Kushal GurungWindPower Nepal Pvt

Ltd- CEO

Financing clean energy projects in

Nepal

Nepal’s Energy Consumption:2015

16 GJ /per person 128 kwh/per person 65% access to grid

electricity

Clean Energy sources in Nepal

Hydro: 83,000MW Solar: 2100MW (2% of land) Wind: 3000MW Bioenergy: Biogas, Improved cooking stoves Waste to Energy: Municipal Solid Waste

Rivers: >6000

Hydropower potential: 83,000 MW

1st Hydro project: 500kW in 1911 AD

Installed capacity: 787 MW (≈ 1%)

Under construction:~2000MW

Hydro

Solar

Solar irradiance: 4.7 kwh/m2/day

Sunshine days: 300

Total potential: 2100MW (2% of land)

Installed On-grid: ~680kW

Installed Off-grid: ~40MW

Solar Applications: Solar cooker/ dryer Solar water heaterSolar street light

Wind

1980s: NEA led10kw*2 units Kagbeni project, failed

>2010: AEPC led Off-grid wind-solar hybrid community projects (4-5 sites)

Nepal wind resource mapping (2015-2018)

Next: On-grid wind? Potential: 3000MW

Bioenergy and Micro hydro

Domestic biogas ~350,000 installed 1,100,000 potential

Improved cooking stoves ~1,000,000 installed 2,500,000 potential

Microhydro ~54.5MW installed 100MW potential

Improved watermill ~10,000 installed 30,000 potential

Policies

Endorsed Global initiatives by Nepal: SE4ALL; SDGs (No 7) NEA (Ministry of Energy): State Utility

On-grid hydro: 35 year PPA; Tax breaks On-grid solar and wind: in-pipeline (no clear policy yet)

AEPC (Ministry of Population and Environment): Subsidy driven Biomass- Improved cooking system solar home system- Urban/Solar/Institutional Rural off-grid community electrification system

Micro-hydro Wind-solar hybrid system

Biogas- Residential/Community/Large scale/Commercial biogas Waste to Energy

Investment Board of Nepal Single window approach for FDI on big energy projects (>500MW)

Financing in Clean Energy- Government

Approach: Subsidy, Grant and Technical Assistance

National Rural & Renewable Energy Programme (AEPC) Single programme modality, from 2012-2017 Budget: $170.1 million, including $40 million of TA Included energy sources: solar, biogas, biomass

Renewable Energy for Rural Livelihood (AEPC) 2014-2019, supported by UNDP & GEF, Budget:

$5 million To develop 10 MW from mini and micro

hydropower plants, 2.5 MW of solar PV systems and establishment of mini grids connecting Micro-Hydro Plants of 300 kW capacity

Financing in Clean Energy- Government

Scaling Up Renewable Energy Program (AEPC) Extended Biogas Project, 2014-2019 World Bank funded, Budget: $ 7.1 million Target: support large scale off-grid biogas

projects for thermal application and electricity generation

Grid Solar and Energy Efficiency Project (NEA) World Bank funded, 2014-2020, $138 million Grid-connected Solar PV Farms Development;

and Distribution System Planning and Loss Reduction

NEA working on 25MW on-gird solar EPC tender

Financing in Clean Energy- Government

South Asia Sub-regional Economic Cooperation project: Power System Expansion (NEA/AEPC) Funded by ADB; 2014-2022 ~$440 million as Loan, Grant and Technical

Assistance On-grid: executed by NEA; Off-grid: executed

by AEPC Off-grid plan: 4.3MW of mini hydro and up to

500 KW of mini-grid based solar or solar/wind hybrid systems; $5 million loan, $10 million grant

On-grid solar project- $20 million grant, PPA competitive tender, NEA executed, date: TBC

Financing in Clean Energy- Government

Ministry of Federal Affairs and Local Development Public Participation Based Solar Street Light

Programme, i.e. ministry, local bodies and users’ committees bear 60, 25 and 15 % respectively

45,308 solar street lights within 2073/74 ; ~$10 million

Financing in Clean Energy- Non-govt

NGOs: Grant driven Rural applications- solar water pump,

biogas, improved cooking stoves WWF Hariyo Ban Program, Winrock, CRT/N,

etc Private Sector

Business model: most of them are Vendors and EPCs

Emerging model: Energy Service Company (ESCOs)

Opportunities >30% population have no access to grid,

i.e. 90 lakhs*100watt = 900MW off-grid opportunity

On-grid: Peak demand is up to 1400MW, while installed capacity is less than 900MW =500MW

Growing demand for electricity: 10% annual growth

Nepal wants to become Developing Country by 2022 (Bangladesh’s per capita electricity consumption is 258kwh), i.e. more electricity needed

Modernised Agriculture: solar water pump, machineries

Improved Access to Finance: Central Renewable Energy Fund (US$113.1 million); Urban solar subsidy

Bottle necks

On-grid Unclear policy for renewables, other than hydro

Off-grid Mostly subsidy driven- EPC model Size limit up to 100kW system (2073) Unclear policy for ESCO business Rural population have low electricity consumption

Access to finance Unclear law for innovative financing instruments-

crowdfunding Project financing at promoters’ risks Bureaucratic hurdles in channelling FDI

Way Forward More pilot projects esp for on-grid Conducive renewable energy policies

Net metering, Feed-in-Tarrif Attractive financial schemes and tax

breaks Accelerated Depreciation Tax Production Tax Credits

Push for local manufacturing Conducive policies for FDI

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