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hnzlQmJalashak

Vol. No. 13Year BS 2071 (2014 AD)

EditorialTime has to come for Micro Hydro to be a common terminology that is to call Micro Hydro as nations pride, recognizing Nepals expertise in micro hydropower technology, its application of policies and regulations developed and implemented have been successful in gaining excellence. This needs to have happened some time ago, as the stakeholders - the public sector, the private sector and communities are supporting each other. Such obstacles have been sidelined in the present scenario for last few years. Micro hydro development, as such, has been an inuential instrument.

As a matter of fact, the expertise achieved by Nepal in Micro Hydro by putting immense of efforts by techno-entrepreneurs and technocrats have been ranked greater in the South Asia region. It has gained wider reputation beyond the region as well. Shares of credit go to the brilliant public sector who brought in policies, procedures, regulations and funding supports and enthusiastic private sector who performed in all technical aspects efciently - survey and design, manufacturing of turbines, penstock pipes and hydro-mechanical parts, governing equipments etc. and supply, construction and installation and after sales service.

Fifty ve districts had seen stay alone electricity facility by micro hydro projects for the betterment of the people living in the remote and semi-remote settlements. Thus, micro hydro has been placed as a vital instrument when issues rise on electricity, rural energy, alternative energy, poverty alleviation, social justice in the country. Planners and economists appreciate the features of micro hydro in this respect.

Database reports say that some 3,000 micro hydropower plants have been established in the country so far with cumulative capacity to produce 32,000 kW of electricity to access 350,000 households have accessed to electricity for lighting at least. The gure expected jump to a greater scale by end mid-July, 2017, according to the plans the government nodal agency is exercising for. The private sector is extending whole hearted support to this mission.

Performance in micro hydro in Nepal was initiated half a century ago with the aim to ease out feeds for shes at a sh pond in Godawari Garden. However, electrication by water mills with technical improvement was one another landmark. Agro-processing facility in addition to electrication by improved water mill was also recognized as a step ahead.

Introduction of Peltric set, designed for electrication of a few household was proved an exclusive product of Nepal to be used by small volume of water from pretty much height and channelized through pipe to hit the Pelton runners and generate electricity by an attached generator was successful and much popular even today.

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Editor

Krishna Prasad Devkota

Advisor

Surendra Bhakta Mathema

Consulng Editor

Purna N. Ranjitkar

Markeng Management

Sarmila Rayamajhi (Khadka)

Distribuon

Padam Raj Joshi

Published by

Nepal Micro Hydropower Development AssociaonShahi Shukra Marg - 131, Teku, KMC - 12, Kathmandu, Nepal

Phone: 977 - 1 - 4230678, 977 - 1 - 4231024Email : nmhda@ntc.net.np, nmhdanmhda@gmail.com

website : microhydro.org.np

Printed at Creave Press, Kathmandu Phone : 977-1-4420053/54

Producing Pelton turbines and Crossow turbines for Micro Hydro for all situations have been a tradition of the country. On top of that Nepal has been providing turbines and other products along with technical services to other countries.

Nepal has hosted jamborees of Micro Hydro personnel in the past, a few in number but greater in terms of outcome. Non Aligned Countries Science & Technology Centre organized international workshop on Role of Micro Hydel for Developing Countries conducted by Nepal Academy of Science & Technology with support of Alternative Energy Promotion Centre, Regional Centre for Excellence in Micro Hydro and Nepal Micro Hydropower Development Association was a mentionable event. This event was highly successful in exposing of Nepals expertise the micro hydro world.

To recall, in this context, the international level micro hydro training programme conducted in 1993 in Nepal was an opening landmark. Likwise, a batch of Afghan engineers come to Nepal to learn on micro hydro later on some other occasion was also much talked in micro hydro sector.

Regional Centre of Execellence in Micro Hydro (RCEMH), established by USAID to work jointly with Alternative Energy Promotion Centre has take initiative to share knowledge and skill in Micro Hydro Nepal has gained by experience with the countries of the rgiona and even beyond is an appreciable step. The Iinternational event in Kathmandu in Novemebr this year will be a bright land mark in the scroe.

In context to Jalashakti, the Micro Hydro Magazine published by NMHDA for around two decades, this time in English has been focused at sharing Nepals information on Micro Hydro. This issue is expected to portray Nepal image abroad as well.

Wish all the best to all.

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Regional Centre of Excellence in Micro Hydro (RCEMH) established in Nepal with support of USAID as a joint effort with Alternative Energy Promotion Centre (AEPC) is readying an international gathering in collaboration with Nepal Micro Hydropower Development Association (NMHDA) put efforts to share Nepals knowledge and experience in micro hydro with the counterparts from various countries of South Asia region and

beyond. RCEMH and NMHDA, thus, organizing Exhibition cum International Workshop on Micro Hydro in Kathmandu, Nepal during 11th till 16th of November 2014. This is also an occasion for RCEMH to showcase its functionality and service offerings, and demonstrate achievement in development of micro hydro in Nepal. Likewise, NMHDA is elaborating knowledge, skill and experience accumulated by the private sector

Exhibition cum International Workshop on Micro Hydro

an event to exchange of idea and experience

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entrepreneurs who played the vital role in successful implementation of micro hydro in Nepal. The spirit of event is also added with elaboration on state role in successful implementation with effective intervention of various policies and regulations that AEPC practiced as the state agency responsible for development and promotion of alternative energy in Nepal.

Thus, the event is aimed at exposure to the latest developments in micro hydropower in Nepal, highlight the role of micro hydropower in poverty remediation and rural electrication in Nepal, discuss on the markets for micro hydropower, how can it be established and how can it lead to investments and associated economic activities in rural areas, know-how to promote development of the micro hydropower sector, on-site knowledge sharing, personal, one to one interaction with Micro Hydro experts, design consultants, manufacturers, installers, community representatives, trainers involved in the eld of micro hydropower and so on.

The organizers are set to mobilize experts who had provided their services abroad and have plenty of knowledge and skill will deliver the content and to lead the participants for the fruitfulness of the event. The one day exhibition at the Nepal Academy of Science & Technology (NAST) premises will feature Nepals workmanship in micro hydro in phase wise watermill, improved water mill, Peltric set and accessories, Crossow and Pelton turbines and accessories, innovated Crossow Turbine and Pelton Turbine, the Francis turbine made in Nepal, Electronic Load controller and Transformers. Elaboration research and application on mini grid and grid connection in Nepals context will also be featured. Likewise, various information regarding aims, activities and achievement achieved by efforts of public sector and private sectors in developing micro hydro in Nepal will also be part of exposition.

The site visit for inspecting the micro hydropower plant is one of the fascinating parts of Exhibition cum International Workshop on Micro Hydro. The site selected for the purpose in rich in technicality, end-uses and management. It throws idea on the best of uses of micro hydro plant and satisfaction

to all stakeholders the government, development partners, local community and even private sector. Malekhu Khola Micro Hydropower Project (26 kW), Mahadevsthan in Dhading district therefore has been selected as an ideal site to learn by seeing.

Exhibition cum International Workshop on Micro Hydro has been designed for MH developers, researchers, engineers, entrepreneurs, village and district community representatives and policy makers, with the relevant background and active involvement in the areas related to Micro Hydropower. A total of 25 participants are joining in the workshop training program. Out of the total, 20 participants will be from the region, whereas 5 participants will be from Nepal who will facilitate the international participants to understand the local context.

The programme offers a suite of services ranging across the full micro hydro value chain. It will present case studies; showcase emerging technologies, designs, and best practices for development, implementation and management of micro hydro systems; share techniques for maintaining quality and meeting performance standards; advises on methods for social and user committee mobilization; and serves the capacity building needs of the micro hydro sector.

The 6-day exhibition cum workshop will feature experienced micro hydro power developers and implementers, manufacturers and policymakers. Developers, researchers, engineers, entrepreneurs, village and district community representatives and policymakers who work in the micro hydro sector or wish to do so will benet from attending the workshop.

The experts and planners from Afghanistan, Bangladesh, Bhutan, India, Malaysia, Myanmar and Pakistan are participating in the event who will also cast the Micro hydro scenario in their countries and exchange knowledge and skills on Micro Hydro. Building cooperation for mutual benet among the participating countries will be another vital outcome of the Exhibition cum International Workshop on Micro Hydro.

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Bearing distinct character in Micro Hydro, Nepal has been attracting neighbours to tell a lot on this simple but signicant technology to provide electricity access to a lot of people who might not see electrical light and use any appliance at his own home. Micro hydro has been a tool for them availed by native techno-entrepreneurs with support of the government and development partners.

The seminar workshops and symposiums organized in Nepal and abroad also have been the platforms for Nepali experts to share knowledge and skills with counterparts. A few workshops and seminars organized in Nepal also had been highly successful in terms of knowledge sharing. International Workshop on Role of Micro Hydel for Developing Countries is one such successful event organized in Nepal in April, 2013.

The three day jamboree of 22 representatives from

17 countries (Afghanistan, Bhutan, India, Indonesia, Iraq, Malawi, Malaysia, Mauritius, Myanmar, Pakistan, South Africa, Sri Lanka, Uganda, Vietnam, Zambia and Zimbabwe) and around 25 experts, academicians and micro hydro professionals from Nepal took part in discussing on the methodologies, government initiatives and experiences of professionals. The participants agreed for the exchange of knowledge, skill and experience so as micro hydropower be more effective and accessible to the target groups.

Micro hydro, the technology for small sized hydropower projects of upto 100 kW, is not only to bring light into people live in the off grid locality but also give energy and water security to population, make people economically more stable, reduce the physical work load for women, enable the mechanization of rural industries and lessen environmental damages from cutting wood for

Role of Micro Hydel for Developing Countries

Exchange of Experience on Micro Hydro

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fuel and heat or harming aquatic fauna and ora. Moreover, no waste or by-products are produced unlike the energy generation based on fossil sources. Many countries have begun to embrace micro hydro technology as a viable and alternative source of energy, especially for remote and rural areas. There are different replicable success stories on micro hydro based projects in many developing countries. In order to explore wider prospects and share the best practices on micro hydro, the centre for Science and Technology of Non-Aligned and Other Developing Countries (NAM S&T Centre) and Nepal Academy of Science and Technology (NAST) in collaboration with Alternative energy Promotion Centre (AEPC) organized the international workshop.

As the event aimed at the overall objective to demonstrate micro hydro technology, its implementation and sharing the success stories to explore replication of successful models among the developing countries. The workshop provided a valuable platform for sharing of knowledge, transfer of technology and capacity building, coordination and networking among experts and professionals of the developing countries. The workshop was successful to deliberate on various aspects of micro hydro such as the potential and benets of micro and mini hydro; micro hydro turbines and their head range; site selection; micro hydro installation, commissioning and maintenance; integrated approaches with other forms of non-conventional sources of energy; ecological implications; energy-social-employment correlations; policy and planning issues, training etc.

The Centre for Science & Technology of the Non-Aligned and Other Developing Countries is an international organization with a membership of 46 countries spread over Asia, Africa, Middle East and Latin America. The centre was set up in 1989 in New Delhi (India) in pursuance of recommendations of various NAM Summit meetings for the promotion of South-South cooperation in science and technology is one of the organizers. Likewise, Nepal Academy of Science and Technology (NAST), established in 1982 with the main objective of the advancement of science and technology

for overall development of the country is also organizer of the workshop while Alternative Energy Promotion Centre, established by the Government of Nepal in 1996 as a focal agency for the promotion and development of renewable energy technologies in the country is active supporter of the event. AEPC, under the Ministry of Science & Technology and Environment, extend technical and nancial supports to community level for easier access to renewable energy, enhance technical capabilities to non-governmental organization and private sector involved in renewable energy sector for target people. It also channelizes the cooperation of donor countries, agencies and nancial institutions for the renewable energy for rural people.

The Regional Centre of Excellence in Micro Hydro (RCEMH), during the discussions, offered itself as a common platform for developing countries for standardization of micro and small hydropower system and its components, generating and sharing relevant database as well as knowledge, networking among the professionals, capacity building and carrying out collaborative research for enhancement of efciency, reduction of cost, expansion of technological domains, and identication of strategy for up-scaling, which was greatly appreciated by the participants.

Nepal Micro Hydropower Development Association (NMHDA) extended supports for the successful organization of the international event. WECAN (Water and Energy Consultants Association Nepal), Tribhuwan University - Centre for Energy Studies, Kathmandu University also took part to conduct the event.

A day-long eld visit to two micro hydropower plants was organized for foreign participants at Karamdanda Micro Hydropower Project (17 kW) located at BP Highway in Kavre and Chhange Khola Micro Hydropower Project (16 kW) at Dumja, Sindhuli. The participants also visited the Centre for Excellence in Production & Transportation of Electrical Energy (CEPTE/KU), Department of Civil & Geomatics Engineering, Kathmandu University, Dhulikhel where a mini-grid is currently in its prototype design stage.

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Micro-Hydro in Nepal A look back and ahead

By: Tilak Kandangwa and Rana Bahadur Thapa

Micro-Hydro sector in Nepal has come a long way since its inception during the 60s by Agricultural Development Bank. The sector did not ourish much during the period from 60s to 90s as this period saw fewer number of micro-hydro installations. However, during the middle of 90s, the sector picked up its pace with involvement of some serious donors and government commitment. Alternative Energy Promotion Centre (AEPC), a government autonomous body mandated to promote renewable energy in Nepal, also came into force during that time. As a result, fuelled by AEPCs leading role and donors resources, the country saw increased installation of micro-hydro systems. Thousands of rural households, who had never dreamed of electricity, were electried. This golden era of micro-hydro development started some 15 years ago and over the years this sector has enjoyed considerable success. Will this success continue? This is a question worth looking into.

Before looking into this question, lets look at the three scenarios envisioned during the rapid growth of micro-hydro installations.

Firstly, it was envisioned that the Government and donor commitment would increase over time. In the long run, the Government contribution would outpace that of donors. Secondly, the community-based model of micro-hydro promotion would provide a sound platform for sustainable operation of micro-hydro schemes. All electried

households would get subsidy from Government; own that particular micro-hydro scheme; would share resources for its construction; and generate tariff for its operation and maintenance. Lastly, it was pictured that the private sector would grow proportionately to the growth in micro-hydro demands. Private sector in micro-hydro includes turbine manufacturers, electrical and electronic equipment manufacturers, surveyors, designers and installers. Increase in volume of transaction would expand capacity of existing manufacturing companies and new companies will come up for designing, installing as well as manufacturing parts of micro-hydro schemes.

The rst envisioned scenario holds true even after 15 years. The government, at the moment, is facing increasing pressure to electrify rural households. Electrication through Grid extension is a costly affair. Furthermore, rural electrication cannot rely only on the generated power of future to be

Mr. Kandangwa and Mr. Thapa, article contributors

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constructed big hydro plants as these powers, most likely, would prefer going to the power hungry urban areas rather than the rural households. Micro-hydro will, therefore, continue to remain one of the alternative sources for electrifying rural households. Due to this, the Government contribution has increased. Donor commitment is growing as well. The international commitment on green house gas reduction and the big discourse of climate change would likely increase donor commitment in this sector for few more years to come.

The second pictured scenario did not keep its promise fully. Over the years, experience with community managed model shows that it is not effective over the full life cycle of micro-hydro scheme. This model is most effective during the construction phase of the project. During this phase getting electricity is one common incentive among the households that makes this model work. Every household wants electricity, so every household contribute to their best. However, once this incentive is achieved, the community does not have any further incentives derivable from the plant. As a result, The plant is owned by all, at the same time owned by none. The community ownership model, most often, does not seem to work during the operation phase, hence, posing a serious question of sustainability.

The third and the last scenario also have not been realized fully. There has been signicant growth in number of consulting companies and installers. However, the manufacturing sector did not grow as expected. It would not be unfair to say that the number of manufacturers remained practically constant in the last 15 years. Among many, some of the claimed reasons hindering growth are (a) There is not enough demand to sustain a manufacturing house (b) There is lack of upfront capital (c) Long-term security of investment is not guaranteed.

Now, we come back to our question: Will this success continue? Success will critically depend on how well the second and the third scenario will be addressed.

Many micro-hydro schemes that are under operation are underperforming; and in the core of the problem lay ownership issues. Ownership of all and at the same time ownership of none is a classic issue faced by public energy utilities all over the world. The same applies here as well. Since the future of new micro-hydro scheme directly depends on the successful continuation of old ones, this problem needs to be addressed as soon as possible. Alternative ownership/management models need to be explored for older schemes. For example Small business holders whose business directly depends on electricity would have the highest incentive in keeping the micro hydro plant under operation. Incentive of running business would naturally be more than incentive of lighting, especially in cases where alternative household lighting solutions like solar is available. Lease out models to such small business holders/group of business holders should be tried wherever applicable.

Manufacturing companies usually have some important business questions. The most important being the long-term security of their investment, at least for a horizon of 10 to 15 years. Many feel that micro-hydro demands are decreasing and that they may not be able to recoup their investment. In addition, for them, long-term availability of subsidy is also a big uncertainty. In order to allay fears of private sector, the sector needs to demonstrate that (a) there is signicant amount of demands for a practical period (b) there is guaranteed government and donor resources for a certain period (c) nancing tools/nancial instruments are available for the private sector in order to recoup their investments and prots on time. Proper planning in these concerns would greatly facilitate the private sectors in making informed decision on possible investments on manufacturing houses.

Therefore, the continuation of success of micro-hydro sector will depend on how well the sector can address and manage these scenarios in future.

(Views expressed here are not necessarily the views of

the organization they work with)

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Hydropower is one of the renewable energy sources. In Nepal, electricity generation is dominated by Hydropower. Experts estimate that this mountain dominated country has a potential of 83,000 MW to produce by various rivers owing from Himalayas to south and meet Bay of Bengal owing through Ganges plain in India. Out of the total potential 42,000 MW of electricity have been considered as commercially viable. Currently, Nepal has been able to produce 750 MW of electricity as hydropower and connected to INPS to feed the urban areas.

The national grid connection could not have been possible to stretch of transmission to the settlements at remote hills and mountains of the country as it is nancially and technically not feasible. As such, most of the rural people in Nepal are getting electricity through Renewable and Alternative Energy Technologies such as Pico hydro, Micro/Mini hydro, IWM and Solar PV systems etc.

Currently, 40 MW of electricity is generating by Pico hydro (up to 10 kW), Micro hydro (greater than 10 kW but up to 100 kW) and Mini hydro (greater than 100 kW but up to 1000 kW), and providing electricity facility to

350,000 rural households.

The Pharping Powerhouse was established in Nepal in 1911. This historical plant was installed with British support. This is standing as second hydropower plant in South Asia. Likewise, the rst Micro Hydropower Plant with 5 kW Propeller turbine was established in 1962 in Godawari Garden, Lalitpur.

Micro Hydropower in Nepal

MH Plants started to establish for agro-processing and electrication at off grid locations around

Micro Hydro in Nepal: At a glance

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mid-1980s. Agricultural Development Bank Ltd. had facilitated to channelize government fund as subsidy to establish MHPs in rural locations around the decade of 1985-1995. ITDG/N, USAID, UMN, ICIMOD, SDC and ACAP had extended support to promote MH in Nepal.

The private sector had put enough efforts in shaping excellence in micro hydro by carrying out all assignments related to development of micro hydro. They proved Nepals efciency in survey and design, manufacturing of turbines and other hydro-mechanical parts, installation and commissioning and providing services after sales.

Balaju Yantra Shala Pvt. Ltd., established in 1962, pioneered in turbine manufacturing in Nepal. Likewise, Nepal Yantra Shala Energy, and Thapa Engineering Industry followed in 1976 and 1981 respectively.

Mr. Akkal Man Nakarmi, late Mr. Shyam Raj Pradhan, Mr. Dewan Singh Thapa had contributed signicantly to technical development of MH. Mr. Krishna Bahadur Nakarmi also had contributed extensively in turbine designs. The fore mentioned had been successful in supplying turbines and other parts for MHPs to various countries. Thus, Balaju Yantra Shala Pvt. Ltd., Kathmandu Metal Industry Pvt. Ltd., Nepal Yantra Shala Energy, Thapa Engineering Industry Pvt. Ltd. have been mentioned as pioneering in MH in Nepal and even abroad.

Private entrepreneurship in survey and design, manufacturing and fabrication of turbine, penstock pipe and other parts and construction and installation grew up gradually. There were 9 such companies / rms come into action till end of 1992 at the time of establishment of NMHDA.

Alternative Energy Promotion Centre (AEPC), a government institution established on November 3, 1996 under the then Ministry of Science and Technology with the objective of developing and promoting renewable/alternative energy technologies in Nepal also has been successful in proving nancial supports as subsidy and technical supports and implement the regulation adopted by

the government for the promotion of alternative energy sources.

UNDP and The WB funded Rural Energy Development Program (REDP) was rst introduced to ve districts and successfully carried out in 55 districts. Later, continued with the name of Renewable Energy for Rural Livelihood (RERL) since January 2012.

Energy Sector Assistance Programme (ESAP) rst and second phase were successful to deliver alternative energy access to target groups. ESAP with ve years each phase was ended at mid July 2012. Danish and Norwegian governments extended supports to both phases of ESAP.

Alternative Energy Promotion Centre (AEPC) has activated National Rural and Renewable Energy Programme (NRREP) with effective from 16 July, 2012 with a single programme modality for development and promotion of alternative energy in the remote villages of Nepal. It has an extensive aims to generating 25 Mega Watt of electricity through pico, micro and mini hydropower plants during ve year period of NRREP. Solar, Bio-gas, Bio-mass and improved cooking stoves are also targeted for extensive growth.

Governments of Denmark and Norway, DFID (UK), kfW (Germany), GiZ (Germany), SNV/Netherlands, The WB, ADB, UNDP, UNCDF are supporting fund to GoN for NRREP.

Around 80 private companies/ rms are working for the development of MH in Nepal, according to PQ List of AEPC/NRREP (mid July 2014).

Poverty Alleviation Fund, Kadoori and DolIDAR also take initiatives in establishing MHPs for the benet of people living in remote hills and mountains.

The success in MH technology and bearing ability to share knowledge and skill to other countries, USAID has established Regional Centre for Excellence in Micro Hydro (RCEMH) in Nepal. The RCEMH is planning to create better access to the aspirants in the region and beyond.

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Background

In its 50 years journey of small water power generation system travelled from Ghatta - Water Mills-Multi Purpose Power Unit (MPPU) - Pico hydro - Micro hydro - Mini hydro - Mini grid - grid connected micro/mini hydro. During its course of development, different delivery modalities and nancial support models have been tried out. Judging from the perspective of deployment, the technology development modalities were by fairly successful. In period of thirty years, around 30 MW of electricity is produced from off-grid pico/micro/mini hydro projects implemented through government and non-government projects and programmes providing lights to more than one million rural people. But, the time has proved that this pace of development of off-grid electrication will not serve the people aspiration and meet the need of the electricity in the changed context of social and technological development.

Micro hydro development path actually travelled different ownership models: from mill owner developing mills (private entrepreneur led) to micro hydro user committees and micro hydro co-operative. The private sector ownership has virtually stopped from 2006 when RE policy 2006 scrapped subsidy to private developer. The private entrepreneur and community led models of construction and operation of micro hydro schemes have their own merits and demerits. In the recent context of socio/economic and demographic changes in the rural areas, it seems that there is shortage of volunteers to lead community micro

hydro development process which takes, even in its normal course, 2-3 years to complete it. The operation and maintenance of MH project for another 15 years of its useful life has separate story to tell. Therefore, the community led model1 has shown its serious limitations for future scaling up of micro hydro technology to provide services in rural Nepal. This has again made it mandatory to review the micro hydro development modality to t in the changed context. It seems imperative to vouch for some sort of new MHP implementation model where private entrepreneurs role cleared up and subsidy policy should not curtail the private sector led modal as well.

Issues in Existing Community Led Model

Longer implementation cycle

Following are the main areas where the micro hydro development cycle eats up time and resources,

Time taking from demand to approval process 1year

No time card, low quality of DFS, slow exchange of feedbacks comments among stakeholders etc

Bidding process and documents for nal approval 1 year.

No proper bidding process, interest group play, time for documentation, no time pressure felt by parties.

Financing arrangement and construction time : 1-2 years

Review of Micro Hydro Implementation Modality for Rural Electrication

By Madhusudhan Adhikari

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Big funds to be arranged by user committee, ination and time value of money not considered, poor construction supervision, seasonal nature of construction and poor project management skills.

Unreasonable time for testing commissioning and power output verication 1 year.

Companies taking it lightly, RSC not following up, AEPC waiting it to come, issues of low power output, ow seasonal issues etc.

Difculties to arrange nance timely

Micro hydro construction demand reasonably high upfront construction cost, the government has mode provision of investment subsidy through Alternative Energy Promotion Center (AEPC), but the subsidy covers only around 50% of the total cost of construction. It is very difcult for user committee to arrange remaining of the 50% and they have to move from door to door of the potential funding government and non-government agencies which takes long time and consume large part of the funds collected. This is the most time consuming issue if someone tries genuinely also. Moreover, now a day it has also started to become an opportunity to some of the user committee ofcials to collect funds from all possible sources and misuse it.

The table below shows indicative funding and time needed to collect it,

Source of Funds % in total project

cost

Time to get funds

GoN (AEPC) Subsidy 40-50% 2 year

Public funds (DDC, VDC, PAF, ING/Os etc.)

40-30% 2-3 years

Users contribution cash and kind

15-20% 1-2 years

Loan very few cases

2-3 years

Reasonably long time is needed to collect the required fund from difference sources, as they provide funds only when it is surplus from other activities and in the continuous effort/lobby from user committee. Moreover, due to ination, time value of money and loss due to time (wastage of cement, steel, or completed civil work swept out by landslide slide or rain etc) the nancial efciency

of the project is very low. Though the modality foresees that micro hydro developing communities should take loan from nancing institution but it has been not very easy, the nancing institution demand for the collateral which user committee cannot provide easily.

Unmatched High cost and poor quality of construction

The micro hydro installing companies argue that the time to complete construction, handover to user community and collect the full payment of a micro hydro project takes 3 - 4 years, the installation companies need to adjust tender prices at the time of bidding to cover ination, exchange risk and possible bad debt from communities. This is one primary reason for the high cost of micro hydro equipment in Nepal. According to them those new and inexperience companies who do not structure these risks in their initial bidding will suffer loss and may try to deliver lower quality equipment and services. This story is partly true but main part of the cost incurs in the lost time and in efcient project management skills of the installing company and the user committee. There is not clear cut responsibility between installing companies, regional service center (RSC) technicians and project developing user committee.

Possible New and Revised Implementation Modalities

Separating the construction works between user committee and Installation Company

In this model, it is envisaged that after conditional approval of detail feasibility study (DFS) from technical review committee (TRC), community from their cash and kind contribution and support from DDC and department of irrigation should take the responsibility complete civil works. When they come with the objective evidence of 75% completion of civil works then AEPC should give the nal approval of subsidy and start the selection of Installation Company. The whole responsibility of completing hydro

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mechanical work and electro-mechanical works like Penstock, PH equipment and all transmission work of the project should be given to Installation Company with xed time and budget system (fully covered from subsidy). The remaining of distribution of electricity produced will be done by villagers with help of DDC, VDCs, PAF. Here AEPC have to wait the user committee to complete civil works by putting their genuine effort within a specied time to get the subsidy otherwise the project should be dropped in the initial stage not have more problems later. This reduces the risks in the part of the installation companies but there could be only few communities which can come forward with commitment of civil works.

Giving Installation Company complete full construction the project

After approval of the micro hydro project from

TRC, the user committee (together with AEPC/DDEU/RSC) has rst to work to assure the funds required for the project from AEPC subsidy, users contribution, DDC, VDCs, PAF etc. before tendering the project. Once the funds for the project is secured then the nal approval is given and AEPC will select a installation company and give full responsibilities to construct the project in the xed time and cost basis to complete the construction and handover to the user community. For this model the existing subsidy policy of providing only 40-50% of total project cost in subsidy is not possible, this demand higher percentage of subsidy lets say around 75 to 80% ( which is actually in not strange as APEC from last three year is giving 70-80% subsidy (including additional) even in the inated cost).

The analysis of nancing mixed of the completed micro hydro projects shows that in the present nancing mechanism also the total

Villagers carrying turbine to project site

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public funds (subsidy, support of DDC, VDC, PAF, Sansadakosh, direct support from ministry of nance etc.) is around 80-85% of total project cost in most of cases. In this model, AEPC (RSC or DDU) will supervise the installing company together with user committee to ensure the quality of construction as per AEPC standard and to complete project within given budget and timeframe.

Private sector to take complete responsibilities to construct and run project

This could be a derivative of micro utility model, where AEPC subsidy is made available to private developer also. Then the interested private sector developer will carry out the project work in turnkey basis from survey, design, construction and operation and maintenance of project (project period 10-15 years). Detail contracting arrangement could be worked out to make binding to company to construct micro hydro

projects as per the AEPC technical guidelines and standard and run without major power stoppage for project life time. The community and private company will agree on a tariff structure and user committee will ensure that every member of the community will pay their tariff in time and will also support the developer to build and run project. The local government VDC or DDC will play the role of patron to protect the interest of the private company as well of the local user through a properly agreed contract between both parties. In the derivate of it, the government subsidy could be given as the difference between the levelised cost of electricity of the micro hydro plant (in kWh basis) and normal tariff of

Nepal electricity authority (NEA) which is paid by other electricity users in country. This model will be very cost efcient and timely because with private entrepreneur the decision making and nancing will be faster and may get loan easily from nancing institutions in the project nancing concept. However, attracting private sector investment demands liberal state policy in subsidy so that investor will get rational prot for the risk taken and the co-operation of user and local government in the construction and operation of the micro utility in the remote rural areas.

Conclusions

In the conclusion, it is evident that the exiting modality of micro hydro project implementation is lengthy, costly, resulting poor quality output and not nancial efcient, so there is no for improvement. The main challenges are to have quality of the preparation of the projects, faster arrangement of the nancing, good quality and timely construction. The need to build the capacity of local communities in the proper use of electricity produced and operation and maintenance management of micro hydro plant for long term economic benets of the rural and remote people.

The present modality demand big nancing burden is shouldered to community which is practically difcult to achieve. Similarly, there is lacking clearing up responsibility for the overall project management. Hence, there is a need to revise the existing implementation and introduce some new and efcient modalities for up-scaled implementation of micro hydro technology. Engagement of private sector entrepreneurs in the development and management electricity as micro energy utility may open wider spectrum of energy enterprising which will lower the responsibility of state to provide electricity to off grid areas and denitely will gain cost efciency as well. For all this government should make enabling environment for rural electrication through micro hydro and user should be committed to pay for the modern services.

Written by

Mr. MADHUSUDHAN ADHIKARI (MPhil, MBA , BE )

National Advisor, Community Electrication Component, National Rural and Renewable

Energy Programme, Alternative Energy Promotion Center

Renewable Energy Expert having total of 22 years experiences managing programmes and projects in various renewable energy technologies in private, INGO, and government agencies.

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Micro hydropower technology for mechanical power and electrical power generation is a technology that has matured substantially over the past 50 years. Many governments in South Asia, South East Asia and Africa and many other regions in the world have begun to embrace the technology as a viable energy option, especially for remote and rural areas, within a larger renewable energy portfolio driven strategy. In Nepal, Alternative Energy Promotion Centre (AEPC) established in 1996 as a central nodal agency to promote and disseminate alternative energy, is a body of experience built up around conceptualization till nancing and implementing more than 1,000 micro-hydro installations so far.

With a view of supporting disseminate extensive knowledge and experience built up locally in the eld of Micro Hydro Power, at regional and international level, USAID/Nepal, Ministry of Finance/Government of Nepal and Alternative Energy Promotion Centre under Ministry of Science, Technology and Environment Signed/concurred in signing Implementation letter for the establishment of Regional Centre of Excellence in Micro Hydro (RCEMH) in Nepal. The implementation letter was signed during mid

of April 2013 with major support for a period of two years coming from USAID. Government of Nepals contribution through AEPC will not be less than one-third of the total actual costs of the AEPC reimbursed by USAID. The main objective of the RCEMH is to make available Nepals 30+ years of experience in Micro Hydro development regionally and globally. More specically, following are the objectives of RCEMH:

To ll the knowledge and experience gaps amongst policy makers that are embarking on a

new generation of renewable energy frameworks, of end-user communities, and of developers and investors interested in pursuing off-grid hydro projects.

Be a knowledge centre for the micro hydro sector in the South Asia by establishing a Regional Centre of Excellence in Small Hydropower in Nepal.

Be a self sustaining centre for promoting micro hydro development that will catalyze high growth of micro hydro by addressing all-round capacity building needs for the sector.

Given that securing livelihoods is a major theme in rural development, and the central role of hydro power generation, it is proposed that RCEMH with a

Regional Centre of Excellence in Micro Hydro (RCEMH) - Nepal: An Introduction

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mission of improving information dissemination on micro hydro, promoting quality and efcient product application, supporting clean energy establishment, catalyzing high growth of micro hydro through advisory and human resource capacity building and improving the economy of the local region be established within AEPC. The Centre would provide demonstration and success case studies of efcient small hydro power technologies, designs, and practices, product testing for maintaining quality and performance standards, technical assistance to manufacturers to build quality products and encourage local entrepreneurs to develop the local economy and raise living standards of disadvantaged populations and advising policy makers.

In order to be self sustainable centre within reasonable timeframe, which is one of the specic objectives of RCEMH the key focus of the Centre will be to sell service offerings to clients, which are broadly classied as:

Knowledge management Training Project monitoring Technical assistance.

Under these broad themes, the Centre will offer a range of services. These would include, for example, human resources training, conducting research, establishing product manufacturing standards, facilitating small hydro power technology information sourcing, promoting quality and efcient turbine applications, promoting the manufacture of quality small hydro power plants and system designs, providing opportunities for appliance producers, suppliers and researchers to promote new technologies in efcient small hydro power plant manufacturing, catalyzing policy changes with respect to the application of efcient technologies in small hydro power plants, and encouraging new investments in efcient quality products manufacturing and research.

RCEMH will concentrate on securing a core set

of clients that will represent a base set of business revenues. These clients could be domestic as well as regional and international companies or organizations that are pursuing micro hydro projects or designing the policy and institutional arrangements for the sector.

The Centre will develop its business through client visits, focused market outreach, and thought leadership on key topics (e.g., micro hydro) and building out area social infrastructure, workshops

and conferences and information dissemination. Direct client presentations, written proposals and referrals will be the main tool the RCEMH which will be used to achieve its business plan goals.

RCEMH has recently provided Training of Trainers (ToT) to 20 highly skilled MH professionals in the recent past who are now ready to take up training assignments on various aspects of Micro Hydro Development locally and regionally. RCEMH is contemplating supporting establishment of one dedicated demonstration Micro Hydro Plant nearby Kathmandu, where all the available technologies will be demonstrated while operating, which will double as training centre for providing training in every aspects of MH development. A number of guidelines, standards and manuals to cater to the region are under development and dedicated marketing visits to few of South Asian (e.g. Afghanistan) and South East Asian countries (e.g. Myanmar) are planned to be completed in this scal year (2014/15).

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The success stories of Micro Hydro in Nepal have been told in places and occasions frequently. The Government, The private sector and the community are appreciated in such contexts. Keeping in view their involvements and enthusiasm none of them should be called great, but greater, as a matter of fact.

Private sector, one of them bears different characteristics, off course. These entrepreneur communities have to live with a lot of challenges - such as unsecured investment, non-cooperative staffs, changing policies and regulations and users unsound background. However, they take the challenge at the cost of satisfaction of their social responsibility, just besides earning of livelihood by business ventures.

The private sector techno-entrepreneurs undertake all assignments related to establishment of Micro Hydro - survey and design of the projects, manufacturing of suitable turbines, penstock pipes, poles a hydro-mechanical parts, supply, delivery, installation and commissioning and after sales services by one single individual company or rm. However, the classication of jobs has been exercised in the later phase. Thus, a company or rm dedicated to micro hydro development may perform assignment of all jobs as said above or part of the jobs, as opt for specialization on a single or selected segment.

Despite of the problems and hurdles, they have been successful to serve the country for half a century by some, for a quarter of a century by around a dozen and around one and half dozen

by twenty more and only a few are recently entered ones. Balaju Yantra Shala Pvt. Ltd., Kathmandu Metal Industries Pvt. Ltd., Nepal Yantra Shala Energy, Nepal Hydro & Electric Pvt. Ltd. Nepal Machine and Steel Structure and Thapa Engineering Industries who were the pioneers in the eld are leading the sector for 50 to 25 years.

Besides the data in the table below, AEPC/NRREP mentioned that pico and micro hydro plants established in between mid-July 2012 to mid-July 2014 generate 6.2 MW of electricity. NRREP will be operational till mid July 2017. It has a set target to establish pico hydro, micro hydro and mini hydro plants to generate in total of 25 MW of electricity in its ve year tenure. Thus, the private sector sees sizable opportunities to show and prove strength to further development of pico hydro, micro hydro and mini hydro projects. The upcoming projects of other institution like Kadoorie, Poverty Alleviation Fund, Dolidar and others will be in addition.

AEPC/NRREP has conducted prequalication of private sector companies and rms for various MH assignments. For survey and design 61 companies and rms have been prequalied. Likewise, 78 companies and rms for installation of MH projects are prequalied - categorically, 11 for pico hydro (up to 10 kW), 14 for up to 50 kW and 53 for 100 kW. Similarly, prequalication of manufacturing companies or rms is under progress. The PQ for manufacturers is set to classify as manufacturer of

Private sector eorts in ourishing MH in Nepal

AEPC Other institutions Total

Category Quantity Capacity Quantity Capacity Quantity Capacity

Pico Hydro 862 2.339 MW 772 1.364 1643 3.703

Micro Hydro 815 17.786 472 6.819 1287 24.605

Mini Hydro 1 0.4 41 15.940 42 16.340

Total 1678 20525 1285 24.123 2963 44.64

(Source: AEPC/RET Baseline 2012)

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turbines, manufacturer of penstock pipes, poles and other hydro mechanical parts, and manufacturer of Electronic Load Controller.

The private sector has been expanded to some 80 company or rms in the country (excluding those who specialized in survey and design jobs). The private sector, as such, has accumulated strength to delivers supplies and services for establishing micro hydropower plants to generate electricity of 8,000 kW or more per year, taking as one company or rm perform for 100 kW in an average. Besides that the sector has a pool of around 500 technical and 500 non-technical staff altogether. Most of them are experienced in their profession.

The private sector companies and rms are working at the limit of 100 kW capacity projects till now, but a segment of the private sector entrepreneurs claim that they are looking for their real capacity to show performing for 1000 kW or below projects. On the basis of long time experience, specially turbines and accessories manufacturers, say that they are in the position to manufacture bigger than 100 kW size turbines. The Government and other institutions linked to micro hydro if extend technical and nancial support for new and better instruments their capacity will grow rather. Some of such private companies or rms are looking for opportunities to manufacture Francis turbines to suite the possible demand in Nepals bigger than micro hydropower projects that is to come into market in future. Regarding manufacturing of Francis turbines, some

Micro Francis Turbines were fabricated in the past but they did not yield expected results. Later, one 92 kW Francis turbine which is a reduced size of 4 MW design was made in Nepal and waiting for testing at Kathmandu University Turbine Testing Lab. The hydrolic prole of runners of the 92 kW Francis Turbine was developed at KU TTL with application of CFD. As such, the future of Francis Turbine fabricating in Nepal has been considered coming soon in action.

Nepals private has been successful in supplying turbines and other parts to foreign countries also. They even provide service of installation and commissioning of the plant. Likewise, they are seen sometime doing transfer of technology to foreign technical personnel in Nepal or at their own countries.

Given below are some earlier steps in micro hydro in Nepal which resulted favourable situation in the present days and expected better for the days to come.

First Installation of MHP was done at Godavari in 1962 (5 kW) by BYS

Fifth 5 years plan (1975/76-79/80)- Small hydro Power mentioned for the rst time

Sixth 5 years plan (1980/81-84/85)- ADB/N Lunched Rural Electrication Project

The Government waived the Licensing Requirement for MHP- 1984

Wrien by :Purna N. RanjitkarConsulng Editor,

Francis Turbine ( 92 kW ) at Kathmandu University

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Eighth 5 years plan (1992/93-96/97) - Target Fixing Started

Ninth 5 years plan (1996/97-2001/02)- MHP Targeted 5 MW

REDP Initiated in 1996 AEPC Established in 1996 ESAP Initiated in 1999 NEA Announced the Policy of purchasing

electricity from Independent Power Procedure

The development phases

1960 : KMI developed Improved Grinding Mill 1962 : BYS manufactured and installed 5 kW

Propeller Turbine

1974 : BYS manufactured Crossow Turbine and installed

1975 : BTI manufactured Pelton Turbine 1979 : BYS manufactured Crossow Turbine for

rural electrication

1989 : KMI produced Multiple Purpose Power Unit

1982 : BYS manufactured Crossow T3 Turbine 1983 : 1. Development and installation of rst

split-ow turbine by BYS

2. First Corss-ow turbine installed by KMI

3. First stand alone electrication unit produced by BEW

4. First add-0n generator installed by DCS

5. Development and construction of propeller turbine in a scroll case by KMI

6. Development and construction of a mini poncelet water wheel by AEW

1984 : BYS manufactured Crossow T7 Turbine 1985 Electric motor converted to induction

generator by KMI

1986 : Redesign of MPPU by NSECO 1987 : Cross-ow turbine with double inlet-

valves produced by TEW

1988 : Pelton wheel on a 1 kW induction generator tested by DCS

1989 50 kW stand-alone electrication plant installed by DCS

1990 : 1. KMI introduced Peltric set2. BYS manufactured Crossow T12

Turbine

3. 50 kW electrication with Pelton wheel installed by KMI/NPP

1992 : 1. 100 kW stand-alone rural electrication project initiated by DCS

2. Design, manufacture and commissioning of 250 kW turbine by NHE

3. High tension lattice transmission line towers tested and developed by NHE

2003 : NYSE manufactured Crossow T15 Turbine. BYS introduced T15 simultanously.

Water Energy Consultants Association Nepal (WECAN), established in 2009, is one of the major private sector forces in the country to develop Micro Hydro in Nepal. This is an umbrella organization of surveyors and designers. Members of this association are contributing in survey and design of micro hydropower projects and even larger hydropower projects.

The main objectives WECAN are:

Supporting Consultants values, rights and maintaining professionalism.

Coordinating at national and international level for carrying out seminars, workshops, trainings and consulting services.

Creating awareness about the importance of water and energy by media.

Creating WECAN fund internally involving consulting rms and individual consultants so that it can support for strengthening the technical capability of water and energy sector within the country

Creating a common platform for all water and energy consultants working within and abroad country so that it could even support for long term economic development of the country.

The surveyors and designers of the private sector dedicated to promotion and development of micro hydro development in Nepal has played important roles. For vital participation such players, AEPC/NRREP has prequalied 61 such survey and design of micro hydropower projects.

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BYS manufactured 70 kW Crossow Turbine in Chjenbedji, Butan

Turbine made by Nepal Yantra Shala Energy installed in Laos

Some Turbines exporteted from Nepal

BYS Turbine installed at Sarawak Plant, Malaysia.

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There are thousands of isolated mini and MHPs and hundreds of thousands solar home systems (SHS) promoted by Alternative Energy Promotion Centre (AEPC) of Ministry of Science, Technology and Environment providing electricity to rural population of the country. AEPCs agship programmes; Rural Energy Development Programme (REDP)/ Renewable Energy for Rural Livelihood (RERL) Programme and Energy Sector Assistance Programme (ESAP) helped in development of the MHP sector and are a good example for other similar mountainous countries to learn from. There are around 3,000 micro-hydro electrication schemes with a total installed capacity of about 28,000 kW in the hills and mountains of Nepal providing electricity access to hundreds of thousands of households.

Why Mini Grid ?

MHPs installed in the isolated areas in the rural parts of the country are mainly serving the lighting needs of the people. The average plant factor is around 20% or near. On the other hand, the average installed capacity of MHP in Nepal is around 20 kW which does not allow simultaneous operation of multiple end uses to increase the plant utilization factor. In addition, the demands for power is increasing rapidly in rural areas too as the living standards are improving and many MHPs are struggling to meet the peak demand. In this contradictory scenario where some plants are not using their capacity and others are overloaded,

providing reliable and quality electricity is a huge challenge for community managed micro utilities scattered all over the country. If MHPs have interconnected facilities for transferring spill power from one area to the other, more productive uses can be operated and consequently increase the overall plant utilization factor. Though MHP has benetted the rural population tremendously by providing better lighting and opportunity for operating micro enterprises, there are limitations to scale up due to low power output (

22 Jalashak

purchased and shut down. If appropriate policy and related rules and regulations for interconnection of MHPs with the NEA grid is not formulated and implemented, more MHPs are likely to be abandoned resulting in waste of national resources and efforts, AEPC/REDP/RERL brought up this issue with NEA time and again and was usually told that it would not be feasible to connect MHPs with the national grid both from nancial and technical perspective. The main issues raised by NEA area;

Most of the generators used in MHPs are induction types which draws the reactive power from grid,

Connection of small MHP creates technical and managerial hassles to the grid and NEA and it will aggravate the safety issues during repair and maintenance.

AEPC and UNDP initiated establishment of a Mini Grid connecting a number of MHPs in Urja Upatyaka of Baglung district to address the technical and management related issues raised by NEA. If the MHPs of below 100 kW capacities

could be interconnected forming a Mini Grid and the Mini Grid could be interconnected with the nation grid, sustainability of these small plants could be ensured and rural population could generate more revenue that could be spent for their development.

Besides the economic benet, people would get quality electricity as the MHPs have to meet the voltage and frequency standards of the national grid. In addition, maximum utilization of installed MHP has direct positive inuence in reduction of greenhouse gases.

NEA would also get benet from interconnecting

MHPs as it need not buy the plants which would be managed by the beneciaries themselves, just a Power Purchase Agreement (PPA) to buy electricity would sufce. In addition, connection of power generating sources at the end point of weak grid will help improve the voltage prole in the system. MHPs interconnected local grid (Mini Grid) is an innovative and cost effective solution to deliver the reliable electricity supplies to the beneciary. It is One step forward in the development of micro

Topographic map of six MHPs (circle) forming the Mini Grid, rectangle represents the distribution transformer of national grid.

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hydro in Nepal. Mini Grid, conceptualized by AEPC/REDP, is a local grid that connects two or more isolated MHPs to operate in parallel mode and share the load in the system in same proportion with respect to their capacities. Mini Grid would have various benets including sustainable supply of electricity, some of which are discussed below.

Optimization of Electricity Generation:

o Balancing the surplus electricity of one or more MHPs with the decit of another one or more MHPs

o Opportunity to establish bigger sized industries (mechanical workshops with welding machines and lathe machines, stone crushing machines, etc) requiring more electricity (more than 50 kW) than generated by an average MHP of 20 to 30 kW

o Operating all plants at their full generation capacity round the clock without dumping spill power

o Continuous power supply even when one plant is closed down for vital maintenance activity, beneciary households would still get electricity to meet their basic household needs from other plants.

Connection of Mini Grid with National Grid:

o NEA would be more inclined to interconnect a Mini Grid than individual MHPs with their system as it would reduce technical and managerial issues raised by them

Achievement of System Sustainability:

o Increased revenue for MHPs from increased uses/sales of electricity

o Promotion of better inter scheme co-ordination and sense of electricity

Resources, Government grant, communities' cash contributions and voluntary labor spent for building MHPs are not wasted by closing them down when the grid reaches their catchment areas.

Development of distributed power generation system which is more reliable in the long run with MHP and other small scale renewable energy technologies as an integral part of the national electricity production and distribution system.

Urja Upatyaka Mini Grid Project

MHPs interconnected local grid is a much talked about potential technology to address some issues related to rural electrication in Nepal. However, there was no known micro hydro interconnected Mini Grid in operation in South Asia. Concept papers and thesis have been written highlighting potential benets from the perspectives of optimum

utilization of electricity both locally and through grid feedings, and nancial benets to rural people.

In 2001, UNDP/REDP had supported the Institute of Engineering, Tribhuban University to test synchronization of MHP in its laboratory with the national grid. The interconnection was successfully done. A report was produced and disseminated widely to stakeholders including NEA. In 2007, REDP conducted Detailed Feasibility Study for Mini Grid Development in Urja Upatyaka, Baglung. In 2009, AEPC/REDP supported interconnection of six MHPs in Baglung with the total installed capacity of 107 kW through 8 km long 11 kV line. As a result, over 1200 households are beneting with quality and reliable electricity round the clock.

The MHPs connected as Mini Grid are Upper Kalun

(This article is excerpted from a write up by Mr. Shakya, then Renewable Energy Expert at AEPC/ RERL. This was published in Experience Sharing of Mini Grid and Biomass Gasication, a AEPC/RERL publication). Mr. Bhupendra Shakya

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Khola (12 kW/ 115 households) at Paiyun, Kalun Khola (22 kW/ 230 houses holds) at Paiyun, Urja Khola I 26 kW/274 households), Rangkhani, Urja Khola II (9 kW/158 households), Rangkhani, Urja Khola IV (14 kW/ 290 households), Damek and Theule Khola (24 kW/ 290 household), Sarkuwa. All six of them generate 107 kW of electricity and connected households are 1200.

Lessons learnt

Mini Grid connecting several MHPs is technically feasible. However, nancial viability depends on a number of factors such as end-uses potential, distance between the MHPs, total capacity of the MHPs, potential for power trading with NEA, etc. A rigorous assessment is necessary to determine nancial viability.

Mini Grid could be the permanent source of electricity for areas with low chance of getting the national grid in near future.

By interconnecting a number of MHPs, Mini Grid provides sizeable capacity to connect with NEA grid. Furthermore, it creates an opportunity for rural people to trader power with the national grid and thereby keeps their plants in good condition.

Capacity building, coordination, understanding among community is major step for sustainable operation of Mini Gird project.

Baglung Mini Grid is becoming a research place and has built condence for replication of Mini Grid projects in other parts of the country.

Way forward

Capacity building: The community that operates the Mini Grid requires continuous support for still some more time. RERL has helped them to prepare their short term and long term strategies. As the technology and the management system are both new to the

rural areas, AEPC's support is required for training operators, cooperative management and end-use promotion.

Continuous research and development of technologies involved is establishment of a Mini Grid is required to build up local capacity for operation, management, repair and fabrication. Academic institutions, private companies and AEPC need to come together to help incorporate Mini Grid in curriculum, undertake research and development and ultimately fabrication or assembling.

Productive End-uses: Special efforts need to be given to promote productive end-uses so that the system can be nancially viable.

Monitoring: AEPC and DEES need to closely monitor the operation of the Mini grid and provide technical assistance for some time.

Interconnection with the national Grid: AEPC's Initiative to interconnect the Mini Grid with the national grid has not yielded any result so far but the initiative needs to be continued. Grid connection will give many benets to the community and the NEA. It will open new avenues in the mini-micro hydropower sector in the country. The rural people will not merely be consumers but also producers and suppliers of power.

The nancial support for institutionalization of the cooperative, smooth operation, repair and maintenance and capacity building of the people involved in Mini Grid may still needed.

Another source of power needs to be connected to the Mini Grid to meet the growing power demand and stability of the whole system.

Before more Mini Grid are promoted in the country, framework, guidelines and standards need to be prepared based on the Baglung experience. A cursory study has indicated that there are 21 potential Mini grid projects in 16 districts.

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Introduction

In achieving the sustainable development, hydro power project considers a key position and operates at the crossroads of two essential requirements for human welfare water and electricity in the form of modern clean energy. Even though there is no magic single solution to the sustainable development of the world, hydro power projects offer development potential for cleaner energy and effective water management where and when it is most needed. Moreover, the broad range of hydro power projects types and scales makes it more appropriate for various needs and contexts. The hydro power projects nevertheless remain efcient tools provided they form part of a properly integrated approach which balances all the factors required to achieve it. While not a cure-all for the worlds energy and water needs hydro power projects deserve proper consideration in any assessment of a countrys energy and water requirements. There is no doubt that the hydro power projects can contribute the energy mix and deliver benets for the sustainable development if the projects are found to be appropriate to local circumstances.

Electricity and Development

Access to affordable and reliable energy underpins all sustainable development objectives. Where energy supplies are lacking or insufcient,

employment prospects are hindered, women and children remain trapped on the treadmill of domestic chores and so cannot participate in the wider society, children do not have access to adequate education, health concerns remain neglected and services are insufcient, economic growth is stunted, and the way out of poverty is barred. Thus, basic development goals will be thwarted unless energy provision can be augmented. Following are the key points how electricity contributes the development.

Leads people out of poverty by enabling small scale enterprise and off-farm activities

Empowers women by freeing them from domestic drudgery

Promotes better health and health- care by powering hospitals and dispensaries

Increases educational opportunities for children by supplying power to schools

Provides cleaner and more efcient heating and cooking facilities in the home

Spurs economic productivity in providing reliable energy services for industrial development

However, poverty is a multi-faceted challenge and policies are required to tackle all aspects of it and electrication alone cannot deliver on development promises. In many places, both rural and urban electricity services, often suffer from poor or corrupt management, illegal connections, power

Hydro Power Development in theGlobal Energy Market

Micro/Mini Hydro Power as an Important Segment

By Jagadish Kumar Khoju

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shortage and blackouts. In addition, an electricity service is usually too expensive for the poor to use. Quite apart from these problems, different kinds of systems will be required for different areas. Remote rural areas are often best served by decentralized off-grid projects, where as densely populated urban areas often benet most from a centralized, compact electricity system.

Similarly, most people live without electricity in developing countries and many of these people are the worlds poorest and therefore least able to cope with challenges. Electrication can assist in meeting the millennium targets.

Small Hydro Power Project: Response to Rural Electrication

Where the extension of national grid to remote isolated rural communities is not feasible, the decentralized small hydro power projects can contribute signicantly to improving the economic development of the rural communities. Small scale hydro like micro and mini hydro power projects are most cost effective energy alternatives to national grid extension in the rural areas. Actual the comparative advantage of the small scale hydro has already resulted in the thousands of small dams encountered all over the world. The increasing number of such hydro projects can be observed in Asia, where is a signicant hydro potential for further development.

Table 1. Small Hydro Power Project Installed Capacity by World Region (Source: IHA)

Region Installed capacity (MW)

Percentage

Asia 32,641 68.0 %Africa 228 0.5 %South America 1280 2.7 %North America 2929 6.1 %Europe 10723 22.3 %Australasia-Oceania 198 0.4 %Total 47, 997 100 %

Small Hydro Power Project in European Union

An important role in achieving European

renewable energy goals can still be played by small hydropower resources that are distributed on the continent and can offer all the benets of dispersed renewable generation. Since about 1950, small hydropower has had a negative development in some EU member countries. Many small hydropower plants have been shut down because of age and competition from new, larger plants. The potential from reinstalling these plants and upgrading existing, underdeveloped small hydropower plants is estimated at an annual electricity production of approximately 4,500 GWh. Based on an analysis/study carried out in the years 19992000, the potential of new plants, reduced when economic and environmental constraints have been taken into account, is calculated to be about 19,600 GWh per year. If the economic situation for producers improves, and the environmental constraints decrease, the total contribution from small hydropower in the EUs fteen member countries could probably reach 60 TWh in the decade 202030.

However, among the European countries, Norway has a good experience in mini hydro power project development; its experience can be replicated in the other developing countries as well. In Norway, there was a big political issue of rural electrication for the remote rural areas when 75 % urban area had the access of electricity in 1980. In order to address this issue, the Norway government initiated to study of possible options of rural electrication for the rural areas. The study showed that the mini hydro power projects are not nancially sound and the government had formulated the subsidy policy for the mini hydro power promotion and highly encouraged local bodies, private companies and community as well. As a mountainous geographical situation and abundant hydro power potential, there was no problem of site identications and the increasing number of mini hydro project development was introduced as an approach of mini- grid that more than two mini hydro power projects gradually was synchronized at local networking form and the projects were integrated with irrigation purposes also from the perspective of multipurpose use of water resources for the more

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nancially viable. However, the central government played such coordinated role that the mini grid projects were further connected to national grid in feasible specic sites as per local demand. Norway is now such country where 99.8 % of total energy supply comes from hydro power.

Micro/Mini Hydro Power Project in Developing Countries

Micro-hydro installations are widespread in Asia, where there is a signicant resource potential for further development. China has a well-developed hydropower industry, with an estimated 60,000 small hydropower installations (less than 1 MW), and a combined capacity of about 17 GW. The installed small hydropower (less than 10 MW) capacity in Viet Nam is 61.4 MW, with an estimated potential of about 1.8 GW. Some 3,000 sites have been identied for micro-hydro installations in the range of 1 to 10 kW. These sites will serve irrigation and drainage needs, in addition to generating electricity for 2 million households. Many areas in Viet Nam do not have access to the electricity grid, due to the high extension costs. In these areas, mini hydro units are used by individual families for lighting and battery charging (for television and lighting use). It is estimated that over 3,000 family units of 1 kW or less are installed in Viet Nam. Other developing countries like Sri Lanka (35 MW), Laos, Bangladesh, India (1694 MW), Brazil (859 MW), Peru (215 MW), Congo (65 MW), Pakistan (107 MW), Papua New Guinea (20 MW) are the potential countries in micro and mini hydro power project development which most population reside in the rural mountain areas. There are also small scale hydro power projects in Africa. Guinea has identied 150 mini- and micro-hydro sites; Nigeria plans to develop 700 MW of capacity in 236 different projects. In the sub-Saharan region of Africa, such as in Ethiopia, Malawi, Uganda or the United Republic of Tanzania, topographical and hydrological conditions would also allow the implementation of hydropower plants.

With the support of different development partners since the 1970s, Nepal has succeeded in building

up an industrial sector capable of manufacturing or assembling all micro/mini-hydropower components except the generators for micro-turbines up to 500 kW. Nepal has developed micro/mini-hydro power projects of 52 MW through various technical and nancial support programmes.

Successful Implementation of Micro/Mini Hydro Power Project

Successful implementation of mini hydro power project in developing countries does not complete with the successful commissioning of the project. However, sustainable operation and maintenance of such project must be taken into consideration from the planning phase of the project. The sustainable mini hydro power project considers the several parameter of the smooth operation like quality, quantity, continuity, efciency, affordability. Similarly, institutionalization is another major factor of the sustainable project and operation cost of the project must be covered at a local level even after the discontinuity of external support. Hence, major objectives of the project should be clearly addressed before initiating such project which include social infrastructure (provision of energy for schools, health services, and drinking water), physical infrastructure (irrigations systems, roads), and economic infrastructure (small scale prot making business). As the capacity of rural people is very low in technical knowhow of such technology, capacity building processes like orientation, training, awareness creation are always most even this process takes a lot of time and additional cost except the total project construction cost which not only minimizes the operation and maintenance of the project in the project operation phase but contributes to increase the ownership of the community towards the sustainable project. Similarly, since the political interference is a major hurdle in the local community, the corporate structure or cooperative model of the management and the address of property right issue should always be considered from the beginning the project planning.

Based on the various studies of case study reports,

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(Mr. Khoju i s Sen ior Engineer at Alternative Energy Promotion Centre (AEPC) and Community Electrification Progarmme Manager at National Rural and Renewable Energy Programme (NRREP) of AEPC in Nepal and contact email : jagadish.khoju@gmail.comMr. Jagadish Kumar Khoju

following are the major technical and nancial reasons of the failure of the mini hydro projects:

Poor site selection and installation of equipment,

Affected by oods and landslides,

Poor estimation of hydrological conditions,

Non economic canal design

Negligence of civil works,

Lack of nancial sources for the repair and maintenance

It is well accepted matter that small river sections with geological stability, no vulnerable species, a high head within a short horizontal distance and where is strong support for development from the local community represent best sites for technically, environmentally and economically development sound hydropower project. The small hydro option depends for its success on competence in the wise choice of the best sites. However, funding small projects simply on the basis of their scale would be a pitfall, all factors like political, economical ,social, technical, environmental and, legal, need to be considered into the equation while development

and managing the small projects. Furthermore, in developing countries, there might be institutional constraints as well as a lack of experts to undertake the required support to several hundred small projects, where one large scheme might be easier to handle such point of view.

Conclusion

Renewable energy represented one-fth of total power generation, out of which hydro power is most advanced and exible of renewable and represents 87% of this production. Similarly, most of the worlds hydro energy remains to be tapped and worldwide total of economically feasible hydro generation is over roughly three times the current exploited total. Europe has the highest share of exploited capacity (more than 45%) and major hydro power projects of the 21th century will be built only in Asia, Latin America, and Africa. In developing countries, electricity supply from the large hydro power project to scattered rural hilly areas is not nancially viable due to high transmission and distribution cost to extend the grid to scattered settlements and low purchasing capacity of rural poor and the small hydro power project like micro/mini hydro power project is the best solution for the rural electrication to the isolated communities which can be taken an entry point for holistic rural development in a sustainable manner. Just electrication is not only the solution of sustainable development and there are various factors of social, economic and environmental issues in rural areas. Hence, if the proper management of development project taking the entry point of small scale hydro power project is introduced, it not only enhances the sustainable rural livelihoods of the areas but also supports to large hydro power project development. Such type of win-win approach not only contributes to achieve the international development goals at local and national levels but also supports the global thinking in sustainable development issue as large hydro power project development is the national and international interest and the produced electricity can also be exported to neighbour countries to meet the high power demand of dense population and small scale hydro project development, including mini grid connection to national grid in the feasible sites, is the interest for local level in hydro power potentially developing countries in the world.

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Alternative Energy Promotion Centre (AEPC) is a nodal institution established by the Government of Nepal with the objectives to popularise and promote the use of renewable energy technologies, to raise the living standards of the rural people, to protect the environment, and to develop commercially viable renewable energy industries in the country. AEPC was established in November 3, 1996 under then Ministry of Science and Technology of the Government of Nepal. Currently, it is under the Ministry of Environment, Science and Technology. The centre functions independently, and has a eleven member board with representatives from government sector, industry sector and non-governmental organizations.

As Nepal faces the challenges of poverty, issues of gender and social inclusion and issues of climate change all at the same time, promotion of renewable energy technologies has been one of the indispensible tools to overcome these challenges. AEPC, since its establishment has been promoting sustainable energy solutions to off-grid rural households and communities in Nepal who primarily lack electricity to light their homes or burning polluting fuels either for their lighting or cooking needs or to run their local enterprises and businesses. Recently, AEPC has also been promoting solar options to urban areas in an effort to lessen the burden of energy demand from the grid electricity. Clean Cooking and Lighting Solutions for All by 2017, the vision GoN to put on has created new opportunity to AEPC to perform well and with wider participations.

AEPC has wider vision and mission in promotion of alternative energy as roles and responsibilities. Short, medium and long term policy and plan formulation, Promotion of RET development

programmes, Standardization, quality assurance and monitoring, Service and support, Subsidy and nancial assistance delivery, Co-ordination with various government organization, development partners, NGOs/INGOs and private sector, monitoring, evaluation and quality control, and strengthening AEPC and its partners are the main roles and responsibilities.

AEPC has implemented Energy Sector Assistance Programme (ESAP I and ESAP II), Rural Energy Development Programme (REDP) successfully in the past.

Both phases of ESAP, supported by Danish Government were appreciably meaningful in development and promotion of micro hydro in Nepal. Other renewable energy technologies were also taken in to consideration as well in the ESAP. The support was focused on three main areas: 1) increased access to electricity produced from renewable energy sources (hydro and solar) to the rural population 2) increased use of improved cooking stoves among the rural population and 3) capacity development of the Centre itself. The rural activities are implemented through a solid network of NGOs and the private sector. The Centre is responsible for quality assurance, result

AEPC in promotion of RETsNRREP focus on Micro Hydro

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dissemination and awareness raising. The activities were implemented despite the running conict in the country.

Rural Energy Development Programme (REDP) was launched in 1996 as a small pilot initiative in ve remote hill districts. UNDP and The World Bank supported REDP to conduct as an AEPC programme. The programme was subsequently scaled up via the national Hydropower Development Policy of 2001, which focused on rural development via low-cost hydropower systems.

Keeping in view better results and requirement, REDP was extended to 40 districts. As of 2010, the programme had connected 59,000 households to micro hydropower installations, constructed 317 new micro hydropower plants with 5.7 megawatts of installed capacity, and installed numerous improved cooking stoves, toilet-attached biogas plants, and solar home heating systems. The primary beneciaries of the programme, which is now being extended to all 75 districts, are rural communities, with particular attention to vulnerable women and indigenous people. In addition to improving access to energy services, the programme has made possible signicant progress in rural development. Research conducted by UNDP and Nepals AEPC found that improved access to electricity in rural areas led to increase in household income by a thin growth, reduced average annual household spending on energy and creation of 40 new businesses for every new micro hydropower station brought on line. In addition to supporting business formation and raising rural incomes, this research found increases in school enrolment rates (particularly for girls), and improvements in child and maternity health, in water quality and access to modern sanitation, as well as in environmental quality. Reductions in time spent gathering water and rewood also allowed women to more actively

participate in socio-economic life.

REDP, thus, demonstrated the benets that can come from rural development programming that takes an integrated approach to economic, environmental, and social development challenges

Renewable Energy for Rural Livelihood Programme (RERL) had been introduced as continuation of REDP in 2011.

As AEPC has hosted different project interventions through support from development partners in the past.. Especially, the second phase of the Energy Sector Assistance Program (ESAP II) nanced by the GoN, Danida, DfID, the Norwegian Ministry of Foreign Affairs, KfW and SNV followed a

more coherent and coordinated approach that led towards realization of the need of a more coordinated sector development. As its result, in 2011, the GoN and development partners (Danida, DfID, the Norwegian Ministry of Foreign Affairs, KfW, SNV and UNDP) jointly agreed to support formulation of a National Rural and Renewable Energy Programme (NRREP), that it will be a single programme modality in which there will no other programmes or projects funded outside the NRREP and where the GoN has committed

itself to reform the subsidy system and nance a higher portion of the subsidies for Renewable Energy Technologies (RET).

The development objective of the National Rural and Renewable Energy Programme (NRREP) is to improve the living standard of rural women and men, increase employment of women and men as well as productivity, reduce dependency on traditional energy and attain sustainable development through integrating the alternative energy with the socioeconomic