session 4 - presentation to investment forum2013

7/29/2019 Session 4 - Presentation to Investment Forum2013

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To share the experience of establishing Micro-

Hydro through promoting productive end-usesin rural society in Nepal.


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Total area-: 1,47,181 sq. Km

Classified development region-: 5,or 14zone and 75 districts

Village development committees-: 4042

Hill and mountain by covered area-: 77%

of total area

Hill and mountain by covere


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Rural Energy Situation overview in Nepal

About 85% of the population live in rural areas

Below 60-68% of rural population has access to electricity

The vast majority of rural people is dependent on the

traditional fuels like wood, dung ,crop residue and musclespower.

More than 60% of the energy need is met by traditional fuels

and electricity demand is increasing by roughly more than 12%

annually


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Large, Medium, and MiniHydropower

Small and MicroHydropower (up to 100kw) havehuge potential in electrifying remotevillages.

Solar Wind (near the Tibetan Plato parts

of the country)

Bio-gas is highly feasible invillages below the altitude of1000m


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Community Based- 95%

Private- 4.6% Very few are owned by NEA

MHP Plants- 999nos18.85MW

Pico plants-1480nos 3.18MW

Community based63% (Before 2004)

Private37%

Total of MHP Plants

511Nos, (9MW)


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Electrification through national grid is expensive and time-consuming

for electrifying scattered settlement in difficult geographical terrain.

Nepal has innumerable streams and river are available; about 6000.

Most appropriate approach is to promote micro-hydro to supplyelectricity to the mountainous areas of Nepal.

Micro-hydro runs on simple concept of converting mechanical energy

electrical energy. Although capital intensive initially; it is cheaper than other renewabl

technologies and can be operated with locally manageable resource

Strong supplementary to the equitable regional development throughthe extension of decentralized energy resources.

Drudgery reduction in rural society


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By Government of Nepal, Agriculture DevelopmentBank, Nepal Only 50% of the electrical components of the total cost was

subsidised.

By AEPC/ESAP Projects up to 5 kW capacity

Rs 65,000/kW without transportation subsidy.

Projects from (6 to100) kW Rs 85,000/kW without transportation subsidy.

Transportation subsidy For up to 25km; subsidy per household is Rs.1200 approx. In far remote area project; subsidy per household is Rs.3000 max.


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High Initial Investment

Difficult to accumulate capital.In absence of collateral loan facilities difficult.

Lack of local knowledge in operation and maintenance of the power plant.

Technical knowledge of micro hydro insufficient before 1995.

Low load factor.

Low load factor and low tariff, adopted in line with paying capacity of theconsumers, resulted in insufficient revenue generation.

Inconsistency in government policies

Project Approval Process is too slow

Developer needs to meet numerous criteria

Water source use license, company registration, Tax registration, managemof financial resources etc.


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Peak Hours....

Evening 4-6 hours for lighting & cookingMorning 2-3 hours for lighting & cooking

During day time 6-8 hours energy use forproductive end-uses


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Tariff settingPeople had thought that micro hydropower was only for illumination

purpose at night .Now, they realized the fact that such power can b

used for other income generating purposes . like running mills orfactories ,operating-mail and internet, metal work shop, Poultry farming, C

store, and use for various other end usesThis is the major change thaseen in my own and other neighbouring villages, As well dynamictariff setting also most important matter of off grid electrification.

3 phase 10kw limit12AM-5AM3.5500Unit= Nrs 1500Cottage Industries

3 phase 6kw(Limit)9 AM-5PM7300Unit=Nrs 3000Cottage Industries

Single phase 5Amp24hours6.525 Unit=Nrs 150Domestic Lighting

Energy consumptiTime of dayEnergycharge

Nrs/kWh

Maximum chargeCategory


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3%Saw Mill6

4%Bakery5

11%Ropeway4

15%Nepali Paper factories3

27%Agro-Processing Mills240%Domestic Lights1

Realization-;

: Promotion of various End-uses made the project financially quite attractive and

sustainable.

% Change of figures for 1991-93-94 to 1994-95: Before End Uses only 40% of 1995 revenue was

generated

% Revenues increased after promoting end-uses=36%.,-Total Monthly % Expenses increased=3%


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Domestic light & cooking purpose

Cyber, Computer institute & digital photo studio

Agro-processing mill (Grander, Huller, Expeller,) Hi- vision & Cable TV net work with electronic repairing

centers .

Smart & NTC telephone tower.

Saw mill furniture industries.

Bakery.

Metal work shop .

Stone cutter mill.

Poultry farming .

Over all46% revenues come from these end-uses


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Improvement of financial status of the MHP project.

Need for identification and assessment of energy basedvarious cottage industries

Approximately 30% of revenue is generated alone from the agro

processing mill in my first 50kW MHP.


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Fire wood for cooking Kerosene for lighting


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Remittance was the main source of income

During 1990s employment was sought in British, Singapore andIndian armies by the youth in Barpak.

Time devotion in MHP project from 1989-1991 : development of Barpak first 50 kW Micro

Hydropower Plant. From 2004-2006: New 130 kW project.

Financing options limited

Regulatory bodies inefficient and complicated.


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Energy scenario in Barpak Village, Gorkha In 1991 first Micro hydro plant (50kW capacity) installed.

In 2006 first project decommissioned and 130kW capacity installed.

Now additional 300kW capacity required to fulfill energy demandwhich is increasing by (10-12)% per year

The new 300kW project will electrify more than 2000households including neighbouring villages Excess energy will be connected to community based 0n grid line.

This will help generate extra revenue.

Energy tariff regulated (controlled) and lowered. To encourage local industries and create employment.


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Based on Public Private Partnership model.

Financing modality (25-30) % equity investment

(70-75)% debt financing


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Inception of MHP

Energy generation concept Retrofitting private agro processing mills with dynamo

during evening for electricity generation .

Used for lighting purpose.

Todays Scenario Subsidy facilities to private projects stopped

after AEPC/ESAP phase II program. Limited innovations by private sectors.


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It has been realized that MHP can serve roles other than meeting lightinrequirements and can substantially improve livelihood of the beneficiarie

Employment and income generation, information and communication floenterprise development, etc are the interlinked areas that MHP cansupport.

Future development of MH sector should focus on soft loan facility tomaximizing energy load factor of MHP and on facilitating developmentssmall and medium enterprises.

In my experience, most efficient projects will come to existence whenprivate sector takes the investment and development initiatives andgovernment maintains stringent assessment and regulations measures

Study phase should include identification and assessment of end usesactivities.

Proper study, design and quality equipments are not the only factors forlong lasting project life but so is proper installation, operation andmaintenance of the MHP ro ect.


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session 4 - presentation to investment forum2013

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