Energy Synopsis Report 2006 : Nepal

Government of Nepal Water and Energy Commission Secretariat

Energy Synopsis Report: Nepal 2006

Report No: 7, Seq. No. 489

June, 2006 Kathmandu

Energy Sector Synopsis Report, 2006 i

FOREWARD

It is with great pleasure to bring before you all the latest information on the energy situation in Nepal in the name of “Energy Synopsis Report 2006”. This is the seventh report in WECS publication series of the Energy Sector Synopsis Report. Energy is one of the basic and important infrastructures for the development. In any sector, reliable data and documentation serve as a necessary background upon which the planning and management of the sector depends. In this context, since 1983, the Water and Energy Commission Secretariat has been publishing this kind of report to present the energy situation of the country. We hope that this document will prove to be useful as an introduction and update to the readers on the energy scene of Nepal. Further, this updated synopsis report will prove to be of great value for the ongoing tasks of energy planning and strategy formulation and assessment of energy sector in the past. We believe that this report will provide initial information for the analysis of the energy implications of the energy strategies to meet the challenges and opportunities of the future. WECS welcomes suggestions, comments and point out errors. WECS will appreciate any efforts towards such cooperation which will enable us to improve further publications and updates. Efforts made by Mr. Ram Prasad Ghimire, Energy Engineer in preparing this report are highly appreciable. It is the hard work of collecting and compiling of various data at different times that has make this happen. I would also like to thank Mr. Suresh Raj Uprety, Energy Planning Director, Mr. N.M Joshi, Mr. D.L. Shrestha and Mr. Sanjaya Dhungel for their continuous support and guidance in preparation of this report. The efforts made by Mr. Mahdav Dev Acharya in designing the cover page and Mr. Kiran Giri for his input in the economic matters is quite commendable. I would also like to thank all the directors namely Mr. Rajendra Kishore Kshetri, Dr. Umesh Nath Parajuli for reviewing this document and providing their valuable comments and suggestions. Finally, I hope that this report will prove useful and valuable for all those concerned in the field of energy. Executive Secretary Water and Energy Commission Secretariat

Energy Sector Synopsis Report, 2006 ii

Tables of Content Forward……………………………………………………………………………………..ii Acronyms and Abbreviations ............................................................................... iv 1. Introduction .......................................................................................................1

1.1 Background..........................................................................................................1 2.2 Demographic Setting ...........................................................................................1 1.3 Energy and Economy ..........................................................................................2 1.4 Energy and International Cooperation.................................................................3 1.5 Energy Acts and Policies.....................................................................................4 1.6 Energy and Environment .....................................................................................5 1.7 Gender and Energy ..............................................................................................5

2.Energy Resources Base ....................................................................................7 2.1 Traditional Energy Sources .................................................................................7

2.1.1 Fuelwood .....................................................................................................7 2.1.2 Charcoal Supply ........................................................................................15 2.1.3 Agricultural Residue..................................................................................16 2.1.4 Animal Waste ............................................................................................19

2.2 Commercial Energy...........................................................................................21 2.2.1 Hydropower Resources .............................................................................21 2.2.2 Petroleum, Natural Gas and Coal ..............................................................22

2.3 Alternate Energy Resources ..............................................................................24 2.3.1 Solar...........................................................................................................24 2.3.2 Wind ..........................................................................................................26

2.3.3 Biogas…………………………………………………………………….27 2.3.4 Microhydro……………………………………………………………….28 3.Energy Consumption Scenario.........................................................................30

3.1 Consumption Pattern .........................................................................................30 3.2 Sectoral Energy Consumption...........................................................................32

3.2.1 Residential Sector Energy Consumption...................................................34 3.2.2 Industrial Sector Energy Consumption .....................................................35 3.2.3 Commercial Sector Energy Consumption .................................................36 3.2.4 Transport Sector Energy Consumption .....................................................36 3.2.5 Agriculture Sector Energy Consumption ..................................................37

4.Energy Imports and Exports.............................................................................39 4.1 Petroleum Fuels .................................................................................................39 4.2 Coal....................................................................................................................40 4.3 Electricity ..........................................................................................................41

5.Energy Prices and Markets ..............................................................................42 5.1 Market Structure and Pricing Overview............................................................42

5.1.1 Fuel-wood Market and Prices....................................................................42 5.1.2 Petroleum Fuel Prices................................................................................44 5.1.3 Electricity Prices........................................................................................45

References and Bibliography ..............................................................................48 Annexes ..............................................................................................................51

Energy Sector Synopsis Report, 2006 iii

Acronyms and Abbreviations ADB/N Agriculture Development Bank, Nepal AEPC Alternative Energy Promotion Center ATF Aviation Turbine Fuel BSP Biogas Support Program CDR Central Development Region DCSI Department of Cottage and Small Industries DDC District Development Committee DFO District Forest Office DFRS Department of Forest Research and Survey DM&G Department of Mines and Geology DoFSC Department of Forest DONPWR Department of National Park and Wildlife Reserve EDR Eastern Development Region FAO Food and Agricultural Organizations FWDR Far- Western Development Region FY Fiscal Year GDP Gross Domestic Product GJ Giga Joule GWh Giga Watt Hour HH (hh) Household ICIMOD International Center for Integrated Mountain Development ICS Improved Cook Stove INGO International Non- Governmental Organization KCAL Kilo Calories LDO Light Diesel Oil LPG Liquefied Petroleum Gas LRMP Land Resources Mapping Project MFSC Ministry of Forest and Soil Conservation MH Micro-hydro MHP Micro-hydro Plant MOE&ST Ministry of Environment and Science and Technology MPFS Master Plan for Forestry Sector MS Motor Spirit Mt. Metric Ton MW Megawatt MWDR Mid- Western Development Region MWh Megawatt Hour NCI Non Cultivated Inclusion NEA Nepal Electricity Authority NFI National Forest Inventory NGO Non-governmental Organization NOC Nepal Oil Corporation

Energy Sector Synopsis Report, 2006 iv

NRs Nepalese Rupees TCE Tons of Coal Equivalent TCN Timber Corporation of Nepal TOE Tons of Oil Equivalent WDR Western Development Region WECS Water and Energy Commission Secretariat

Energy Sector Synopsis Report, 2006 v

1. Introduction

1.1 Background Energy is a crucial input into the development process. However, the current energy system is not sustainable in particular because of the negative effects of burning biomass and fossil fuel. In Nepal, the huge demand for energy to facilitate economic growth and social development is largely met with biomass fuels. In order to attain sustainable development in the long run, dependency on this resource must be reduced gradually, in favor of renewable energy sources. The links between energy, environment and sustainable development present a difficult paradox to Government of Nepal. The extension of energy services to people is the main instrument for alleviating poverty, but burning biomass has significant negative effects on the well-being of humans and eco-systems. This has also the impact on indoor and urban air pollution, cross-boundary pollution and global climate change. Energy in Nepal is derived from biomass resources, from imported fossil fuel resources, hydropower and renewable energy resources (solar, micro-hydro and biogas). Ministry of Water Resources is primarily responsible for the hydropower development. Ministry of Industry, Commerce and Supplies, through public corporation like the Nepal Oil Corporation is responsible for the supply of fossil fuels. The Ministry of Science and Technology is taking leading role in the promotion of alternate energy primarily the renewable energy sources through Alternative Energy Promotion Center. Ministry of Forestry and Soil Conservation looks after the forest sector, which is the major source of energy in Nepal. There are private entities responsible for the import of coal and also local suppliers of lignitic coal form Dang area of Nepal. Nepal has the Energy Perspective Plan (1991-2017) and Renewable Energy Perspective Plan (2000-2020) and is being implemented in the energy sector.

2.2 Demographic Setting Situated in South Asia, Nepal is a landlocked country bordered by the Tibetan Region of China in the north and by India in the east, west and south. It is roughly rectangular in shape with a total land area of 147,181 square km, stretching 885 Km from east to west and between 145 to 241 Km from north to south. Topographically, the country can be divided into three distinct regions from north to south: the mountains, the hills, and the flat plains known as the Terai. Lying at an altitude ranging from 4,877 to 8,848 meters above sea level, the mountainous area includes the renowned Himalaya, the world's

Energy Sector Synopsis Report, 2006 1

youngest mountain chain, with eight of the world's ten highest mountain peaks, including Everest. The hilly region lies in the middle part of the country, with altitudes varying between 610 meters and 4,877 meters above sea level. The Kathmandu Valley, where the country's capital is situated, and many other scenic valleys, basins and pockets are in this region. The Terai, which is an extension of the Gangetic plains of India, forms a low flatland along the southern border. It comprises most of the fertile and forest areas of the country. Due to its diverse topography, almost all the climatic zones of the earth are found in Nepal from tropical to sub-arctic. The mean annual temperature is about 15 degrees Celsius; rainfall varies between 250 millimeters and 4000 millimeters, with about 80 percent of the precipitation occurring during the monsoon season, which typically lasts from June until September. Administratively, Nepal is divided in five development regions, fourteen zones and seventy five districts. Districts and zonal boundaries are generally demarcated with reference to watersheds and, therefore, may not necessarily fall wholly within one physiographic zone. Each district is further subdivided into Municipalities and Village Development Committees (VDCs) according to the level of infrastructural development. There are all together 3992 VDCs and 58 Municipalities in the country. Each VDC are again divided into 9 wards, while the municipalities are divided into wards ranging from 9 to 36 according to its area.

1.3 Energy and Economy Capital, labor and energy are three primary factors that contribute to and influence economic growth in any country in the world. Capital is the equipment, machinery, manufacturing plants and office buildings that are necessary to produce goods and services. Labor is the availability of the workforce to participate in the production of goods and services. Energy is the power necessary to produce goods and services, and transport them to their destinations. These three components are used to produce a country's gross domestic product (GDP), the total of all output produced in the country. Without these three inputs to production, business and industry would not be able to transform raw materials into goods and services. Energy is the power that drives the country's economy. In the industrialized nations, most of the equipment, machinery, manufacturing plants and office buildings could not operate without an available supply of energy resources such as oil, natural gas, coal or electricity. In fact, energy is such an important component to manufacturing and production that its availability can have a direct impact on GDP and the overall economic health. Sometimes energy is not readily available, because the supply of a particular resource is limited or because its price is too high. When this happens, companies often decrease their production of goods and services, at least temporarily. On the other hand, an increase in the availability of energy—or lower energy prices—can lead to increased economic output by business and industry.


In Nepal too, the energy sector and its interactions with the economy represents an important determinant for the economic policies. All economic policy and planning initiatives have a direct and/or indirect impact on the demand for, and supply of commercial and noncommercial energy. It can be seen from the figure 1.1 below that though there is steady growth rate in GDP, the energy consumption growth rate is not in par with the GDP. This may be due short in supply of the energy fuel as during this year, Nepal has faced several energy supply problem, mainly in the commercial source of energy.

Figure 1.1

Historical Correlation between GDP and Total Energy Consumption

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1.4 Energy and International Cooperation Nepal has been supported by donors’ agencies for its economic development since it initiated five years development plan. In the energy sector too, there is no exception. The major share of energy investment comes from donors and international NGOs. Nepal has been receiving international assistance for a long time in hydro resources development. Also, since early nineties, there has been huge assistance in the alternative energy sector through various donors, namely the SNV, NORAD, DANNIDA, GTZ, KfW, World Bank, etc. also there has been various technical assistance through UN organizations like UNESCAP, FAO, UNDP and SAARC (SARI-E) in the software part. Recently, BIMSTEC like organization have been established in the south Asia for the energy security of the region. For effective coordination and cooperation, Nepal is the member of various committees, like World Energy Council, ICOLD etc. and WECS have been acting as the secretariat of


the Nepal Chapter of these organizations. WECS has been the focal point of various organizations like UNESCAP, FAO and BIMSTEC.

1.5 Energy Acts and Policies The government of Nepal has the sole responsibility for establishing the statutory, legal and policy framework for the energy sector. A number of government departments and agencies are involved in the policy formulation, sub-sectoral planning and project implementation. The statutory framework, under which public and private energy supply activities take place, is embodied in a number of Acts and Regulations approved by the parliament. The main statutes governing energy sector activities at present include: Forest Act, (1993) Electricity Act, (1992) Water Resources Act, (1993) Hydropower Development Policy, (1992) Soil & Watershed Conservation Act, 1982 Nepal Petroleum Act, 1983 Nepal Electricity Authority Act, 1984 Mines & Mineral Act, 1985 Industrial Enterprises Act, 1992 Environment Protection Act, 1996 Petroleum Rules, 1984 Solid Waste (Management & Resource Mobilization) Rules, 1989 Water Resources Rules, 1993 Electricity Rules, 1993 Forest Rules, 1994 Buffer Zone Management Rules, 1995 Conservation Area Management Rules, 1996 Environment Protection Rules, 1997 Various other Acts also provide the statutory authority for the different Ministries, Commissions and Public Corporations operating in the energy sector. Also Environment Protection Act, 1996 and Investment and Industrial Promotion Act govern activities, which directly and indirectly affect the energy sector programs. The government of Nepal has also introduced subsidy policy for the development and promotion of renewable energy technology in the name of Renewable Energy Subsidy Guidelines in 2000 B.S. Microhydro, Solar, Biogas etc. programs are provided different subsidies through Alternative Energy Promotion Center. Similarly for the development and promotion of Hydropower through private sector, the Government has established Power Development Fund.


1.6 Energy and Environment The main use of natural resources is to generate energy. Every human action intended for energy generation alters the prevailing environment in one form or the other. There are several ways of analyzing and understanding environmental issues and their policy implications for energy production, supply and use. It was during the early 80s, the government realized that sustainable and maximized economic output of development projects can be achieved by proper due care of environmental aspects. Realizing importance of environment, Government of Nepal has promulgated Environment Protection Act (1996) and Environment Protection Rule 1997 First Amendment 1999. The EPR made compulsion to carry out Initial Environmental Examination/ Environment Impact Assessment and Environmental Auditing for development projects. According to the Act, the proponent must implement environment management plan to minimize the likely impact of the project. Power project that require IEE: 1. Transmission line up to 66 kV

2. Rural electrification of 1 to 6 MVA 3. Hydropower project 1 to 5 MW

Power project that require EIA: 1. Transmission line of more than 66 kV 2. Rural electrification of more than 6 MVA 3. Hydropower project of above 5 MW 4. Diesel or thermal electricity generation plant above than 1 MW

The policy of Government of Nepal on Environmental Assessment requires that the potential environmental consequences of a project are to be considered as early as possible in the planning and decision making process to avoid causing irreversible environmental damage. The initial assessment process is designed to ensure that the effects of all major projects are fully considered early is planning and designing of a project. Recently Nepal has entered the regime for the exchange of carbon credit as per the Kyoto Protocol liking energy with the environment and climate change. The Government of Nepal has given the responsibility to Ministry of Environment, Science and Technology to acts as the Designated National Authority (DNA) for any CDM activities in Nepal. Accordingly, Biogas Support Program has recently registered two projects comprising of 19,396 biogas plants.

1.7 Gender and Energy The opportunities for the Nepalese women to gain from the development activities have been hindered by illiteracy, poor health, poverty and traditionally conservative attitude towards them. As long as women, who constitute more than 50% percent of the total


population are not fully recognized for their contributions in the development activities of the nation, and not encouraged to participate in all phases of development, such development will be incomplete and in the end impossible. The government of Nepal is committed in making equal and meaningful partners in the development process. Special provision has been made in the constitution of Nepal to make women equal from the legal point of view and to ensure the improvement of their personnel, economic and social development. To mainstream the gender issues in Water and Energy related activities, WECS has created a Women in Development Section under Social, Economic and Environment Directorate in 1993. In 1996, this section was renamed with Gender and Development under the same directorate. Since the, WECS has promoting the concept by mainstreaming gender issues in its all activities, naming the few, National Water Resources Strategy 2002 and National Water Plan 2005.


2. Energy Resources Base Energy sources have been categorized under three broad types: (i) traditional, (ii) commercial and (iii) alternate energy sources (alternate energy is synonymous with new, renewable, and non-conventional forms of energy). This categorization pertains to the modality of use of the resources in abstracting the inherent energy contents. Traditional energy sources include biomass fuels particularly; agriculture residue and animal dung used in the traditional way - which is direct combustion. Technological advances open up ways in which these primary energy sources are used. Biogas and briquettes are examples of modern interventions wherein traditional energy sources undergo transformations into "modern" types of fuels. Commercial sources of energy are fossils fuels (coal and petroleum fuels) and electricity. Alternative energy sources include the micro hydro, solar power, wind power, biogas, briquettes etc. Biomass, Hydropower and Solar power are the three major indigenous energy resource bases in the country. Also there exist some sporadic deposits of natural gases and coal reserves, which are very small in quantity and still not exploited commercially. Though Nepal has a huge potential of hydropower production, its exploitation has been to a very minimal and therefore it is the biomass sector which dominates the overall energy supply and consumption.

2.1 Traditional Energy Sources The energy sector of Nepal is characterized by excessive reliance on the traditional sources of energy such as the , agricultural residues and animal waste. is derived mainly from the forest and shrubland. Paddy, maize and sugarcane are the major sources of agriculture residue used for energy purposes. Animal wastes of the livestock mainly from cattle and buffalo constitute a significant source of energy especially for cooking and heating purposes in the domestic sector. Nepal relies mainly on biomass fuels due to the lack of development of other energy alternatives and overall poor condition of the nation. These sources of energy will continue to play a dominant role in the Nepalese energy system for years to come.

2.1.1 Fuelwood Fuelwood has become the synonym for energy, particularly in rural and residential sectors of Nepal just because of its huge contribution in total energy system and this situation seems to prevail for a long time to come at least for the foreseeable future. Fuelwood comes from various sources and the role of forest area is very remarkable in this regard. The sources of fuel wood here in the report are mainly categorized based on


the major land use types of the country as per the Master Plan for the Forestry Sector Nepal (1988) and the Water and Energy Commission Secretariat (1988) for the estimation of sustainable fuel wood supply from gross and accessible/reachable areas of each land categories. The major land use types of the country are Forest, Shrub land, Grassland, Non-cultivated inclusions, cultivated land and other land. Other land includes the snow covered, water bodies, cliff and wasteland. All four categories of land use types have been considered for fuel wood production except other land types. Total sustainable supply of fuel wood from gross and accessible/reachable areas of each land category has been assessed in the report. The sustainable supply of fuel wood from reachable area of all land resources type for the year 1978/79, 1994/95, 2000/01 and 2003/04 are presented in Table 2.1. The sustainable supply was about 6.8 million tons for the year 1978/79 as estimated by the WECS in "District, Regional and National Forest Cover Class Summaries of the Area, Fuel wood Yield and Wood Volume for the Kingdom of Nepal" report (1988). Annual sustainable yield of fuel wood from per unit of land has been derived from the various forestry research reports available at that time and same productivity factor has been used to estimate the sustainable yield for the year 1994/95, 2000/01 and 2003/04. The sustainable supply for the year 2003/04 was about 6.4 million tons that is only about 57% of the gross potential supply for the same year. Sustainable supply from reachable areas in 2003/04 is about 5% and 3% less than that of sustainable supply from accessible areas of 1978/79 and reachable areas of 1994/95 respectively. Table 2.1: Sustainable fuelwood supply from Accessible/Reachable area in Nepal

Unit in 000 tons Fuel wood Sources 1978/79(1) 1994/95(2) 2000/01(3) 2003/04(4) Total Forest 5,009 4,607 4,173 3,844 Shrub land 306 563 808 1,133 Grassland 52 73 71 69 NCI land 340 313 304 297 Cultivated land 1,135 1,135 1,135 1,135 Total 6,841 6,691 6,491 6,478

Source: (1) Fuel wood supply data for the year 1978/79 has been derived from the WECS study “District, Regional and National Forest Cover Class Summaries of the Area, Fuel wood Yield and Wood Volume for the Kingdom of Nepal, 1988. (2) Data for the year 1994/95 has been derived from the report "Forest Resources of Nepal, 1999, Department of Forest Research and Survey, Nepal. (3) & (4) Data for the year 2000/01 and 2003/04 are estimated based on above mentioned report For this report, accessibility factor, therefore, is not used, instead reachability factor has been adopted as mentioned in the DFRS (1999) report on National Forest Inventory, according to which a forest area is non reachable if it is located on a slope more than 100% (45 degrees), or it is surrounded by steep slope, landslides or other physical obstacles or protected areas (Table 2).


Due to the changes of concept, percentage of accessible forest area has increased from about 43% to 51% as reachable one, whereas percentage of accessible area of shrub land significantly decreased from about 64% to 52% because same reach-ability factor of forest has been used for shrub land areas in fuelwood assessment purpose.

Table 2.2: Accessible and Reachable areas of land use type

Fuel wood Sources Accessible area in 1978/79

Reachable area in 1994/95

Reachable area in 2003/04

Total Forest 43% 51% 51% Shrub land 64% 52% 51% Grassland 30% 45% 45% NCI land 100% 100% 100% Cultivated land 100% 100% 100% Total 49% 57% 57%

Source: Data derived from the study as mentioned in the table 2.1. According to DFRS (1999), the forest cover has decreased and shrub cover has increased in every development region. The total forest area has been decreased by about 24% (1.34 million ha.) during the period of 16 years from 1978/79 to 1994/95, which is equivalent to about 1.7 percent per year in the whole country. However, annual loss of forest in the Terai region is found slightly lower (i.e., 1.3%) than the national annual rate which indicates the higher level of deforestation rate in hills and mountain region of Nepal. Shrub land has decreased from 52% to 51% from 1994/95 to 2003/04 in 10 years of duration using the same rate of change as mentioned in DFRS, (1999) report. Shrub lands are the degraded forest land. Above figures shows rapid degradation of forest quality in all development region of the country. Due to this, forest area has declined to only about 63% of the 1978/79 level in 2003/04. Contrary to this, shrub land area would be nearly four times greater in size at present than what was in the year 1978/79. Area of the grassland and non-cultivated inclusion has been estimated reducing at an annual rate of loss by about 0.5% which is equivalent to the rate of loss of forest and shrub land together during the period as mentioned above. This rate is adopted for the calculation of sustainable fuelwood supply from such land types. Beside these, few more assumptions have been applied in connection to area calculation of land use type, which is as follows: • Rate of change of forest and shrub land remains the same even after the year of

National Forest Inventory, 1994. • Reachable areas of shrub land, grassland and NCI have been assessed assuming the

same percent of reachable area of forest found in every development region of the country.

• Reach-ability factor of the land use types are first calculated at the regional level and then aggregated to find the national figure.


The important assumption here in the assessment of sustainable fuel wood supply from gross and reachable/accessible areas is based on implementation of prescribed management system of the forest. This type of supply assessment is, therefore, useless and has no sense if the forest resources are not managed scientifically. However, this estimation of sustainable fuel wood supply is very much useful in planning exercise and it is senseless unless the fuel wood is produced in accordance with prescribed management system. It is very difficult to manage such land resources scientifically. However, community forest area and private woodlots can be assumed as the scientifically managed areas in terms of wood production. In general, wood products from natural forest area of Nepal are being extracted without applying any management scheme. This study uses the same productivity factor of each land use type what was mentioned in the WECS (1987) report on Fuel Wood Supply in the District of Nepal as presented in Table 2.3. Furthermore, this study doesn't include the supply of fuel wood from such land resources which are converted from forest, grassland and NCI. It has been widely observed that Nepal's cultivated land is being expanded due to the conversion of land mainly from forest, shrub land, grassland, NCI and even other land types. However, it is very difficult to find how much of the lands are being converted from one to another because it is very complex to find the rate of conversion. No such types of comprehensive study are found. However, it is widely found that once the other land use types losses there is greater chance of expanding the area of cultivated land. Sustainable supply potential of fuelwood in Nepal in this study has been assessed with some assumptions as mentioned below. Basis for the assessment is WECS previous report namely the Fuel Wood Supply in the District of Nepal (1987) and District, Regional and National Forest Cover Class Summaries of the Area, Fuel wood Yield and Wood Volume for the Kingdom of Nepal (1988). However, accessibility factor used in that report has been changed and replaced by reachability factor for assessing the potential supply of fuelwood.

Table 2.3: Sustainable Yield of fuelwood from land use types in Nepal

Fuel wood Sources Yield (tons/ha.) Remarks Forest 2.1 Average of the Development Region Shrub land 0.69 National Average Grassland 0.10 National Average NCI land 0. 69 National Average Cultivated land 3.50 National Average

Source: 1. WECS, 1987. District, Regional and National Forest Cover Classes Summary of the Area, Fuel wood

Yield and Wood Volume for the Kingdom of Nepal. 2. WECS, 1988. Fuelwood supply in the districts of Nepal. Assumptions: • Same yield factor have been used as used by the WECS (1988) report on " District, Regional and

National Forest Cover Classes Summary of the Area, Fuel wood Yield and Wood Volume for the Kingdom of Nepal, 1988" to assess the total fuel wood supply from each type of land resources while


each type of land resources areas have been calculated based on data found in the LRMP report (1978/79) and DFRS (1999) report on National Forest Inventory.

• Supply potential of fuel wood from cultivated land remains the same as it was in the year 1978/79. • Same reachability factor for forest area, found in the DFRS (1999) report, has been used to shrub land

and grassland areas, while reach-ability factor for the NCI and cultivated land remains the same (i.e., 100%).

• Sustainable supply potential of for the year 1978/79 is calculated based on accessible areas of the land resources, whereas supply for the rest of the year (i.e., from 1979/80 to 2003/04/05) are calculated based on reachable areas of the land resources as indicated in DFRS (1999) report .

Fuel Wood Supply by Sources As mentioned, forest are the major sources of in Nepal which contribute currently about 60% in total primary energy supply from reachable area and its contribution is gradually decreasing over time. Significant change can be found in the shrub land supply whose contribution increased from 4% in 1978/79 to about 8% in 1994/95, 12% in 2000/01 and 17% in 2003/04. This is mainly because of increase in the area of shrub land by about 114% during the 10 years period of 1994/95 to 2003/04. Table 2.4 : Condition of Land resources by Landuse type for Sustainable Supply potential of fuel\wood in Nepal

Fuel wood Sources 1978/79 1994/95 2000/01 2003/04 Total Forest 73.22% 68.86% 64.29% 59.34% Shrub land 4.47% 8.42% 12.45% 17.49% Grassland 0.76% 1.09% 1.09% 1.07% NCI land 4.96% 4.69% 4.69% 4.58% Cultivated land 16.59% 16.96% 17.48% 17.52% Total 100.00% 100.00% 100.00% 100.00%

Source: Figure derived from the study as mentioned in Table 2.1 No significant difference can be observed in the contribution of different landuse types in the supply of woodfuels in the past years except forest and shrub land. In total, gross supply potential has been decreased by about 18% during 27 years from 78/79 to 04/05 while supply from accessible area to reachable area decreased only by about 5% during the same period. Sources of fuelwood supply are generally categorized broadly into two types. One is the off-farm source and another is the on-farm. The supply from cultivated land is termed as on-farm and supply from other landuse types is known as off-farm. Contribution of off-farm supply in the total potential of fuel wood from reachable area is far higher than that of on-farm supply. Only about 18% of the total sustainable supply comes from on-farm and its contribution remains almost same since 1978/79. It indicates that Nepalese rural farmers keep low level of tree growing areas within their cultivated land. It seems that the contribution of off-farm resources for fuel wood supply will be more or less same for a long time to come until some radical changes occur in the energy supply system of the country.



Fuelwood Supply Potential by Physiographic Region Nepal's physiographic regions are broadly divided into three types namely Terai, Hills and Mountain. In terms of fuelwood supply, Terai alone produces about one fifth of the total supply and the remaining amount comes from Hills and Mountain. Figure 2.1 provides the information about the contribution of each physiographic region by land-use types. Figure 2.1: Sustainable Fuelwood Production by Physiographic Region in Nepal, 2004

Forest area nearly contributes equally in all physiographic regions in total supply system. High variation is found in contribution of shrub land and cultivated land in different regions. A quarter of the total supply in mountain region comes from the shrub land alone whereas its contribution is around 20% in hills. On the other side, importance of cultivated land in Terai region for fuel wood supply is high, which is nearly one third of the total. Contribution of cultivated land gradually decreases as altitude increases. It indicates intense practice of tree growing and larger area of cultivated land in the Terai region. Fuelwood Supply Situation in Development Regions Figure 2.2 shows the sustainable supply potential of fuelwood by development region and source type, according to which fuelwood production in the development regions varies from 14% in WDR to 26% in EDR of the total supply. Like in the physiographic regions, contribution of each land use categories in all development regions seems to be similar to a great extent. It simply indicates the proportional distribution of land use in each development regions of the country. The supply is dominated by forest areas followed by

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Terai 59.77% 0.46% 0.31% 4.14% 35.33%

Hills 57.53% 19.83% 0.37% 6.14% 16.12%

Mountain 62.75% 25.91% 3.10% 1.67% 6.57%

Forest Shrubland Grassland NCI land Cultivated land

shrub land, NCI and grassland respectively in all regions. However, cultivated land in CDR, EDR and WDR is the second largest source of fuel wood supply where this land is third largest source of supply in the case of the FWDR and MWDR. Figure 2.2: Sustainable Fuel Wood Production by Development Region in Nepal, 2004

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Sustainable Fuelwood Production by Dev.Region in Nepal, Year 2004Total sustainable supply 6.47 million tons

Forest 58.99% 52.11% 52.68% 70.61% 58.94%

Shrubland 24.81% 27.97% 10.86% 6.41% 17.88%

Grassland 0.93% 1.94% 1.52% 0.48% 0.72%

NCI land 3.14% 3.64% 7.57% 4.98% 4.29%

Cultivated land 12.12% 14.33% 27.38% 17.52% 18.17%

FWDR MWDR WDR CDR EDR

Total Potential Supply equal to 6.47 million tons.

On-Farm Fuelwood Supply Fuelwood derived from cultivated lands are here termed as the On-Farm fuelwood supplies which currently contributes about 18% of the total sustainable supply in Nepal. Proportion of the non-cultivated land within the cultivated land of private farm in each development region is the significant factor to estimate on-farm fuel wood production. A detail of the on-farm fuel wood supply by development region and physiographic region is presented in Table 2.5 below. At national level, about 11% of the cultivated land is assumed to be remained as non-cultivated land to grow primarily for trees/wood lots. The region wise proportion of non-cultivated land within the category of cultivated land is also presented in table 2.5. This non-cultivated area factor for each development region


and factor for fuel wood production is used to estimate the on farm production and supply potential as practiced in the WECS. Table 2.5: Sustainable supply potential of fuelwood from On-farm Areas, 2003/04

Unit in 000 MT Physiographic Region Development Region Non Cultivate Area

in Cultivated Land Terai Hills Mountain FWDR 12.42% 46 66 16 MWDR 12.13% 42 111 39 WDR 11.83% 86 141 19 CDR 9.42% 125 124 11 EDR 10.50% 162 122 24 Nepal 10.92% 461 564 110

Sources: Estimation based on WECS (1987) report on Fuel wood supply in the district of Nepal. According to the use of above factor for estimation of fuelwood supply in Nepal, about 10 million tons of fuelwood was found deficit in the country. Deficit situation is most severe in the Terai region where sustainable supply can only meet about 19% of the total fuelwood demand. Fuelwood demand, in terms of volume, in the Terai region is very high compared to other region. The reasons being a larger population and higher economic activities in the areas. It clearly indicates that the fuel wood requirement in the Terai as well as in other densely populated regions are being met by over-cutting of tree resources than the sustainable supply limit of both forests as well as on-farm areas. Hills and Mountain region are able to meet their fuelwood demand of by about 57% and 78% respectively. In all three physiographic regions, contribution of off farm areas is quite high in supplying the fuelwood; however their contribution varies greatly from one region to another. Estimation of supply demand situation of fuelwood in the country is a huge task. This report has estimated both supply and demand figures with some assumptions however, situations could be influenced by various factors and such factors could be highly dynamic. Therefore, the estimated figures could vary greatly from one situation to another and from one year to another as well. Hence, this figure can be taken as an indicative one, which can be mostly used for planning and policy level decision making. Like in the physiographic regions, all development regions are also facing a similar problem in balance situation. CDR exists in highly imbalance situation followed by WDR, MWDR, FWDR and EDR respectively. Deficit fuel wood ranges from 1107 thousand tons in EDR to 3591 thousand tons in CDR. Once the supply is found less than its demand, then users start to change their strategy in energy resource use. High imbalance situation in Terai region may indicate high use of agricultural residues and animal waste as well as biogas technology.


Table 3.5 Fuelwood Balance in Nepal, 2003/04 Unit in 000 tons Physiographic Region Development Region Sources Terai Hills Mountain FWDR MWDR WDR CDR EDR Total

Off-Farm Supply 844 2935 1565 924 1152 651 1228 1388 5343 On Farm Supply 461 564 110 127 193 245 261 308 1135 Total Supply 1305 3499 1675 1051 1344 896 1489 1696 6478 Total Demand 7889 6562 2318 2293 3023 3570 5080 2803 16769

Balance -6584 -3063 -643 -1242 -1679

-2674 -3591

-1107 -10291

Source: Estimates and projection The highly imbalanced situation, especially due to the higher consumption than sustainable supply found in Nepal, could mean higher estimate for demand or lower estimate for supply or both. If shortage takes place, this will not mean that the consumption will exceed the supply, but this could indicate a lower consumption than it would normally be. On the other hand, if the supply is more, then consumption would be close to potential supply as well. Once the consumers face the fuel wood scarcity situation, they start to respond to it in several ways. For example, when users need to spend more time and money on fuel wood, they will try to use less by minimizing wastes, using better devices, changing habits and operational practices or switching to other fuel (Heap et al, 1993).

2.1.2 Charcoal Supply Charcoal also is a form of wood fuel which is directly derived from the burning of wood components. Its business in Nepal is still illegal and no one legally produce charcoal for commercial purpose. Some sort of illegal trade of charcoal can be found between traditional producer and commercial/industrial users at small scale. Charcoal production at industrial scale doesn't exist until now though some efforts were made to produce it at small-scale business to promote commercial charcoal production by some forestry development project in the past. Charcoal uses in Nepal are found since immemorial. Its uses are generally found in commercial sector mostly in restaurant, goldsmiths, blacksmiths, metal crafters and clay producers. Industry is the second largest area of charcoal consuming in Nepal. Some amount of charcoal is also used in the residential sector particularly for space heating. Lack of data regarding the consumption of charcoal particularly in the residential sector has become a problem because households generally do not report this type of fuel source. The importance of charcoal is quite high in the present context since the transportation of fuel wood in the city centers from the distance parts of the country is very expensive more than the cost of carrying the energy value from charcoal. However, charcoal supply practices in Nepal are very limited and illegal. Whatever charcoal is presently available in local urban shops, particularly in the Kathmandu valley has been brought illegally mainly


by the rural inhabitants of the surrounding hills. On the other hand, the quality of such charcoal is also very poor. In the past, the Sagarnath Forestry Development Project and the Fuel Wood Corporation had tried to produce charcoal commercially in an experimental basis. Fuel Wood Corporation attempted to produce charcoal in the Bardia District during 1985/86 using traditional methods of carbonization using the hardwood waste generated from forest harvesting and logging. It produced about 1000 tons of charcoal over a three months period but stopped the production due to marketing problem. Sagarnath Project also tried to produce charcoal from logging waste such as stumps, lops and tops etc. in the project area. However, it was not successful due to variety of reasons, one of which was the difficulty in product marketing.

2.1.3 Agricultural Residue The third largest indigenous biomass source of energy is agricultural residues in Nepal which directly come from the agricultural crops. Two types of residues are generally considered for energy purpose, one is field residue generated during the crop harvesting and another is process residue derived as the bi product during the agro processing. Residues collected at the field just after harvesting the main crops are named with field residues. Residues coming from agro-processing are called process residues such as rice husk, maize cob, wheat barn etc. This report is confined only to the estimates of the field residue. Report also considers only the major crop types of the country for residues production estimation. Technical potential of agricultural residue production in Nepal is presented in table 2.6 Table 2.6: Potential production of Agricultural Residue, 2003/04

Unit in 000 tons Crop type Theoretical Potential Technical Potential Contribution of crop types Grain legumes 452 226 1.5% Jute 11 11 0.1% Maize 6732 6287 41.2% Oil seed 409 205 1.3% Paddy 8062 5121 33.6% Sugarcane 1245 1245 8.2% Wheat 2556 2168 14.2% Grand Total 19468 15263 100.0%

Sources: 1. Crop production data from MOAC (2004) report on Statistical Information on Nepalese Agriculture. 2. Residue to Product Ratio (RPR) factor from WECS (2000) report on Estimation of Agricultural and

Animal Waste in Nepal. 3. Theoretical and Technical potential of crop waste is estimated figure based on above mentioned reports. Supply potential of agricultural residues is estimated at 19.5 million tons for the year 2003/04 in Nepal. This amount is equivalent to 244 million GJ in terms of energy that becomes about 67% of the total energy consumption for the same year. It is therefore indicative that more than two thirds of the total energy requirement of the country can be


supplied solely from agricultural residues while considering the heating value of the resources. This report also considers the fodder ratio of the agricultural residues. The technical supply potential of agricultural residue is 15.2 million tons, nearly 80% of the total potential, while considering the fodder ratio of the crop residues which will not be available for energy. These estimates were made from different sources specially the WECS (2000) report on Estimation of Agricultural Residues and Animal Waste in Nepal, and the paper on Agricultural and Forest Residues: Generation, Utilization and Availability (Koopmans and Koppejan, 1997). Residue-to-Product-Ratios (RPR) values have been used with care while assessing the resource potential for crop residues. Actual values of RPR vary widely depending on local conditions, crop species and moisture content. Generated residues may not be available for energy purpose because they may be already in use for other purposes such as fodder and compost manure or they may be too far away from the potential users. Residue to Product Ratio (RPR) and fodder to crop ratio (FCR) of major crop types are different. Fodder to crop ratio of paddy crop is very high compared to other crop types. It is because paddy stalk is the major feed source for domestic animals in Nepal. And this fodder ratio can vary from place to place and time to time as well. Jute has been considered as the zero value of fodder for domestic animals while estimating the crop residues. Because of lack of data, the fodder ratio of oil seed crops and grain legume is assumed to be equal to the half of its RPR value. Supply Potential of Agricultural Residue by Development Region Figure 2.3 shows how the supply potential of agricultural residues varies from one development region to another. This comparison is important in Nepal to show how the level of economic activities affect in biomass energy consumption and supply as well. Largest amount of residue is produced in the CDR followed by EDR, WDR, MWDR and FWDR respectively. This is also proportional to the size of agricultural land in each region. Composition of residue production by crop types varies from one region to another. Production of maize and paddy residue occupies more than three forth of the total potential and contribution from maize alone is more than 40% in all regions. Paddy and maize crops are therefore not only important from food security point of view but also important from energy security perspective.


Figure 2.3: Supply Potential of Agricultural Residues in Various Development Regions, 2004

0.0%

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35.0%

Development regions

Prop

ortio

n of

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duct

ion

by c

rops

Wheat 4.8% 2.5% 1.6% 2.3% 3.0%

Sugarcane 3.7% 0.7% 1.0% 0.3% 2.5%

Paddy 10.2% 11.1% 2.7% 3.2% 6.3%

Oil seed 0.5% 0.2% 0.2% 0.3% 0.2%

Maize 12.2% 10.0% 2.0% 7.1% 10.0%

Jute 0.0% 0.1% 0.0% 0.0% 0.0%

Grain legumes 0.6% 0.3% 0.1% 0.3% 0.2%

CDR EDR FWDR MWDR WDR

Total Potential Supply = 15.26 million tones Source: Estimates Residue Production by Physiographic Region Terai is the basket of food production in Nepal. This region is rich in both productivity and accessibility terms. Figure 2.4 shows the potential of crop residue production by physiographic regions. More than half of the residue production comes from Terai alone and contribution of Mountain region is very low in this regard. This ratio seems to be very similar to the distribution of population by physiographic region. Around 80% of the residues in Hills and Mountain region come from maize, while paddy is the largest source of residue in Terai. Supply potential alone does not tell much if the intervention is necessary to manage this resource for multiple uses. Supply-Demand Balance of Agricultural Residue About 1.1 million tons of agricultural residues are recently being consumed in residential and industrial sector for energy purpose. This is only about 5% of the total potential without considering the fodder value. Therefore, there seems huge potentiality of using agricultural residues for energy use. However, alternative use of residues has to be taken care of because they are mostly used for fodder and compost manure preparation which are the pillars of subsistence agriculture in Nepal.


Agricultural residues are among the poorest form of energy and people therefore don't use it until woody forms of biomass, especially the fuel woods are available. These resources are often used together with other woody form of biomass in the same energy using devices mostly as an igniting agent. Figure 2.4: Supply Potential of Residue by Physiographic Region, 2004

0.0%

10.0%

20.0%

30.0%

40.0%

50.0%

60.0%

Wheat 4.6% 0.8% 8.9%

Sugarcane 0.1% 0.0% 8.0%

Paddy 7.5% 0.9% 25.2%

Oil seed 0.3% 0.0% 1.0%

Maize 28.3% 4.0% 8.9%

Jute 0.0% 0.0% 0.1%

Grain legumes 0.3% 0.0% 1.1%

Hills MNT Terai

Total Potential Supply = 15.26 million tones Source: 1. Crop production data from MOAC (2005) report on Statistical Information on Nepalese Agriculture. 2. Residue to Product Ratio (RPR) factor from WECS (2000) report on Estimation of Agricultural residues

and Animal Waste in Nepal. 3. Theoretical and Technical potential of crop waste production are estimated based on above mentioned

reports.

2.1.4 Animal Waste Animal waste particularly dung is not only the second largest source of indigenous energy but it also occupies the second largest position in consumption terms. Dung cakes are the poorest form of energy and are regarded as the energy of the poor. However, if animal waste in the form of dung is used in a biogas plant, it turns into a clean form of energy without any adverse effects to the environment and agricultural production. Here only the supply potential of animal waste as the dung cake is estimated, though it is possible to estimate the potential supply of dung for biogas generation which has been already going popularity in Nepal. People mix animal dung with small pieces of agricultural waste and woody biomass to make dry and rigid form of dung cakes. This form of dung cake is common in the rural


parts of the Terai region where natural forest does not exist in nearby areas. Like agricultural residues, it also has multiple implications in rural livelihood. Table 2.7: Supply Potential of Animal Waste, 2004/05

Unit in 000 tons Animal Population Dung production in Tonne (dry)

Cattles Buffoloes Cattles Buffoloes TotalMountains 209688 112581 230656.8 151984.35 382641.15 229585 0 0Hill 721649 336806 793813.9 454688.1 1248502 749101 0.5 374551Terai 1001423 452595 1101565.3 611003.25 1712568.6 1027541 1 1027541Total 1932760 901982 2126036 1217675.7 3343711.7 2006227 1402091.7Mountains 202863 99385 223149.3 134169.75 357319.05 214391 0 0Hill 729052 561347 801957.2 757818.45 1559775.7 935865 0.5 467933Terai 675398 379959 742937.8 512944.65 1255882.5 753529 1 753529Total 1607313 1040691 1768044.3 1404932.9 3172977.2 1903786 1221462.2Mountains 10541 82 11595.1 110.7 11705.8 7023 0 0Hill 780166 850739 858182.6 1148497.7 2006680.3 1204008 0.5 602004Terai 434737 260375 478210.7 351506.25 829716.95 497830 1 497830Total 1225444 1111196 1347988.4 1500114.6 2848103 1708862 1099834.2Mountains 201436 31183 221579.6 42097.05 263676.65 158206 0 0Hill 691159 277872 760274.9 375127.2 1135402.1 681241 0.5 340621Terai 400405 243088 440445.5 328168.8 768614.3 461169 1 461169Total 1293000 552143 1422300 745393.05 2167693.1 1300616 801789.21Mountains 243995 106325 268394.5 143538.75 411933.25 247160 0 0Hill 344522 173731 378974.2 234536.85 613511.05 368107 0.5 184053Terai 347429 195395 382171.9 263783.25 645955.15 387573 1 387573Total 935946 475451 1029540.6 641858.85 1671399.5 1002840 571626.41Mountains 868523 349556 955375.3 471900.6 1427275.9 856366 0 0Hill 3266548 2200495 3593202.8 2970668.3 6563871.1 3938323 0.5 1969161Terai 2859392 1531412 3145331.2 2067406.2 5212737.4 3127642 1 3127642Total 6994463 4081463 7693909.3 5509975.1 13203884 7922331 5096803.8

FWDR

Nepal

Dung for Fuel in tonnes

EDR

CDR

WDR

MWDR

Dev. Reg. Phy. Reg.

Dung Collection in Tonnes @

60%

Availabilty as

Energy

Sources: 1. Animal number data from MOAC (2005) report on Statistical Information on Nepalese Agriculture. 2. Dung production from per unit of animal per year data from WECS (1997) report. 3. Potential production of animal waste is estimated figure based on above mentioned reports. Table 2.7 shows the total supply potential of animal waste for the year 2004/05 that can be used either in the form of dung cake to produce energy or in the form of compost manure to use in agriculture land. Figure 2.5 presents the proportional distribution of dung production by development and physiographic region. Contribution of buffalo and cattle in the total potential of dry dung cake production was about 45% and 55% respectively for the same year. The potentiality of producing biogas is about 1.9 million plants out of which 57% in terai, 43% in hills and mountains. The Biogas Support Programme (BSP) under the Alternative Energy Promotion Center and with the cooperation from various donors like SNV and KfW is promoting the installation of biogas plant in various part of the country.


Figure 2.5: Supply Assessment of Animal Dung, 2004

0%

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30%

Con

trib

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n in

per

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age

Development regions

Terai 9% 13% 5% 6% 6%

MNT 3% 3% 3% 2% 0%

Hills 11% 9% 5% 9% 15%

CDR EDR FWDR MWDR WDR

Total Potential Supply = 8.12 million tones

About 24% of the total energy requirement of the country can be met by animal dung alone if used only for energy purpose. It is important to note here that about 20% of the total potential of dung production has already been used for energy purpose, which can be a matter of serious concern for subsistence agricultural system of rural Nepal because subsistence oriented farming system of Nepal heavily depends on animal dung for agricultural productivity.

2.2 Commercial Energy Commercial energy sources in use are petroleum fuels (kerosene, LPG, motor spirit, diesel, aviation fuel and fuel oil), coal and electricity. Of these only hydro-electricity is indigenously produced.

2.2.1 Hydropower Resources Nepal is a country with enormous water resources. It is estimated that the rivers flowing from Nepal contribute about 71% of the dry season flow and 41% of the total annual average flow of the Ganges. The annual average run-off within the Nepalese territory is estimated at 174 billion cubic meters. The change in elevation from the high Himalayas in the North to the plains in the South over a short width of 150 to 230 km generates substantial hydraulic head for development of hydropower. Hydropower in Nepal is used in two forms – mechanical and electrical. The practice of using hydropower in the form of mechanical energy through traditional water wheels (locally called Ghattas) goes back to time immemorial.


Nepal's hydropower potential has been estimated at 83,000 MW based on average river flow (Shrestha, H.M., 1966). The details are shown in Table 2.8. A number of studies aimed at gathering the knowledge of potential endowment of the resources have been carried out (Shrestha, H.M., 1966, 1994, WRSF, 2002). The studies conducted so far have identified 122 projects. Among these projects there are 27 projects, which could be developed with storage reservoirs for multipurpose use for hydropower, irrigation, flood control and inland navigation. The total potential in terms of installed capacity and annual energy of these identified projects are respectively 43,000 MW and 180,000 GWh. Of these projects, 23 projects have already been studied at least to pre-feasibility level. These feasible projects have total installed capacity of 14,740 MW and can produce 43,000 GWh of energy per year. Hydropower utilization is currently about 1.5% of the proven potential. The total installed electricity generation is about 613.5 MW out of which hydroelectric generation capacity is around 557 MW. Of this total generation of electricity, 603 MW are hooked to the national grid, and the remaining are in isolated system comprising 40 small/mini hydro plants, about 2000 micro-hydro and about 1200 peltric sets serving remote areas of the country. Table 2.8: Theoretical Hydropower potential (in 1000 MW) River Basin Major River with catchments

area above 1000 sq. km. Small River courses with small catchments area

Total

Sapta Koshi 18.75 3.6 22.35 Sapta Gandaki 17.95 2.7 20.65 Karnali& Mahakali 32.68 3.5 36.18 Southern Rivers 3.07 1.04 4.11 Total 72.45 10.84 83.29 Source: Shrestha, H.M., 1966 There are provisions of power exchange between Nepal and India through specified points along the border and in quantities limited in accordance with Power Exchange Agreements between Nepal and India. The maximum quantity under the terms of the Agreement has been currently set at 150 MW.

2.2.2 Petroleum, Natural Gas and Coal Though lot of exploration works had been carried out, no proven reserves of petroleum suitable for commercial exploitation have been found in Nepal. All the petroleum products consumed in Nepal are imported from India or overseas in the refined form for direct consumption. Nepal Oil Corporation (NOC) is the sole organization responsible for the import and distribution of petroleum products. The NOC has the storage facility for all the essential petroleum fuel, except for the LPG. LPG is bottled and distributed by the private companies around all the parts of the country. Fig 2.6 provides the historical trend of petroleum fuel imported from India and abroad. Exploration work has found out three potential sites for natural gas in Kathmandu Valley. 47.6 million m3 of proven reserve have only been identified in one of the sites and further explorations are being carried out to prove the deposits in other two. So far the probable reserves identified in these two deposits are around 270 million m3. These deposits if commercially extracted will not be sufficient to last for a few decades.


Fig 2.6: Import of Different Petroleum Fuel at Different Years

0

50,000

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250,000

300,000

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2050

/51

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Year

Import of Different Petroleum Products by yearData for 2062/63 provisional

MS (KL) Deisel (KL) Kerosene (KL) LPG (MT) ATF (KL)

Source: Nepal Oil Corporation There are some small occurrence of coal and lignite in Nepal, which are not commercially attractive. The occurrences of coal can be classified in to four major categories: Quaternary lignite of Kathmandu Valley Coal from Dang (Eocene coal from Mid-Western Nepal) Siwalik coal Gondwana coal Out of these four types identified, the Quaternary lignite deposit of the Kathmandu Valley and coal from Mid-Western Nepal are of some economic significance. The Siwalik coals though widely distributed throughout the Siwalik range of the country are by small and sporadic and have not been commercially exploited. Likewise the Gondwana coal from the east of Nepal is of low quality and small in size and is of no economic significance. There are some open pit mining practices in the Dang area for the extraction of lignitic coal. The primary production of this coal is about ten thousand tones, which are mainly used in the brick manufacturing industries. Also Nepal import from India through private organizations under the agreement with Coal India Limited. In the year 2004/05 Nepal imported about 280 thousand tons from India. Kathmandu alone consumes about 40% of the imported coal. It is mainly used in the industrial sector like cement, lime, and brick industries in Nepal. Fig 2.7 presents the time series status of coal production and import in Nepal.


Fig: 2.7: Sources of Coal from Different Source by Year.

Supply of Coal from different Sources by Year

0

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2050/51 2051/52 2052/53 2053/54 2054/55 2055/56 2056/57 2057/58 2058/59 2059/60 2060/61 2061/62 2062/63

Year

in 0

00 M

t

Primary Production Import Total

Source: Department of Customs and Department of Mines and Geology.

2.3 Alternate Energy Resources The country’s economy does not provide enough economic bases for large scale investment for the exploitation of hydro potentials and laying transmission and distribution network in the rural areas in the immediate future. Alternative energy like, solar, microhydro, wind and biogas can play a catalyst in rural development by providing modern form of energy. It can effectively;

help in reducing drudgery of the rural population, especially the women and the children by cutting down the time required to collect and use traditional form of energy and can also reduce the indoor air pollution.

Combat the environmental implications of GHG reduction, forest depletion, etc. Save convertible currency by substituting imported fossil fuels. Be exploited at different scales and sizes to suit the local needs. Provide modern forms of energy like electricity even in the remote locations.

2.3.1 Solar Nepal, being located in favorable latitude, receives ample solar radiation. The average solar radiation varies from 3.6 –6.2 kWh/m2/day, and the sun shines for about 300 days a year. The development of solar energy technology is thus reasonably favorable in many parts of the country. Average daily insolation in Nepal in kWh/m2 is given in the Table 2.9 for six different locations.


Table 2.9: Average daily Insolation in some location of Nepal in kWh/m2 Location Jan Feb Mar Apr May June Jul Aug Sep Oct Nov Dec Avg. Dadeldhura 3.35 4.14 4.88 5.82 6.04 4.63 4.0 3.90 4.04 4.26 3.79 3.28 4.34 Dhangadi 3.79 4.6 5.56 6.52 6.64 4.99 5.91 4.72 4.12 4.40 4.19 3.70 4.93 Pokhara 3.55 4.34 5.08 5.56 4.99 4.36 4.18 3.90 4.07 4.15 3.93 3.48 4.3 Butwal 3.81 4.69 5.52 6.32 6.33 4.79 4.72 4.37 4.04 4.42 4.14 3.71 4.73 Taplejung 3.7 4.34 4.84 5.41 5.41 4.04 3.99 3.85 3.88 4.02 3.94 3.57 4.24 Biratnagar 4.0 4.79 5.69 6.22 6.08 5.08 4.65 4.61 4.44 4.63 4.29 3.82 4.86 Source: Adapted from Peter Ahm, Paper presented on RETRUD, 1998 Similar data are available for about 35 locations providing adequate basis for design of solar technology applications. These figures also emphasize high solar energy potential and possibilities of development of solar energy technology. Solar Passive Collectors Solar energy is traditionally used for drying crops, clothes, fuelwood, crop residues etc. The technological interventions started only in the sixties with the production of domestic solar water heaters. The use of solar water heaters are mainly in the urban centers and in the trekking route. It is mainly clustered in the Kathmandu Valley. Till 2005, there are around 61,000 solar water heaters installed in the country. Solar Photovoltaic Systems The use of solar photovoltaic is increasing rapidly in the country after the provision of subsidy by the Government of Nepal. This technology for electricity generation has been widely used for in households, telecommunications, airports etc. Table 2.10 gives the status of Solar home systems installed at different years. Also the fig. 2.8 illustrates the growth pattern of Solar home systems.

Table 2.10: Status of Solar Home System in Nepal

Sl. No. Year Nos. of

InstallationsCummulative Nos.

Installed Capacity KWp

Cummalitive Capacity KWp

1 1992 8 8 0.3 0.3 2 1993 89 97 3.3 3.6 3 1994 36 133 1.2 4.8 4 1995 149 282 4.9 9.7 5 1996 562 844 20.4 30.1 6 1997 736 1580 27.4 57.5 7 1998 1899 3479 68.3 125.8 8 1999 2715 6194 97.4 223.2 9 2000 6082 12276 237 460.2

10 2001 13676 25952 540.2 1000.4 11 2002 18330 44282 584.2 1584.6 12 2003 13584 57866 516.192 2100.792 13 2004 17107 74973 650.066 2750.858 14 2005 15199 90172 577.562 3328.42

Source: AEPC, CADEC, 2004 and Piya, 2006


Fig: 2.8: Growth pattern of Solar home system

Nos. of Solar Home System and Capacity

0

20000

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1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005

year

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Cummulative Nos.

Cummalitive Capacity KWp

There are around 30 registered Solar PV companies operating for the dissemination of SHS with hundreds of branch offices in the various district and rural areas of Nepal.

2.3.2 Wind Wind is still unharnessed energy resource in Nepal. Due to its diverse topography and the consequent variation in the meteorological conditions, it is difficult to generalize wind conditions in the country. Specific areas have been identified as a favorable for viable wind energy generation. Studies made for the World Bank in 1977 indicate that in the Khumbu area, average wind speed obtainable for wind energy generation is over 5 m/s. The Department of Hydrology and Meteorology (DHM) conducted a study in 1983 and recorded wind speed data for a number of stations. The conclusion drawn by DHM indicates that wind could be used for electricity generation in the hills and for irrigation and pumping of drinking water in the Terai. The study by DANGRID, a Danish consulting firm in 1992 reported that a potential to generate 200 MW of electrical power with an annual energy production of 500 GWh from the wind resources along the 12 km valley between Kagbeni and Chusang in Mustang District of Nepal. This is about 33% of the present electricity production of Nepal. WECS along with DHM, Alternative Energy Promotion Center (AEPC) and Royal Nepal Academy of Science and Technology (RONAST) carried out study on the Potential of Wind Resources in Nepal in the year 1999-2002. Some data of the study on wind speed are given on the table 2.11 (source: WECS, 2002). This result shows that there is not high potentiality of wind energy in Nepal except for some location like Thakmarpha, Khumbu and Khanjiroba, which are again on the high mountainous location and is with no infrastructural development.


Table 2.11: Wind Speed Data for some location of Nepal in m/s Station Jan. Feb. Mar. Apr. May June July Aug. Sept. Oct. Nov. Dec. Annual Dadeldhura 2.08 2.28 2.48 2.55 2.66 2.19 1.94 1.81 1.81 2.00 1.87 1.91 2.13 Mahendra Nagar 0.43 0.57 0.74 1.00 0.99 0.87 0.75 0.59 0.45 0.39 0.37 0.40 0.63 Dhangadhi 0.61 0.75 1.01 1.26 1.43 1.37 1.04 0.80 0.63 0.47 0.48 0.47 0.86 Dipayal 0.26 0.41 0.65 0.84 0.99 0.92 0.70 0.44 0.47 0.54 0.41 0.24 0.57 Jumla 1.24 1.56 1.82 1.89 2.15 2.38 1.91 1.58 1.59 1.86 1.67 1.33 1.75 Pusma Camp 0.89 1.17 1.57 1.92 1.89 1.19 0.62 0.56 0.66 0.82 0.80 0.78 1.07 Chisapani 2.39 2.38 2.62 2.82 2.44 1.76 1.09 1.09 1.29 1.77 2.29 2.55 2.04 Surkhet 0.97 1.21 1.38 1.56 1.57 1.33 0.97 0.78 0.70 0.79 0.73 0.78 1.06 Nepalganj 0.51 0.82 1.08 1.42 1.69 1.62 1.37 1.07 0.80 0.52 0.43 0.50 0.99 Sikta 0.45 0.55 0.88 1.18 1.39 1.01 0.46 0.20 0.35 0.36 0.24 0.28 0.61 Thakmarpha 4.48 4.75 4.53 4.20 4.41 5.00 4.91 4.72 4.33 3.93 3.93 4.16 4.45 Mustang 1.54 1.93 1.57 1.78 1.76 1.85 1.65 1.48 1.59 1.39 1.27 1.62 1.62 Dumkauli 0.18 0.53 0.77 0.96 0.73 0.49 0.28 0.17 0.14 0.12 0.15 0.14 0.39 Bhairahawa 0.50 0.65 0.94 1.49 1.73 1.60 1.52 1.27 0.92 0.53 0.45 0.43 1.00 Parasi 1.53 1.78 2.36 3.49 4.03 4.38 3.68 3.06 2.33 1.22 0.99 1.04 2.49 Khanchikot 2.08 2.38 2.93 3.09 2.72 2.37 2.03 1.77 1.93 1.82 1.85 1.93 2.24 Simari 0.65 0.80 1.10 1.63 1.65 1.46 1.38 1.07 0.98 0.58 0.44 0.50 1.02 Pokhara 0.59 0.83 1.03 1.07 0.93 0.73 0.68 0.64 0.61 0.54 0.53 0.50 0.72 Gorkha 0.64 0.83 0.95 1.10 0.96 0.65 0.54 0.59 0.63 0.64 0.65 0.71 0.74 Malepatan 0.39 0.48 0.60 0.57 0.48 0.39 0.31 0.31 0.33 0.29 0.25 0.26 0.39 Lumle 1.19 1.27 1.40 1.36 1.34 1.24 1.20 1.16 1.15 1.15 1.13 1.15 1.23 Khairini Tar 0.38 0.51 0.66 0.76 0.76 0.67 0.54 0.49 0.44 0.39 0.34 0.33 0.52 Rampur 0.46 0.66 0.93 1.19 1.17 0.98 0.80 0.77 0.70 0.48 0.33 0.37 0.74 Parwanipur 0.71 0.97 1.27 1.70 1.83 1.65 1.55 1.32 1.17 0.73 0.57 0.55 1.17 Kakani 1.43 1.71 1.98 1.97 1.95 1.65 1.69 1.61 1.41 1.28 1.25 1.28 1.60 Khumultar 1.00 1.24 1.35 1.36 1.43 1.37 1.31 1.19 1.12 1.04 0.93 0.88 1.19 Kathmandu 0.44 0.67 0.85 0.86 0.87 0.68 0.54 0.46 0.39 0.35 0.30 0.30 0.56 Panchkhal 0.36 0.51 0.63 0.68 0.65 0.53 0.42 0.39 0.33 0.33 0.29 0.28 0.45 Nagarkot 2.31 2.86 3.25 3.30 2.89 2.49 2.06 1.91 2.17 2.03 1.83 1.81 2.41 Jiri 0.77 0.86 0.87 0.95 0.84 0.52 0.36 0.35 0.48 0.81 0.85 0.78 0.70 Hardinath 0.86 1.13 1.53 2.50 2.91 2.87 2.69 2.34 1.84 0.99 0.74 0.70 1.76 Okhaldhunga 1.70 2.47 3.13 3.66 2.91 2.18 1.76 1.70 1.67 1.51 1.50 1.50 2.14 Lahan 0.59 0.84 1.27 1.78 2.05 1.87 1.63 1.39 1.12 0.56 0.43 0.44 1.16 Chialsa 1.42 1.85 1.87 1.91 1.44 1.04 0.80 0.86 0.80 0.99 1.05 1.17 1.27 Pakhribas 1.59 1.62 1.90 2.03 1.78 1.50 1.27 1.32 0.94 1.41 1.62 1.45 1.54 Dhankuta 1.80 2.00 2.01 2.03 1.94 1.93 1.79 1.80 1.76 1.71 1.71 1.69 1.85 Biratnagar 0.53 0.82 1.23 1.74 1.89 1.71 1.38 1.12 0.89 0.49 0.37 0.39 1.05 Tarahara 0.92 1.14 1.54 2.16 2.20 2.08 2.07 1.77 1.55 1.04 0.93 0.88 1.52 Bhojpur 0.72 0.84 0.97 0.96 0.76 0.57 0.45 0.51 0.53 0.64 0.69 0.69 0.70 Taplejung 1.02 1.17 1.23 1.21 1.05 0.85 0.65 0.62 0.68 0.95 0.93 0.90 0.94 Ilam Tea Estate 0.92 0.97 1.28 1.54 1.30 1.06 0.73 0.68 0.67 0.84 0.98 0.92 0.99 Kankai 0.42 0.57 0.74 0.96 0.79 0.71 0.64 0.57 0.52 0.36 0.30 0.31 0.57 Kanjiroba 4.95 5.00 4.65 4.55 2.35 2.25 1.70 0.70 2.10 2.70 1.10 5.10 3.10 Annapurna 3.16 3.18 3.08 3.06 3.14 2.82 2.78 1.99 2.52 2.79 3.00 3.10 2.88 Langtang 2.90 3.16 3.20 3.30 3.40 2.94 2.76 2.40 2.57 3.23 2.94 2.80 2.97 Khumbu 4.77 4.65 5.17 5.53 5.60 4.70 4.47 4.04 5.03 4.25 4.57 4.47 4.77

Source: WECS 2002


2.3.3 Biogas Biogas is a methane rich gas produced by the digestion of animal, human and bio-solid waste. In Nepal it is the animal waste mainly used for the biogas production. In some places the plants are integrated with toilets for the production of biogas. The digesters, where the animal wastes are digested anaerobically, is either fixed dome type or floating drum type. The fixed dome model has become popular as they are easier to construct, operate and maintain using indigenous raw materials. The potentiality of producing biogas is about 1.9 million plants out of which 57% in terai, 43% in hills and mountains. The Biogas Support Programme (BSP) under the Alternative Energy Promotion Center and with the cooperation from various donors like SNV and KfW is promoting the installation of biogas plant in various part of the country. There are about 140, 519 biogas plants installed in various districts of Nepal. Also there are about 60 private biogas companies and 15 biogas appliances manufacturing workshops in the country for the effective dissemination of this technology in Nepal. Also the biogas program is developed as the first CDM project in Nepal.

2.3.4 Micro- Hydro The hydro power stations for generation of mechanical and electrical energy up to a capacity of 100 kW come under microhydro in Nepal. The installations of such units do not require nay license from the Government. In fact, the Government of Nepal has delicensed installation of hydropower plants up to 1000 kW. The Government of Nepal is providing subsidies for the installation of microhydro plant according to the location and remoteness of the districts of Nepal. Till 2005, there are about 1541 microhydro (including picohydro) electrification schemes installed in various part of the country with the total installed capacity of about 8.5MW. Also there are similar numbers of unit for mechanical power generation for the milling purpose in the country. Table 2.12 provides the details about the installation and the capacity of microhydro electrification unit for different years.


Table 2.12: Microhydro electrification units installed capacity Classification of Schemes

Pico-hydro Micro-hydro (up to 3 kW) (3 - 100 kW) Total Cumulative Total Year of

Installation No. kW No. kW No. kW No. kW 2005* 36 72.9 31 512.6 67 585.5 1541 8583.82

2004 66 140.85 35 420.75 53 316.4 1474 7998.32 2003 80 184.32 53 749.5 133 933.82 1421 7681.92

2002 61 140.5 34 364.5 95 505 1288 6748.1

2001 36 81.2 50 891 86 972.2 1193 6243.1 2000 112 213.45 40 719.5 152 932.95 1107 5270.9

1999 123 226.4 25 386.5 148 612.9 955 4337.95

1998 97 185 28 430.5 125 615.5 807 3725.05 1997 84 143.4 16 262.7 100 406.1 682 3109.55

1996 130 203.3 14 174.2 144 377.5 582 2703.45

1995 115 170.9 13 145.3 128 316.2 438 2325.95 1994 79 100.3 5 125.7 84 226 310 2009.75

1993 - - 3 26.5 3 26.5 226 1783.75

1992 13 12 6 106.5 19 118.5 223 1757.25 1991 46 43 7 125.1 53 168.1 204 1638.75

1990 - - 11 97.8 11 97.8 151 1470.65

1989 - - 17 183 17 183 140 1372.85 1988 - - 11 109.8 11 109.8 123 1189.85

1987 - - 17 190.5 17 190.5 112 1080.05

1986 - - 20 203.8 20 203.8 95 889.55 1985 - - 16 168.8 16 168.8 75 685.75

1962-1984 - - 52 424.65 52 424.65 59 516.95

before - - 7 92.3 7 92.3 7 92.3 Source: CADEC, 2004 (fig for 2005 are provisional)


3. Energy Consumption Scenario

3.1 Consumption Pattern The overall energy consumption of Nepal is largely dominated by the use of traditional non commercial forms of energy such as fuelwood, agricultural residues and animal waste. But this share is in the decreasing trend. The share of traditional forms of energy to the energy consumption is estimated to about 88% in 2004/05 as compared to 91% percent in 1995. The remaining 12% of energy consumed is through commercial source (Petroleum fuels, Coal and Electricity) and Renewable. Table 3.1 shows the historical trend of energy consumption by fuel type and the percentage share for the year 1995 and 2005. It can be seen that though in the slow pace, there is a shift in the energy consumption pattern from traditional to the commercial and renewable sources. The share of commercial has increased from about 9% in 1995 to about 12% in 2005. Similarly there is a growing trend in the renewable. Within the commercial source, electricity is in the higher side in substituting other fuels. Table 3.1: Historical Trend of Energy Consumption by Fuel Type, in 000 GJ Fueltype 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005

Share % in 1995

Share % in 2005

Traditional 258212 263634 267138 272893 278748 284735 290859 302085 308606 315269 322105 91.14% 87.71%Fuelwood 230651 235495 237555 242687 247884 253199 258636 269158 274960 280888 286960 81.41% 78.14%

Agricultural residue 10354 10571 11645 11893 12166 12446 12732 13026 13327 13635 13964 3.65% 3.80%Animal dung 17207 17568 17937 18314 18698 19091 19492 19901 20319 20746 21181 6.07% 5.77%

Commercial 24784 27759 29440 32741 34851 44956 43344 43852 43271 44863 43195 8.75% 11.76%Petroleum 19119 21615 23623 26619 28180 30224 31286 32305 32116 31596 30063 6.75% 8.19%

LPG 643 916 1075 1131 1232 1508 1975 2401 2761 3257 3821 0.23% 1.04%Motor Spirit 1172 1380 1497 1572 1674 1862 1984 2119 2259 2276 2534 0.41% 0.69%

Air Turbine Fuel 1357 1469 1731 1860 2009 2056 2283 1716 1911 2316 2417 0.48% 0.66%Kerosene 6559 7568 8841 10226 10696 12006 11472 14018 12641 11271 8659 2.32% 2.36%

High Speed Diesel 8597 9501 9783 11402 11978 11780 12367 10857 11378 11369 11911 3.03% 3.24%Light Diesel Oil 149 174 78 38 21 156 134 94 24 23 3 0.05% 0.00%

Fuel Oil 406 341 320 54 189 428 588 578 554 421 -28 0.14% -0.01%Others 236 266 299 337 380 428 482 522 588 663 747 0.08% 0.20%

Coal 2839 3085 2540 2579 2893 10504 7446 6481 5721 7292 6459 1.00% 1.76%Electricity 2826 3059 3278 3542 3778 4227 4612 5066 5434 5974 6673 1.00% 1.82%

Renewables 319 435 561 705 856 1015 1217 1432 1665 1779 1955 0.11% 0.53%Biogas 298 412 536 678 826 981 1179 1392 1620 1731 1903 0.11% 0.52%

Micro Hydro 21 23 25 27 30 34 38 40 44 47 50 0.01% 0.01Solar 0 0 0 0 0 0 0 0 1 1 2 0.00% 0.0

Others 0 0 0 0 0 0 0 0 0 0 0 0.00% 0.0Grand Total 283315 291827 297139 306339 314454 330706 335421 347369 353542 361910 367255 100.00% 100.00%

%0%0%

Fig 3.1 and 3.2 indicates the percentage share of fuel source and fuel type respectively in the total energy consumption.


Fig 3.1: Energy Consumption by Source Type

Energy Consumption by Energy Source in 2004/05367 million GJ

87.71%

11.76% 0.53%

Traditional Commercial Renewables

Fig 3.2: Energy Consumption by Fuel Type

Energy Consumption By Fuel Type 2004/05Total Energy Consumption 367 million GJ

78.29%

3.25%

0.52%

0.01%

1.82% 1.76%2.36% 0.66%

0.69%

1.04%5.78%

3.81%

0.001%

Fuelwood Agricultural residue animal dung LPG Motor Spirit

Air Turbine Fuel Kerosene High Speed Diesel Coal Electricity

Biogas Micro Hydro Solar

The consumption of all the fuel types shows continues growth. Comapred to the three different sources, it is the commercial source that grew more rapidly compared to other sources. The fig 3.3 shows the different share of fuel types in the total energy consumption since 1995 to 2005.


Fig. 3.3: Energy Consumption Trend by Fuel Type

0

50000

100000

150000

200000

250000

300000

350000

400000

000

GJ

1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005

Year

Energy Consumption Trend by Fuel Type

Fuelw ood Agricultural residue animal dung Petroleum Coal Electricity Renew ables

3.2 Sectoral Energy Consumption The energy consuming sectors has been defined as per the economic sector of the country. They are residential, commercial, transport, industrial and agriculture sector. For the ease energy accounting, others have been included as energy consuming entity which does not fall in the above five sectors, are included in others like street light, temples, mosques, church etc.. The sectoral energy consumption pattern for the year 2004/05 has changed only marginally as compared to the previous years. Fig 3.4 shows the different share percentage of energy consumption by various sectors in 2004/05. The figure shows that the residential accounts for the major share of energy consumption (90.28%), followed by transport (3.78%), industry (3.48%), commercial (1.45%) and then the agricultural and others. WECS has been putting in effort in analyzing and maintaining data on sectoral energy consumption by fuel type and end use. Fig. 3.5 shows the historical trend of energy consumption by these sectors since 1995. It can be observed that share of residential sector in the total energy consumption is decreasing in the steady pace (table 3.2), while others sectors have a steady pace of increasing trend. In Nepal, due to inadequate nos. of energy intensive industries, Industrial sector come in the third position in the total energy consumption. Detailed break-down of energy consumption of fuel type for each sub sectors are discussed in the subsequent sections.


Fig. 3.4: Share of Sectoral Energy Consumption.

Sectoral Energy Consumption, 2004/05

90.28%

3.47%0.17% 0.84% 3.78% 1.45%

Residential Industrial Commercial Transport Agricultural Others

Fig.: 3.5 Historical Trend of Energy Consumption in Various Sectors

0

50000

100000

150000

200000

250000

300000

350000

400000

in 0

00 G

J

1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005

Year

Historical Trend of Energy Consumption in Various Sector

Agricultural

Transport

Commercial

Industrial

Residential


Table 3.2: Percentage share of Sectoral Energy Consumption at different years. Sector 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005Residential 92.11% 91.68% 92.33% 91.90% 91.53% 89.25% 89.78% 90.58% 90.59% 90.17% 90.28%Industrial 3.91% 4.03% 2.16% 2.26% 2.39% 4.75% 3.88% 3.61% 3.39% 3.79% 3.47%Commercial 0.90% 0.97% 1.07% 0.95% 1.02% 1.12% 1.23% 1.42% 1.48% 1.47% 1.45%Transport 2.77% 2.99% 4.02% 4.42% 4.72% 3.87% 4.05% 3.46% 3.59% 3.63% 3.78%Agricultural 0.23% 0.24% 0.33% 0.36% 0.23% 0.90% 0.94% 0.80% 0.82% 0.80% 0.84%Others 0.09% 0.09% 0.10% 0.10% 0.11% 0.11% 0.12% 0.13% 0.14% 0.15% 0.17%Grand total 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100%

3.2.1 Residential Sector Energy Consumption The residential sector consumes almost 90% of the total energy consumption of Nepal in 2004/05. This sector consumes about 331 million GJ in 2004/05. Biomass resources are the major fuels used in this sector, namely the fuelwood, agricultural residue and the animal waste. Recently renewable sources like biogas and electricity from micro-hydro and solar home systems are substituting the conventional fuels used mainly for cooking and lighting. The commercial sources of fuel used in nominal in amount and is mainly used in the urban centers. Fig. 3.6 presents the share of different fuels used in the residential sector in 2004/05. Fig.3.6: Share of Different Fuel Types in the Residential Sector.

Share of Different Fuel types in Residential Energy Consumption, 2004/05

331 millions GJ

84.77%

3.73%6.32%0.46%

0.64%0.01%

4.08%

Fuelwood Agricultural residueAnimal dung PetroleumCoal Electricity Renewables

Residential sector energy consumption is the function of number of household and population. The population growth rates as well as the economic situation of the household are used as the main driver for the types of fuel and energy consumption in the residential sector of Nepal. The trend of household energy consumption is presented in


the Annexes. In the residential sector, the energy used in mainly for different end-uses mainly, cooking, heating, animal feed preparation, lighting etc. It has been observed that the LPG is substituting as a cooking fuel in the urban centers as the consumption growth rate of LPG is about 11% per annum for the last few years followed by electricity with 8%. Though nominal in quantitative term of the renewable, the growth rate of solar is quite high with 52% followed by biogas and electricity from micro-hydro with 8% each. There is a very high decreasing trend in the use of kerosene in the residential sector. The overall growth rate of energy consumption in the residential sector is about 1.2% per annum.

3.2.2 Industrial Sector Energy Consumption The industrial sector share of energy consumption in about 3.5% of the total energy consumption in Nepal. The energy consumption has been increasing marginally during the last few years Since 1995 the industrial energy consumption has increased at the rate of 1% only. It is estimated that about 12.7 million GJ of energy is consumed in the industrial sector in 2004/05. Fig. 3.7 presents the share of different fuels used in the industrial sector. Fig. 3.7: Share of Different Fuels in the Industrial Sector

Share of different fuel Types in Industrial Energy Consumption, 2004/05,

12.7 millions GJ

6%12%

10%

50%

22%

Fuelw ood Agricultural residue Petroleum Coal Electricity

The energy intensity of the industrial sector is quite high as compared to other developing countries due to the fact that Nepal’s industries are mainly based upon the upon the traditional products and contribute little to the value added. Still this sector relies on the biomass fuels like fuelwood and agriculture residue. Fuelwood accounts for almost 50% of the energy consumed in this sector followed by electricity and petroleum products. The main end uses in the industrial sector are process heating, motive power, water boiling in the boilers and lighting.


3.2.3 Commercial Sector Energy Consumption Total energy consumed in the commercial sector, which includes schools, hotels, restaurants, government and non-government institutions etc. has increased from 2.5 million GJ in 1995 to 5.3 million GJ 2004/05 which shows an increase in 8% per annum. The main fuels used in the commercial sector are fuelwood, LPG, kerosene and electricity. The main end-uses of the commercial sector are quite similar to that of residential sector such as cooking, heating, lighting, cooling etc. Fig. 3.8 presents the different share of fuel types consumed in the commercial sector. It is seen that fuelwood accounts with the highest share of 39% followed by LPG (32%), Kerosene 22% and then the electricity with 7%. For the last few years, it has been seen that the LPG consumption growth rate in this sector is about 13%, while the growth rate of kerosene is in the decreasing trend. Fuelwood and electricity consumption growth rate is about 4% and 5% per annum respectively in this sector. The details breakdown of the energy consumption of the fuel type is presented in the Annexes. Fig. 3.8: Share of Different Fuels in the Commercial Sector

Share of different Fuels in Commercail Eenrgy Sector, 2004/05, 5.3 millions GJ

Fuelw ood 39%

LPG 32%

Kerosene22%

Electricity 7%

Fuelw ood LPG Kerosene Electricity

3.2.4 Transport Sector Energy Consumption The total energy consumption in the transport sector has been in the increasing trend. It has been seen that for the past few years the energy consumption growth rate in this sector is about 4% annually. The total energy consumption of this sector in the year 2004/05 is about 13.8 million GJ. Fig. 3.9 shows the consumption of different fuels in this sector during the year 2004/05. The details are presented in the Annexes. It can be seen that high speed diesel takes the highest share with 63% followed by Motor Spirit with 18% and then Air Turbine Fuel wit 17%. The contribution of LPG and electricity in this sector is very minimal.


It is seen for the last few years that though in quantitative term, LPG’s contribution is minimal; the growth trend is about 12% in this sector. Other fuels having high growth rate in this sector is ATF with 9% and Motor Spirit with 5%. Fig. 3.9: Share of Different Fuels in the Transport Sector

Share of Different Fuels in Transport Sector Energy Consumption, 2004/05

13.8 million GJ

Motor Spirit 18.24%

Air Turbine Fuel 17.40%High Speed Diesel

63.40%

LPG 0.81%Electricity

0.15%

LPG Motor Spirit Air Turbine Fuel High Speed Diesel Electricity

3.2.5 Agriculture Sector Energy Consumption The total energy consumption in the agriculture sector is about 3million GJ in the year 2004/05. It is about 0.84% of the total energy consumption of the country in the same year. Fig. 3.10: Share of Different Fuels in the Agriculture Sector

Share of Different Fuels in Agriculture Sector Energy Consumption, 2004/05

3 million GJ

High Speed Diesel 94%

Electricity 6%


Though nominal in energy consumption, the growth rate is about 3% annually. The main fuels used in this sector are high speed diesel and electricity. Fig. 3.10 shows the share of different fuel types in the year 2004/05. Diesel accounts for 94% of the total energy used, while electricity is only 4%. Diesel is used for water pumping (irrigation) as well as for land preparation, harvesting etc. (tractors) and electricity is used for lift irrigation. Although, fertilizers, manure and animate power are essential inputs in the agriculture sector, they are not accounted in the national energy accounts due to the fact that the data are scarce and often it is debated whether they should be accounted as energy input.


4. Energy Imports and Exports Nepal imports petroleum products and coal to meet all of its fossil fuel demand. For coal, except some negligible amount of primary production of lignitic coal in the Dang district, India is the major source of coal supply. The petroleum products are purchased from international markets and transported and exchanged with India. Nepal import and export (exchange) electricity from and to India under the power purchase agreement between the two countries.

4.1 Petroleum Fuels Nepal Oil Corporation (NOC) is the sole authority for import and distribution of petroleum products in Nepal. Under the latest import arrangement, NOC purchases crude oil from the international market and delivers them to India. In exchange, Indian Oil Corporation supplies a proportionate ratio of necessary petroleum products from refineries and distribution channels close to the Nepalese border. Under this arrangement the Indian Oil Corporation levies service charges for the services rendered. The quantity of import of petroleum products imported is calculated on the basis of demand projected by Nepal Oil Corporation. NOC maintains storage of petroleum products at Biratnagar and Mahendranagar (Dhana\usa) for supply of Eastern Development Region; Amlekhgunj and Kathmandu for Central Development Region,; Bhalwari and Pokhara for supply of Western Development Region; Nepalgunj and Surkhet for Mid-Western Development Region; and Dhangadhi and Dipayal for supply in the Far-Western Development Region to maintain regular supply in the country. Nepal’s storage capacity for the petroleum products except for LPG is roughly for thirty days consumption. For LPG, the private gas companies distribute LPG from various stations which in total has the capacity of a week long storage only. Nepal imported about 685623 KL of major petroleum products in 2062 B.S which is about 8% less than the previous year. The past five years show a declining trend in the import of the petroleum products. This is due to the political instability and mainly due to the heavy loss incurred by NOC in the past few years. But the provision figures for 2063 B.S shows that there is slight increment in the import of the petroleum products. Table 4.1 shows the import of different types of petroleum fuel at different years.


Table 4.1: Historical trend of import of Petroleum products

Year MS (KL)

Diesel (KL)

Kerosene (KL)

LPG (MT)

ATF (KL)

Total Petroleum*

Increment %

2050/51 31,476 195,473 162,324 9,760 30,436 419,709 14%2051/52 35,019 228,016 176,963 13,049 37,886 477,884 15%2052/53 41,736 254,323 213,830 18,600 40,776 550,665 9%2053/54 46,621 259,358 244,546 21,824 48,722 599,247 15%2054/55 47,507 302,063 287,595 22,961 51,700 688,865 5%2055/56 51,584 319,158 298,351 25,019 56,010 725,103 9%2056/57 55,570 327,427 350,196 30,627 59,123 792,316 -1%2057/58 59,245 333,791 325,198 40,102 65,620 783,854 1%2058/59 63,578 287,657 390,113 48,757 47,274 788,622 -2%2059/60 68,482 301,672 351,696 56,079 53,546 775,396 -4%2060/61 67,965 302,644 313,127 66,142 64,394 748,130 -8%2061/62 76,097 308,076 233,310 77,594 68,340 685,823 2%2062/63 78,463 310,535 233,310 89,045 76,887 699,195 * Except for LPG

4.2 Coal Nepal has some sporadic deposits of low grade lignitic coal. A very negligible amount of the total coal supply is extracted in Dang District for consumption in the brick industries. For the major supply, the coal is imported from India and abroad. Nepal Coal Limited was the sole agency for the import of coal before 1993. After 1993, NCL become inactive and private enterprises came into existence for the import of coal. These enterprises make their own agreement with Coal India Limited or other Suppliers abroad and supply the coal to the market. These enterprises are entitled to fix their own prices for the coal. Table 4.2 shows the status of import and primary production of coal in Nepal for different years.

Table 4.2: Import and primary production of coal Year Primary

Production Import Total

2050/51 54.75 54.75 2051/52 113.04 113.04 2052/53 122.81 122.81 2053/54 101.10 101.10 2054/55 102.66 102.66 2055/56 10.95 104.22 115.18 2056/57 17.53 400.62 418.15 2057/58 16.59 279.84 296.43 2058/59 9.61 248.39 258.00 2059/60 11.85 215.91 227.76 2060/61 10.459 279.842 290.301 2061/62 9.26 247.88 257.14


Coal is mainly used in the Industrial sector in Nepal. Industries such as cement, lime and brick manufacturing depend on the imported coal. In addition, Steel Rolling Mills are the major consumer of coal.

4.3 Electricity With the agreement between Nepal and India, both the countries exchange electricity as per the need. The exchange points are located at various places in the border line. Though there is a provision in the agreement to exchange to about 150 MW of electrical power between the two neighbors, but due to lack of transmission facility, it is limited below 100 MW. The electricity imported from India along the points of exchange for the year 2005 (2061/62) is about 241 GWh whereas export to India is about 110 GWh. The table 4.3 below shows the quantity exchanged between the two countries since 1997. It can be seen that except for the year 2003, Nepal is the net importer of electricity. Table 4.3: Exchange of Electricity between Nepal and India

Category 1997 1998 1999 2000 2001 2002 2003 2004 2005* Export to India 100.22 67.41 64.16 95.00 126.00 133.86 192.25 141.24 110.70Import from India 153.98 210.29 232.39 232.20 226.54 238.29 149.88 186.68 241.39Net Import/Export 53.76 142.88 168.23 137.20 100.54 104.43 -42.37 130.6945.44


5. Energy Prices and Markets

5.1 Market Structure and Pricing Overview

In Nepal, though the economic structure is a free market economy, the market of the commercial energy sector is monopolistic in nature. The market and prices of the energy fuels have a unique characteristic in Nepal. The huge energy consumed comes from the biomass sources and majority of it is non-monetized. Except for the fuel-wood supplied by the Timber Corporation of Nepal (TCN) and some back-loaded supply to the urban or market centers, all other are financially freely available. The electricity, fossil fuels and some alternative sources of energy pass through the monetized market. With the 13% of commercial energy and 0.5% of the alternative energy, in the total energy consumption share, it is about 40% of the total energy that is monetized. Although these commercial fuels, especially the fossil fuels consumption constitutes a small proportion in the overall energy share, the import of it has a significant impact on the country’s overall foreign exchange service.

5.1.1 Fuel-wood Market and Prices

The main sources of fuelwood are government forests controlled by the Ministry of Forest and Soil Conservation. The ministry officially allocates forest area to the TCN for the extraction of forest products. The unofficial extraction of fuelwood by the rural people is a common phenomenon for their self consumption. However, some part of it is traded to the market centers nearby. The fuelwood extraction and selling activities make a considerable contribution for subsistence income in many rural areas.

As such the official allocation of fuelwood prices is by TCN through the ministry. The TCN sets the official price of forest products at each stage of harvesting, transportation, wholesaling and retailing. TCN fuelwood price varies within Nepal depending upon transport distance from the harvesting area to the urban depot: the variation however, does not necessarily cover the differential transport cost. Supply of fuelwood from TCN depots is currently insufficient, however, to have much impact on the fuelwood prices. The market clearing prices of fuelwood is therefore determined at the private depots of the urban areas. The prices of fuelwood allowed by the Government of Nepal to be charged by TCN do not cover the full cost incurred by TCN to supply most fuelwood to the consuming centers. As a consequence of the inability to obtain sufficient extraction permits from the Ministry of Forest and Soil Conservation, almost all the depots of TCN have limited supply availability. TCN however, maintain the supply of fuelwood to crematoria, during certain critical months such as Dashain and Tihar festivals, or when they are pressurized by the local people to provide fuelwood. Table 5.1 shows the price of fuelwood at different centers.


The actors involved in the fuelwood marketing in the urban centers are the depots of TCN, private depots and dealers. With the head office located in Kathmandu, TCN has branch offices and sub-branch offices in most urban centers. It has about 100 sales depot operated in different parts of the country and sixteen depots are operational in Kathmandu itself. The private sector has always been heavily involved in the fuelwood business in Nepal. There are more than 50 private depots in the Kathmandu Valley. Terai urban centers have fewer private depots but receive fuelwood from a greater diversity of sources, because it may come from Nepal or from India and may be delivered directly by the backloaders, by bus or truck or by rickshaw or cart. The TCN set the official price for the fuelwood at each stage of harvesting, transportation, wholesaling and retailing. The price should be approved by the cabinet of Government of Nepal. TCN fuelwood price vary within Nepal depending on the transport distance from the harvesting area to the urban depot. Supplies of TCN depots are currently insufficient and have a much impact on the fuelwood price. The market clearing price of fuelwood is therefore determined in the private depots of the urban areas. Generally the market price of fuelwood is 2-3 times higher than that of the TCN price.

Table 5.1: Retail Price of Fuelwood at Different Location Price/Kg Location

TCN Depot Private Depot Kathmandu 4.00 6.00 - 8.00 Kathmandu (Crematorium) 2.80 - Biratnagar 4.00 5.00 - 7.00 Birgunj 5.00 7.00 Hetauda 4.00 6.00 Butwal 4.00 7.00 Mahendra Nagar 3.00 5.00

Source: Gorkha Patra, October 2004 The basic wood transport activity involves three moves. The first is from the forest clearing sites in the terai to the stacking places called as Ghadgadi. The second is from the stacking depots. The third is from these depots to the consumers. Some large customers, such as the military, police and the industrial customers (brick and tile industries), bypass these depots and pickup the wood directly from the stacking places. Another form of transport is the movement by backloaders from the government forests either to the roadside for movements by trucks to private depots or directly to the village market centers. The routes from the major sources to the consumers are as shown in the chart given.


Chart Showing the Flow of Fuelwood from Source to Consumers

Private Depot

Household

TCN/Private

Military/Police

TCN Depot

Commercial centers

Industries Trucks

Military/ Police Trucks

Bullock Carts

Bus/loaded trucks

Private Storage Point

Community Storage

Back Load Carrier/Bicycle

Back Loaders

Individual collectors

TCN/DFO storage(Ghadgaddi)

On farm Supply

Community/ leasehold forest

Private Forest

Confiscated wood

Government Forest

Point of sale Point of sale

Dealer Dealer TransportTransportCollection Point/Storage Collection Point/Storage

ConsumerConsumerSource Source

The TCN, private sectors and the backloaders are responsible for the transport of the fuelwood to the urban centers. The Department of Forests issues households permit to TCN for the transport of the fuelwood. Private dealers who collect fuelwood using industrial or institutional permits or through TCN and DOF auctions often deliver the fuelwood directly to the industries, institutions and private depots of urban centers. The backloaders also extract the fuelwood from the nearby government forest of the urban centers and bring the wood to the market on their backs or bicycles. These backloaders sells the fuelwood directly to the end-user and sometimes to the private depot also.

5.1.2 Petroleum Fuel Prices

Nepal Oil Corporation (NOC) is the sole agency in Nepal for the import and distribution of the petroleum products. There are also several private enterprises for the distribution of LPG in Nepal. The pricing policy for the major petroleum products such as kerosene, HSD, petrol, ATF and LPG is approved by the Government of Nepal. The NOC board can fix the price of other unregulated products. Table 5.2 presents the historical trend of retail selling price of major petroleum products


Table 5.2: Historical Trend of Petroleum Fuels Price Price of Different Petroleum Products in Nepalese Rupees

Sl. No. Date Petrol/liter Deisel/liter Kerosene/

liter Kerosene (Quota) LPG/Kg

1 2055.10.02 40 15.5 10.5 31.03 2 2056.07.10 40 23 13 31.03 3 2057.06.28 47 27.5 26 15.5 31.03 4 2057.08.01 47 27.5 22 15.5 31.03 5 2057.10.04 46 26.5 17 37.93 6 2059.08.07 52 26.5 17 51.72 7 2059.12.12 56 35.5 28 23 51.72 8 2060.01.07 56 33.5 27 20 51.72 9 2060.01.25 54 31 24 20 62.07

10 2061.04.28 56 31 24 20 62.07 11 2061.06.02 56 35 28 24 62.07

Source: Prabhat 2061, NOC

Trend Chart of Retail Price of Various Petroleum Products Source : Prabhat 2061, NOC

0

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Time and Date

Nep

ales

e R

upee

s Petrol

Deisel

Kerosene (Open)

Kerosene (Quota)

LPG

5.1.3 Electricity Prices

Overall electricity use in the total energy consumption is about 1.5%. Electricity is generally supplied through the grid extension by Nepal Electricity Authority. Also there are isolated grids which provide electricity to certain isolated areas which are out of reach of the national grid. Electricity is also provided through Micro Hydro Schemes and Solar Home Systems.

Nepal Electricity Authority is primarily responsible for planning, construction and operations for electric supply. Presently there are various Independent Power Producers (IPPs), who generate electricity and under the Power Purchase Agreement with NEA sell the bulk power to NEA. NEA is also in the process of unbundling and there will be


separate entities for generation, transmission and distribution as envisaged in National Water Plan 2005.

There are two different price structures for the electricity produced for the residential customer depending upon the type of transmission. The price structure for the electricity transmitted by national grid and distributed is regulated by the Electricity Tariff Fixation Commission, while the isolated system along with the micro hydro generated electricity fixes the prices according to the generator.

The Government of Nepal, through NEA is also executing the rural electrification program. As such, it has started to sell electricity in bulk to cooperatives and communities for making the rural electrification more affordable.

The tariff for different sector of the economy is also different. Also for the residential sector, the tariff depends upon the amount of the unit consumed. In the industrial sector, the price of electricity is less compared to other sectors of the economy. Also, NEA has introduced Time of the Day meters for effective utilization of the energy generated. The table 5.3 below show different tariff structure for different sector of the economy.

Table 5.3: Existing Tariff Structure of NEA (Effective September 2001)

Peak Time Off-Peak Normal18.00 - 23.00 23.00 - 6.00 6.00 - 18.00

A.High voltage (66 kV

& above)1. Industrial 175.00 5.20 3.15 4.55

B.Medium voltage (33 kV)

1. Industrial 190.00 6.55 4.00 5.752. Commercial 216.00 8.50 5.15 7.353. Non-commercial 180.00 8.85 5.35 7.704. Irrigation 47.00 3.85 2.35 3.405. Water Supply 150.00 4.55 2.75 3.956. Transport 180.00 4.70 2.95 4.157. Street Light 52.00 5.70 1.90 2.85

C.Medium voltage (11 kV)

1. Industrial 190.00 6.70 4.10 5.852. Commercial 216.00 8.65 5.25 7.553. Non-commercial 180.00 9.00 5.45 7.854. Irrigation 47.00 3.95 2.40 3.455. Water Supply 150.00 4.60 2.80 4.106. Transport 180.00 4.80 3.00 4.257. Street Light 52.00 6.00 2.00 3.00

Note :a) If demand meter reads kilowatts (kW) then kVA = kW/0.8b) 10% discount in the total bill amount will be given to he HMG/N approved Industrial Districtc) 25% discount in the total bill amount will be given to HMG Hospitals and Health Center (except residential complex)

Energy charge (Rs/unit)TIME OF DAY (TOD) TARIFF RATES

Consumer Category & Supply Level

Monthly Demand Charges (Rs/kVA)


DOMESTIC CONSUMERSA Minimum Monthly Charge : METER CAPACITY Minimum Charge (NRs.) Exempt (kWh)

Upto 5 ampere 80.00 20.0015 ampere 299.00 50.0030 ampere 664.00 100.0060 ampere 1394.00 200.00Three phase supply 3244.00 400.00

B Energy chargeUpto 20 units Rs. 4.00 per unit21-250 units Rs. 7.30 per unitOver 250 units Rs. 9.90 per unit

Energy Charge Rs. 5.10 per unitSTREET LIGHTSA With Meter Rs. 5.10 per unitB Without Meter Rs. 1860.00 per kVATEMPORARY SUPPLYEnergy Charge Rs. 13.50 per unitCOMMUNITY WHOLESALE CONSUMEREnergy Charge Rs. 3.50 per unit

A Low Voltage (400/230 volt)(a) Rural and Cottage 45.00 5.45(b) Small Industry 90.00 6.60

B Medium voltage (11kV) 190.00 5.90C Medium voltage (33kV) 190.00 5.80D High voltage (66kV and above) 170.00 4.60COMMERCIALA Low Voltage (400/230 volt) 225.00 7.70B Medium voltage (11kV) 216.00 7.60C Medium voltage (33kV) 216.00 7.40Non-CommercialA Low Voltage (400/230 volt) 160.00 8.25B Medium voltage (11kV) 180.00 7.90C Medium voltage (33kV) 180.00 7.80

A Low voltage (400/230 volt) - 3.6B Medium voltage (11kV) 47 3.5C Medium voltage (33kV) 47 3.45

A Low voltage (400/230 volt) 140 4.3B Medium voltage (11kV) 150 4.15C Medium voltage (33kV) 150 4

A Medium voltage (11kV) 180 4.3B Medium voltage (33kV) 180 4.25

10

11 TRANSPORT

1

2

3

4

5

6

7

8

9 IRRIGATION

WATER SUPPLY

TEMPLES

INDUSTRIAL Monthly Demand Charge(Rs/kVA)

Energy Charge (Rs/unit)


References and Bibliography CADEC, 2003. Renewable Energy: Data of Nepal, Community Awareness Development

Center, Kathmandu, Nepal CADEC, 2004. Micro-hydro Year Book, 2004, Community Awareness Development

Center, Kathmandu, Nepal CEDA, 2001. Final Report on Agricultural Sector Energy Consumption in Nepal.

Prepared for and funded by Water and Energy Commission Secretariat, Kathmandu, Nepal.

Central Bureau of Statistic, 2001- Population Census 2001, Kathmandu, Nepal Central Bureau of Statistics (2004). Statistical pocket book. Central Bureau of Statistics,

National Planning Commission Secretariat, Kathmandu. D.E. Consultancy Pvt. Ltd., 1997. Update and Compilation of Energy Resources and

Consumption Profile of Nepal, A report submitted to and funded by Water and Energy Commission Secretariat, Nepal.

deLucia and Associates, Inc, 1994. The Equitable and Efficient Energy Pricing Study,

Nepal. Prepared for ADB and Water and Energy Commission Secretariat. Department of Forest (2001). Production of timber and fuelwood. HMG/ Dept. of Forest,

Kathmandu, Nepal DFRS and FRISP, 1999. Forest Resources of Nepal (1987- 1998). Publication No. 74.

Kathmandu, Nepal. DIP Consultancy Pvt. Ltd., 1998. Industrial Energy Survey of Nepal: Modern and

Traditional, A report submitted to and funded by Water and Energy Commission Secretariat, HMG/Nepal.

Dept. of Forest Research and Survey (Nov. 1999)- Forest Resources of Nepal (1987-

1998). Forest Resources Information System Project (Govt. of Finland) Pub. No. 74. Kathmandu, Nepal

MOF&SC, 1988. Master Plan for the Forestry Sector, Nepal. Main Report. Kathmandu,

Nepal. Master Plan for the Forestry Sector (1988). Main report. Master Plan for the Forestry

Sector, Ministry of Forests and Soil Conservation, Kathmandu.


Ministry of Agriculture and Cooperatives, 2005. Statistical Information on Nepalese Agriculture, 2004/05, Singha Durbar Kathmandu, Nepal.

Ministry of Finance, 2005. Economic Survey of Nepal 2004/05, Ministry of Finance,

Government of Nepal. NEA, 2005. A Year in Review FY 2004/05. Annual Report, Nepal Electricity Authority,

Kathmandu, Nepal Nepal Consult (1991). Final report on study of indigenous fuel (wood/charcoal)

resources potential for industrial inter fuel substitution. Water and Energy Commission Secretariat, Singha Durbar, Kathmandu.

NPC, 2002. Tenth Five Year Plan (2002- 2007). Kathmandu, Nepal: National Planning

Commission. NOC, 2005, Prabhat, 2061, Nepal Oil Corporation, Kathmandu, Nepal TRUST, 1999. Final Report on Detailed Energy Consumption Survey in the Commercial

Sector of Nepal. Submitted to and funded by Water and Energy Commission Secretariat, Kathmandu, Nepal.

TRUST, 2000. Final Report on Detailed Energy Consumption Survey in Transport

Sector of Nepal. Submitted to and funded by Water and Energy Commission Secretariat, Kathmandu, Nepal.

WECS (1994). Energy Resource and Consumption Profile of the Central Development

Region of Nepal. Final Report, Vol. 1. 1994. Ministry of Water Resources, Water and Energy Commission Secretariat and, Field Survey data.

WECS (1995). Energy Resources Base of Nepal: Perspective Energy Plan. Supporting

Document No. 2. WECS, Kathmandu. WECS (1996), A Summary of the Land Resource Mapping Project Results (with

Emphasis on Forest Land Use) Rep. No. 4/1/310386.1/2 Seq. 225, Kathmandu, 1986.

WECS (1996). Energy Synopsis Report Nepal 1994/95- Kathmandu, Nepal. Report

No.3/3210596/1/1 Sequence No. 488. WECS, 1987. Fuelwood Supply in the District of Nepal. Report No. 4/2/070187/1/1, Seq.

250. Kathmandu, Nepal WECS, 1994f. Socio-Economic (Gender Issues in Energy Development), Perspective

Energy Plan, Supporting Document No 9. Kathmandu: Water and Energy Commission Secretariat, HMG/Nepal.


WECS, 1995a. Energy Sector Synopsis Report, Perspective Energy Plan, Supporting Document No 1. Kathmandu: Water and Energy Commission Secretariat, Nepal.

WECS, 1995b. Energy Resources Base of Nepal, Perspective Energy Plan, Supporting

Document No 2. Kathmandu: Water and Energy Commission Secretariat, Nepal. WECS, 1995c. Alternate Energy Technology: An Overview and Assessment, Perspective

Energy Plan, Supporting Document No 3. Kathmandu: Water and Energy Commission Secretariat, Nepal.

WECS, 1995d. Energy Conservation and Demand Management: An Untapped

Resources, Perspective Energy Plan, Supporting Document No 6. Kathmandu: Water and Energy Commission Secretariat, Nepal.

WECS, 1995e. An Overview of Environmental Concerns on Energy Development,

Perspective Energy Plan, Supporting Document No 7. Kathmandu: Water and Energy Commission Secretariat, Nepal.

WECS, 1995g. Institutional Arrangements: Energy Sector, Perspective Energy Plan,

Supporting Document No 10. Kathmandu: Water and Energy Commission Secretariat, Nepal.

WECS, 1998. District, Regional and National Forest Cover Class Summaries of the

Area, Fuelwood Yield and Wood Volume for the Kingdom of Nepal. WECS, 2001. Wood Energy Planning for Nepal. The Study Report Submitted to

Regional Wood Energy Development Programme, Bankok, Thailand.


Annexes Annex – 1 : Energy Conversion Tables Annex – 2 : Sectoral Energy Consumption Pattern Annex – 3 : Nepal Energy Supply Demand Balance


Annex 1

Units Kcal (000) GJ TCE TOEKilo Calori 1.0000 0.0041868 0.0001429 0.0000972GJ 238.8459 1.0000000 0.0341208 0.0234622TCE 7000.00 29.3076000 1.0000000 0.0687622TOE 10290.00 42.6217000 1.4542880 1.0000000

Fueltype Unit Kcal (000) GJ TCE TOE OtherTraditional Fuel

Fuelwood tonne 4000 16.75 0.57 0.39 1.43 m3m3 2800 11.72 0.4 0.27 0.7 tonne

Charcoal tonne 7100 29.73 1.01 0.69 2.86 m3m3 2485 10.4 0.36 0.24 0.35 tonne

Agricultural Waste tonne 3000 12.56 0.43 0.29 m3m3 tonne

Animal Dung* tonne 2600 10.89 0.37 0.25 m3m3 tonne

Biogas 000 m3 5800 23 0.83 0.56

Commercial Fuel Unit Kcal (000) GJ TCE TOE Others

Coal tonne 6000 25.12 0.86 0.58kl 30.08 0.611 tonnetonne 11760 49.24 1.68 1.14 1.637 KLkl 8000 33.49 1014 0.78 0.71 tonnetonne 11290 47.27 1.61 1.1 1.41 klkl 8640 36.17 1.23 0.84 0.78 tonnetonne 11130 46.60 1.59 1.08 1.29 klkl 8660 36.26 1.24 0.84 0.78 tonnetonne 11130 46.06 1.59 1.08 1.29 klkl 9060 37.93 1.29 0.88 0.83 tonnetonne 10960 45.89 1.57 1.07 1.21 klkl 9350 39.15 1.34 0.91 0.85 tonnetonne 10960 45.89 1.57 1.07 1.17 klkl 9860 41.28 1.41 0.96 0.93 tonnetonne 10560 44.21 1.51 1.03 1.07 kl

Electricity MWh 860 3.6 0.12 0.08 5.78 GHh from oil

Conversion Factors and Energy Content

Basic Energy Conversion

* dry basis, One tonne of dung yields 190 cubic meter of biogas at 15 degree Centrigrade

KRS

HSD

LDO

FO

Energy Contents of Various Fuel Type

LPG

MS

ATF


Annex 2 Sectoral Energy Consumption Pattern

Annex 2a Residential Sector Energy Consumption in 000 GJ

Fueltype 2001/02 2002/03 2003/04 2004/05 2005/06* Traditional 298349 304611 311186 317798 324516

Fuelwood 266724 272323 278220 284138 290149 Agricultural residue 11723 11970 12221 12478 12742

Animal dung 19901 20319 20746 21181 21626 Commercial 14874 13993 13356 11815 12045

Petroleum 12839 11748 10892 9061 9108 LPG 1301 1451 1711 2008 2217

Motor Spirit 0 0 0 0 0 Air Turbine Fuel 0 0 0 0 0

Kerosene 11537 10297 9181 7053 6891 High Speed Diesel 0 0 0 0 0

Light Diesel Oil 0 0 0 0 0 Fuel Oil 0 0 0 0 0

Others 0 0 0 0 0 Coal 27 23 29 25 39

Electricity 2009 2222 2435 2729 2898 Renewables 1432 1665 1779 1955 2134

Biogas 1392 1620 1731 1903 2078 Micro Hydro 40 44 47 50 53

Solar 0 1 1 2 3 Others 0 0 0 0 0

Total 314655 320269 326321 331567 338696


Annex 2b Indusrial Sector Energy Consumption in 000 GJ



Animal dung 0 0 0 0 0 Commercial 10551 9900 11559 10516 14647

Petroleum 1945 1936 1812 1331 1469 LPG 0 0 0 0 0



Light Diesel Oil 1 0 0 0 0 Fuel Oil 578 554 421 -28 27

Others 522 588 663 747 841 Coal 6454 5698 7263 6434 10248



Solar 0 0 0 0 0 Others 0 0 0 0 0

Total 12537 11969 13716 12761 16985


Annex 2c Commercial Sector Energy Consumption in 000 GJ



animal dung 0 0 0 0 0 Commercial 3172 3303 3391 3286 3621

Petroleum 2846 2970 3001 2893 3205 LPG 1028 1229 1449 1700 2040




Others 0 0 0 0 0 Coal 0 0 0 0 0



Solar 0 0 0 0 0 Others 0 0 0 0 0

Total 4921 5228 5316 5335 5836


Annex 2d Transport Sector Energy Consumption in 000 GJ




Petroleum 12004 12683 13112 13873 14189 LPG 72 81 96 113 128




Others 0 0 0 0 0 Coal 0 0 0 0 0



Solar 0 0 0 0 0 Others 0 0 0 0 0

Total 12025 12703 13132 13894 14209


Annex 2e Agriculture Sector Energy Consumption in 000 GJ




Petroleum 2671 2780 2778 2905 2873 LPG 0 0 0 0 0




Others 0 0 0 0 0 Coal 0 0 0 0 0



Solar 0 0 0 0 0 Others 0 0 0 0 0

Total 2776 2888 2892 3085 3100


Annex 3 Energy Supply Demand Balance

Traditional 263634 0 0 263634 0 0 0 263634 259026 3635 973 0 0 0 263634Fuelwood 235495 0 0 235495 0 0 0 235495 231109 3430 956 0 0 0 235495

Agricultural residue 10571 0 0 10571 0 0 0 10571 10349 205 17 0 0 0 10571animal dung 17568 0 0 17568 0 0 0 17568 17568 0 0 0 0 0 17568

Commercial 4152 25731 313 29215 354 546 1175 27759 8081 8136 1867 8721 690 262 27759petroleum 0 22383 0 22029 354 414 0 21615 6883 4244 1275 8613 600 0 21615

LPG 0 916 0 916 0 0 0 916 796 0 120 0 0 0 916Motor Spirit 0 1398 0 1380 18 0 0 1380 0 14 0 1365 0 0 1380

Air Turbine Fuel 0 1475 0 1469 6 0 0 1469 0 0 0 1469 0 0 1469Kerosene 0 7753 0 7568 185 0 0 7568 6087 384 1097 0 0 0 7568

High Speed Diesel 0 9646 0 9501 145 0 0 9501 0 3295 0 5651 556 0 9501Light Diesel Oil 0 174 0 174 0 0 0 174 0 3 0 128 44 0 174

Fuel Oil 0 755 0 755 0 414 0 341 0 308 33 0 0 0 341Others 0 266 0 266 0 0 0 266 0 240 25 0 0 0 266

Coal 0 3085 0 3085 0 0 0 3085 15 2601 366 103 0 0 3085Electricity 4152 263 313 4102 0 132 1175 3059 1183 1291 226 5 90 262 3059

Renewables 435 0 0 435 0 0 0 435 435 0 0 0 0 0 435Biogas 412 0 0 412 0 0 0 412 412 0 0 0 0 0 412Micro Hydro 23 0 0 23 0 0 0 23 23 0 0 0 0 0 23Solar 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0Others 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0

Grand Total 268221 25731 313 293284 354 546 1175 291827 267542 11771 2840 8721 690 262 291827

Nepal Energy Supply Demand Balance1995/96in 000 GJ

Others TotalIndustrial Commercial Transport AgriculturalFinal Supply ResidentialTotal Primary

Supply/SaleStatistical

DifferencesThermal

GenerationEnergy LossFueltype Primary

Production Import Export





LPG 0 1075 0 1075 0 0 0 1075 925 0 149 0 0 0 1075Motor Spirit 0 1561 0 1497 64 0 0 1497 0 15 0 1482 0 0 1497



Fuel Oil 0 714 0 714 0 394 0 320 0 276 44 0 0 0 320Others 0 299 0 299 0 0 0 299 0 258 41 0 0 0 299



Grand Total 271928 27288 361 298678 177 537 1288 297139 274341 6417 3179 11942 966 293 297139

Nepal Energy Supply Demand Balance

Transport Agricultural Others TotalFinal Supply Residential Industrial CommercialFueltype Primary

Production Import Export Total Primary Supply/Sale

Statistical Differences

Thermal Generation

Energy Loss

1996/97in 000 GJ





LPG 0 1131 0 1131 0 0 0 1131 708 0 423 0 0 0 1131Motor Spirit 0 1591 0 1572 19 0 0 1572 0 0 0 1572 0 0 1572



Fuel Oil 0 1147 0 1147 0 1093 0 54 0 54 0 0 0 0 54Others 0 337 0 337 0 0 0 337 0 337 0 0 0 0 337



Grand Total 277398 31335 243 308203 287 1480 1158 306339 281533 6921 2919 13546 1099 322 306339


Transport Agricultural Others TotalFinal Supply Residential Industrial CommercialTotal Primary


DifferencesThermal







LPG 0 1232 0 1232 0 0 0 1232 728 0 466 38 0 0 1232Motor Spirit 0 1728 0 1674 53 0 0 1674 0 0 0 1674 0 0 1674



Fuel Oil 0 1414 0 1398 16 1208 0 189 0 189 0 0 0 0 189Others 0 380 0 380 0 0 0 380 0 380 0 0 0 0 380

Coal 0 2618 0 2893 -275 0 0 2893 13 2881 0 0 0 0 2893Electricity 4046 837 231 4651 0 428 1301 3778 1478 1588 278 9 82 342 3778


Grand Total 283649 33179 231 316536 61 1636 1301 314454 287815 7522 3215 14849 711 342 314454

1998/99in 000 GJ




DifferencesThermal







LPG 0 1508 0 1508 0 0 0 1508 867 0 595 46 0 0 1508Motor Spirit 0 1861 0 1862 -1 0 0 1862 0 0 0 1862 0 0 1862



Fuel Oil 0 1109 0 1107 3 679 0 428 0 428 0 0 0 0 428Others 0 428 0 428 0 0 0 428 0 428 0 0 0 0 428



Grand Total 290799 43219 342 332700 976 919 1556 330706 295159 15717 3708 12798 2968 355 330706

in 000 GJ

Nepal Energy Supply Demand Balance1999/00



DifferencesThermal







LPG 0 1975 0 1975 0 0 0 1975 1103 0 812 59 0 0 1975Motor Spirit 0 1984 0 1984 0 0 0 1984 0 0 0 1984 0 0 1984



Fuel Oil 0 867 0 864 3 276 0 588 0 588 0 0 0 0 588Others 0 482 0 482 0 0 0 482 0 482 0 0 0 0 482



Grand Total 297890 40112 454 337260 289 374 1661 335421 301143 12998 4128 13592 3152 409 335421




DifferencesThermal







LPG 0 2401 0 2401 0 0 0 2401 1301 0 1028 72 0 0 2401Motor Spirit 0 2119 0 2119 0 0 0 2119 0 0 0 2119 0 0 2119



Fuel Oil 0 751 0 751 0 173 0 578 0 578 0 0 0 0 578Others 0 522 0 522 0 0 0 522 0 522 0 0 0 0 522



Grand Total 310278 39575 482 349372 0 234 1891 347369 314655 12537 4921 12025 2776 454 347369

Nepal Energy Supply Demand Balance.2001/02in 000 GJ



DifferencesThermal







LPG 0 2761 0 2761 0 0 0 2761 1451 0 1229 81 0 0 2761Motor Spirit 0 2259 0 2259 0 0 0 2259 0 0 0 2259 0 0 2259



Fuel Oil 0 598 0 598 0 45 0 554 0 554 0 0 0 0 554Others 0 588 0 588 0 0 0 588 0 588 0 0 0 0 588



Grand Total 318153 38124 692 355585 0 61 2014 353542 320269 11969 5228 12703 2888 484 353542


in 000 GJ2002/03



DifferencesThermal







LPG 0 3257 0 3257 0 0 0 3257 1711 0 1449 96 0 0 3257Motor Spirit 0 2276 0 2276 0 0 0 2276 0 0 0 2276 0 0 2276



Fuel Oil 0 522 0 522 0 101 0 421 0 421 0 0 0 0 421Others 0 663 0 663 0 0 0 663 0 663 0 0 0 0 663



Grand Total 325175 39398 505 364068 0 137 2093 361910 326321 13716 5316 13132 2892 533 361910




DifferencesThermal






Commercial 8828 36941 399 45727 -356 49 2442 43334 11815 10516 3286 13894 3085 599 43195petroleum 0 29846 0 30202 -356 0 0 30202 9061 1331 2893 13873 2905 0 30063

LPG 0 3821 0 3821 0 0 0 3821 2008 0 1700 113 0 0 3821Motor Spirit 0 2548 0 2534 15 0 0 2534 0 0 0 2534 0 0 2534

Air Turbine Fuel 0 2472 0 2417 55 0 0 2417 0 0 0 2417 0 0 2417Kerosene 0 8460 0 8659 -199 0 0 8659 7053 413 1192 0 0 0 8659

High Speed Diesel 0 11685 0 11911 -225 0 0 11911 0 199 0 8807 2904 0 11911Light Diesel Oil 0 3 0 3 0 0 0 3 0 0 0 3 1 0 3

Fuel Oil 0 109 0 111 -2 0 0 111 0 -28 0 0 0 0 -28Others 0 747 0 747 0 0 0 747 0 747 0 0 0 0 747



Grand Total 332888 36941 399 369787 -356 49 2442 367394 331568 12761 5335 13894 3085 612 367255




DifferencesThermal







LPG 0 4385 0 4385 0 0 0 4385 2217 0 2040 128 0 0 4385Motor Spirit 0 2628 0 2628 0 0 0 2628 0 0 0 2628 0 0 2628



Fuel Oil 0 128 0 128 0 0 0 128 0 27 0 0 0 0 27Others 0 841 0 841 0 0 0 841 0 841 0 0 0 0 841



Grand Total 340800 41795 480 382055 60 36 2472 379619 338696 16985 5836 14209 3100 692 379518

2005/06*in 000 GJ

* Provisional




DifferencesThermal




Energy Synopsis Report 2006 : Nepal

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