plans related to environmental conservation and protection and to coordinate environmental program in the country.

• Tenth Periodic Plan (2002-2007) includes genetic resources and biodiversity conservation programs in sustainable manner.

• Since 1990, Constitution has also given direction to the environmental policies and plans formulated in Nepal.

• In addition to the Ministry of Population and Environment, Nepal Govt has constituted the National Planning Commission (NPC), which must assess and approve all public environmental policies, programmes and projects before they take effect


• An umbrella act – the Environment Protection Act, 1997 – is in place and environmental regulations have since come into force. The Environment Protection Act makes impact assessment mandatory for major development projects

• Other institutions which are important to the environmental governance in Nepal include:

The Ministry of Agriculture The Ministry of Forest and Soil Conservation The Ministry of Industry The Parliamentary Committee on Natural Resources and Environmental

Protection Private and public product Testing Institutes • Similarly Nepal has various multilateral aggreements and international

conventions to comply with enviromnetal issues


Demand and supply of Energy • In a country that boasts enormous hydropower potential, hydroelectricity accounts for a

mere 2% of the total energy consumed. • This clearly suggests that there is a big gap between electricity that could be supplied,

and what is actually being supplied. • The hydropower development ratio for Nepal is only 2%(IEA 2014)• Energy demands are currently met primarily through traditional sources; such as

firewood or petroleum products. Energy substitution with electricity could therefore result in a substantial increase in demand.

• For a long period of time, Nepal has been dependent on other countries particularly for energy. This has had a negative impact on the economy every now and then.

• the demand for energy in Nepal will exceed 5000 MW in the coming years, as opposed to 2,000 MW by 2020

• An independent study jointly conducted by the National Planning Commission (NPC) and Investment Board Nepal (IBN) has made a forecast that per capita electricity consumption will reach 700 kilowatt hour per year (kWh/year) by 2030, which can be met through total installed capacity of 8,000 MW.


• National energy demand of Nepal is 11.6 million units. The energy system manages to support demand of 6.2 million units of energy which account to be 55 per cent of the demand.

• To forecast actual demand of energy there is no realistic demand projection either from the Ministry of Energy (MoE) or Nepal Electricity Authority (NEA).

• Since the present demand and supply of electricity in the country is based on shrinkage parameter, the electricity demand is forecast to increase by 3,200 MW in the next decade.

• As per NEA, the current energy deficit stands at 45 per cent. At present, the total 829 MW installed capacity includes 776 MW of hydro-electricity and 53 MW through thermal plants, which is connected to the National Grid System. But only around 300 MW is generated during the winter season against the demand of around 1,292 MW.

• The Ministry of Energy also had recently unveiled a plan to generate 10,000 MW electricity in the next 10 years and envisaged complete electrification in the country from the current 58 per cent.


• According to NEA projections, the electricity demand in the peak hour (evening) has reached 1350-1500 MW, while the demand in the morning stands at 1,080 MW and in the day time at 810 MW. Compared to this, the supply has dropped to 570 MW, including 243 MW electricity imported from India. The main reason for this mismatch has been the failure to repair hydropower projects that were damaged during the earthquake


Demand by sector and type


Why ? What are the reasons?• Supply lag over demand:Demand is inclined steeply specially in the few past years where

urbanization is rapid. Annual energy demand has crossed an average of 9.3% growth. Present demand exceeds over 808 MW where NEA toils to manage 326 at its best.

• Monopoly of NEA :The singly entity dealing with the power sector in all its three forms of development tag Nepal Electricity Authority (NEA) with the monopoly power to exercise in the energy market. Production, transmission and even distribution through national grid are the solo responsibility of NEA.

• Resource deficitPower production is heavily constrained by the availability of financial and human resource. A huge investment is deserved to carry out a project.

• Inadequate private investmentPartnership with the private sector is the best possible way to fill-out the resource constraint in the liberalized economy. Resource in the private sector needs to channelize in the productive sector of national interest. Although private sector accepts power production is a lucrative sector to invest yet only about 24% of the total installed capacity is carried by national and international private sector.


• Failure to meet development targetPolicy versus implementation debate is not a new discourse in development debate while reviewing any shortcoming. Same fate evoke out even in the power development sector in Nepal. Vision to develop set target of power production in different plan period has syndrome of far away from achievement in return.

• Seasonal variation supplyAll except one power plant are run-off-river water feeding production is directly proportional to precipitation level.

• Lack of timely maintenanceMost of installed plants run far below their installed potential. Frequent breakdown of sub-systems, low generation due to inefficient appliances and alternatively use of generators due to long maintenance duration are single or collective cause of the state.


What to do??• Develop integrated energy policy and establish independent

regulatory body for energy sector• Develop hydropower plants and Storage) to meet enhanced

demand• Disband monopolistic structure of NEA/NOC and bring

diversification in supply, and involve private sector in electricity distribution and downstream petroleum marketing

• Access to modern energy resources – electricity (renewable- both hydro and non-hydro)

• Efficiently utilize of available biomass resources• Substitute the present unsustainable use of Energy with modern,

renewable, indigenous energy sources


Environment and energy management issues in Nepal

• Institutional development: NEA as the single authority in production, transmission and distribution of energy criticized for being unable to conduct its function with satisfaction as expected. Definite specialized institution with dependent but segregated authority and responsibility is continuously demanded in order to rejuvenate the sector.

• Alternative sourcesEnergy in Nepal has been envisaged as hydropower due to its potentiality and coverage. Till date, alternative sources of energy are taken as for rural setting where national grid takes years to connect. Harvest of solar power help even the urban dwellers to meet their household demand.

• Public-private partnershipIt is the only way to generate resources to fill the resource gap prevailed in development sector in Nepal.

• Political commitmentPolitical commitment is the must for sustainable energy development consensus based policy on energy sector is needed among the brands to capitalize national potential.


• Micro-macro project debateThe scope of power plants is matter of national debate even among the policy makers. They clearly saw in two contrasting opinions. Some advocate on small hydro-plants for rural electrification and claims to be realistic, given the present resources constraints and feasibility.

• Integrated energy developmentBy term energy, it is understood hydropower in Nepal. It has dominance coverage in urban household and industrial utility and even the most versatile and eco-friendly nature is the backing factors. The potential alternative sources are not developed at satisfactory level yet manage their existence at rural settings. Integrated energy policy (IEP) is an issue in the situation such as envisaged in power sector now-a-days. The simultaneous development of all possible alternative sources of energy is required to meet the present demand and estimated development of the sources needs to be clearly marked beforehand to guide power development in Nepal.

• Infrastructure developmentAccess road and transmission line to connect national grid are essential pre-condition for any projects. It is blame that PPA of many projects is subjected to the availability of such infrastructures. License holders and private entrepreneurs are not in position to start their proposed projects due to lack of such infrastructure.

• National electricity Crisis Resolution Work plan, 2065Nepal Government has realized the intensity of the power cut problem and its effects. It has acknowledged the fact of failure of electricity system to carter its utility to household consumers and the industrial use. Analysts clearly blame the plan failed to realize the need of time demarcation and project identification to manage the problem and develop power plants. Transmission line and plant accessories maintenance, alternative source establishment, import from India, efficient CFL use, reduction in leakage are main issue forwarded by the plan.

• 10,000 MW in 10 years- Fact or Fantasy? It is a welcome policy of government to escalate power development in Nepal.but Even 10th development plan period ended up with just 39.5 MW out of set target of 315 with zero contribution of government directly. So it is challenging


IT policy 2067(2009)• The Information Technology Policy 2000 is being revised after nine years, with

the vision to bring Nepal on the global map and at par with international standards.

• The new revised policies emphasises on outsourcing as its principle base• The policies are based on three major grounds; outsourcing which is a five to

six year phenomenon and deals with areas connected to IT enabled services; business outsources, remote maintenance and other concerned e-services.

• The policy also emphasizes on the usage of IT for e-governance, and agencies that deal with health, education and businesses which can function with IT related strategic plans, and help increase the domestic consumption making practically all activities transparent.

• While the final base for policies deals with Intellectual Property rights, e-trade, e-commerce, VOIP, security and data protection, wireless networks, broadband data network and free and open source software

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Objectives of IT policy 2009

• To declare IT as the priority sector of government• To increase employment opportunities through the

establishent of knowlwdge-based industries• To make public information and communication

effective and inclusive in conformity with the principle of e-governace

• To increase the productive application of IT in social economic and business sectors

• To develop infrastructure to make the integrated data centre more effective


Electronic transaction act 2007• Government has promulgated Electronic Transaction Act-2063 and Regulations,

legalising all electronic transactions and digital signatures.• The new legislation has not only legalised all forms of electronic transactions and

digital signatures but has also clearly spelled out ways to regulate various computer-based activities and punish cyber crimes

• The new legislation has clearly set forth legal framework, administrative and application mechanism for electronic transaction and digital signature.

• Besides legal validity of electronic records and digital signature, the new Act has made a provision of Regulator and certification authority. The Act is divided into 12 sections and 80 clauses with detailed information on role and rights of regulator, certification authority, customer, government and all the concerned stakeholders.

• This legislation would be beneficial to bus-iness community. The use of better infrastructure like telephone, Internet connectivity, and electricity and so on can be useful for better yielding in business from the application of ICT tools


• It has also envisaged a separate judicial body -IT Tribunal and Appellate Tribunal, to look into all cases related to computer and cyber crimes. The 3-member tribunal will be headed by the district court judge or legal officer of equivalent status. The tribunal will be responsible for preliminary cases, while the appellate tribunal will look into major cases.

• The computer and cyber crimes such as hacking, piracy, copyright violation, fraudulent and all other deceitful activities have been clearly defined and punishments are set accordingly. The action against such crimes and punishment will be in the range of a minimum Rs 50,000 to a maximum Rs 3,00,000 in cash and six months to three years imprisonment.

• The electronic transaction and digital signature is valid not only for the private sector but also for the government agencies. It allows the government offices to use electronic medium for tender notice, vacancy announcement and others. It also validates public procurement and acceptance of electronic applications.


IT policies in Nepal and its relevancy to business in todays context

• Information Technology (IT) is changing almost all aspects of human activity like communication, trade, culture, education, entertainment, and knowledge.

• Today, information on anything is just a click away. The challenge hence is not simply to use and disseminate information but to create new business.

• Due to the new communication system and digital technology, a revolution is occurring in the way people transact business.

• E-commerce is nothing but such value added act of buying and selling of goods and services through electronic channels, especially by using the Internet. The scope of e-commerce today is such that, max. per cent of the total sales in the world is being electronically processed and Nepal cannot afford to sit back and watch this opportunity go by. However, development of e-commerce rests on the e-readiness.

• E-readiness refers to a country’s ability to take advantage of Internet as an engine of economic growth and human development. It also takes account of how prevalent e-business practices is in each country and assesses the extent to which a country is ready to automate its traditional business practices through the Internet.


• For e-commerce to contribute to the country’s economy, it must also comply international interests as it involves local and international monetary transactions via net.

• The threat of cyber crime is another immediate and imminent concern though quite a few cases in Nepal. The repercussion of this will be noticed while dealing with digital signatures involving cryptography for which we need to carry out homework before we jump into e-commerce.

• After many years efforts in Nepal, the government has crafted the Electronic Transaction and Digital Signature Act-Ordinance (ETDSA) 2061, the cyber law.

• Though the law has covered e-documentation, some Internet laws and policies covering the aspects of IPRs are still needed. It also has provisions for various computer crimes. However, it is quiet on electronic money transactions. It has also failed to include the online media. There is still the requirement for e-procurement laws.

• We are in an early stage of the legal development to tackle new IT crimes. The law should be properly implemented and awareness campaigns on advantages and disadvantages of the Internet should be launched. We should be optimistic for a better future of cyber law in Nepal.


Status of Technology in Nepalese Businesses

• Nepal, being relatively new to the world of technology, its history dates back to several decades ago, though the development of technology is accelerating, it still isn’t enough to catch up to other nations.

• IT in Banking(ATM,Mobile banking,online banking,store Management)• IT In call centre operation(emails,video-conferencing etc)• IT in marketing (facebook marketing,E-Busiess like kamyu.com)• IT in Communication industries(NTC,Ncell) Currently there are over 30 ISPs in Nepal and

about 6 telecom companies which shows a promising future for internet and mobile network connections.

• IT in gadget field:Smartphone, laptop and tablet users of Nepal have access to latest hardware and software to stay up to date and the number of authorized dealers are also increasing.

• IT in aatendence:Most of the offices throughout the nation have electronic attendance system.

• IT in sourcing:According to Computer Association of Nepal (CAN), there are over 6000 BPO (Business Process Outsourcing ) companies in Nepal whereas only 256 from among them are legally registered.

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Technology and human factors• Human Factors is a scientific discipline that applies systematic methods and

knowledge about people to evaluate and improve the interaction between individuals, technology and organisations.

• The aim is to create a working environment that to the largest extent possible contributes to achieve healthy, effective and safe operations.

• Computers have started to invade the Nepalese workplace ever since the early nineties promising to change the workplace irreversibly

• Several computers and internet connections are available in most industries but the impact on productivity and worklife is difficult to gauge.

• Very few workers as well as managers are aware of ICT caused health hazards and only a few are using mitigation measures.

• The human factor is integral to technology and environmental issues in the age of globalisation. If the role of human factors in technological innovations and environmental changes were better identified and its dynamic better understood, the benefits, risks and challenges of globalisation could also be grasped more comprehensively.


Why?• To equipment, systems, facilities, procedures, and job

training, for continual and effective human performance• To characterize the impact of environmental (external and

internal) and individual factors on human performance• To understand the Chain of Events that cause defects or

errors in daily business operations• These events can lead to the endangerment of the

employee and / or the customer of the product or service• To create awareness and to examine the human role in

the workplace


Technology and human factors goals


Issues related to management of Technology

• Cybersecurity: Developing new strategies against cybercrime remains an ongoing challenge for IT professionals.

• Technology acquisition: KSA should be taken care of • Social issues: May not have capable manpower or fear of losing employment

opportunity fear of resistance to change • Economic issues:Funds for initial investment and return on Investment are two key

issues to be considered the technology may be expensive• Cultural issues: Technology requires both top down and bottom up approach of

communication that may not be applicable in Nepalese oraganization where top-down approach is prevalent

• R and D:Due to limited resources, the research and development environment may also be not not so conducive.

• Government support:The case of South Korea and Singapore proved that the government role in supporting business environment and developing new technology is very significant