SONEUK Conference on Infrastructure Development in Nepal, London, 18th Feb 2017

Evaluation and Solution of Energy Crisis in Nepal

Ramhari Poudyal, B.Eng,M.Sc.; MIETPhD candidate, Swansea University,UK

The world is facing an enormous challenge to provide sufficient quantity of clean energy for its burgeoning population.

Energy is a fundamental asset for socio–economic development and poverty eradication of any country.

Over 1.2 billion people 20 % of the world population have no access to electricity

768 million people lack access to clean drinking water and 2.5 billion do not have adequate sanitation

2.8 billion people still cook with solid fuel like wood, agricultural residue, animal dung

1 billion people live more than 2 km from an all-weather road.

Introduction

Nepal has been suffering from the chaotic energy crisis for about a decade.

A normal life of citizens is being crippled with long hours of load shedding and never ending queues in front of the gas stations.

About 6.6 million people of Nepal have no electricity

However Nepal has huge potential for generating

• 43,000 MW of hydro-electricity• 2,100 MW of solar power and• 3,000 MW of wind power

Introduction

Types of energy crisis :• Oil Crisis• Petroleum Crisis• Energy Shortage• Electricity Shortage

Energy Crisis - Nepal

Political Events

Aging Infrastruc

ture

Attacks by

Terrorists or

MilitaryInfrastructure

damage from

severe weather

Over Consum

ption

Industrial Actions

Factors of Energy Crisis

Energy overview & Electricity Consumption

78%

12%

4%3% 3%

Energy Overview 2015Biomass Petro -Product Coal Grid Electric

Modern RenewableThe electricity consumption in

different sectors

Electricity Consumption Per Capita (MWh /Capita) in 2014

Icelan

d

Norway

Canada

USASau

di UKChina

India

Bangla

desh

Mynmar

Nepal

0

10

20

30

40

50

60

53.9

23

15.5412.96

9.14

5.13 3.930.80.3100000000000010.21 0.14

Total Energy Consumption Per Capita KWh/Year 2013

Total Electricity of Nepal

S.No. Organisation Capacity

1 NEA 350MW

2 PPI 180MW

3 Imported from India 355MW

Total   885MW

Total Demand   1325MW

Total Supply   885MW

Total Deficit   440MW

Total loss   25.78% (228MW)

13 Billion

Time overruns Hydropower and Transmission line projects in Nepal

Project Time OverrunKulekhani I 21 MonthsMarsyandi 7 MonthsKali Gandaki – A 18 months

Chilime 60 monthsKulekhani III 54 monthsRaughat 72 monthsUpper Trisuli 38 monthsUpper Tamakoshi 12 months

220 KV Khimti – Dhalkebar More than 10 Years not yet completed

400 KV Dhalkebar – Muzzaffarpur 6 months

Trisuli 3 A 26 monthsChameliya 60 monthsMiddle Marsyangdi 48 Months

The main reason behind this time and cost overruns is mostly due to NEA’s centralised and prolonged procurement processes

ghost contractors leaving work to be executed by inexperienced and technically and financially weak local contractors.

low project readiness at project approval, weak project management capacity of NEA .

The total losses of NEA at present have reached NPR 27 billion despite the government written off NPR 27 billion in 2011.

Resource 

Value Units Rank Period Source

Hydro Power 

45,000 MW     WECS

Wind Potential

7,606

Area(Km2)

Class 3 – 7 Wind

at 50 m

36 1990 NREL

Solar Potential

466,643,167 MW h/Year 89 2008 NREL

Coal Reserves

1.10Million Short

Tons77 2008 EIA

Natural Gas Reserves

0Cubic

Meters(Cum)152 2010

CIA World

Fact Book

Oil Reserves 0 Barrels (BBL) 151 2010CIA World

Fact Book

Bio Gas reserves

About 200,000 Plants of 10 Cu m size

at excising livestock populationCu m     APEC

Fuel wood 7 metric Ton Metric Ton     APEC

Potential Energy source of Nepal

National GDPAs usual reference scenario

Sector wise Energy DemandAs usual reference scenario

“To make an energy fix, We need an energy mix.”

- BP Slogan

Energy Matrix

“Sustainable Transport system a must to minimise air pollution in Kathmandu valley” – Dr. Carlos (WHO)

Kathmandu becoming mask town Air pollution killing double of what tobacco kills in

Kathmandu Lung cancer is the No. 1 in Nepal. Over 4 million people die prematurely from illness

attributable to the household air pollution from cooking with solid fuels.”

According to Environment Performance Index, 2016, Nepal falls in the 149th place among 180 countries in terms of air quality.

The no. of deaths caused by air pollution indoor and outdoor is 30,000 a year. This is twice as much as the no. of deaths caused by tobacco

Sustainable Transport System

Kathmandu Valley Pollution Index(PM2.5) on 2nd Feb, 2017

A world Bank estimate of Nepal’s infrastructure gap pegs investment needs at between 8 – 12 % of national income

Nepal’s medium term ambition is to become a middle – income nation by 2030, while graduating out of the least developed country (LDC) status by 2022.

Source: WDI 2012

Energy Investment of selected countries

Distributed Renewable energy in Developing CountriesTechnology Typical Characteristics Installed Costs or LCOE

US$ / KW or US Cents /KWh

Biogas digester Digester size: 6 – 8 m3 Unit cost: US$ 612/Unit (Asia); US$ 886/Unit (Africa)

Biomass gasifier Size: 20 – 5,000 KW LCOE: 8 – 12 (Global)LCOE: 5 – 6 (China)

Solar home system System size: 20 – 100 W LCOE: 160 – 200 (Global)LCOE: 4 (Bangladesh)

Household wind turbine Turbine size: 0.1 – 3 KW(Off – grid, residential)

1. – 2.5 MW(Industrial, institutional)

Capitol cost: 10,000 / KW (1 KW turbine)5,000 / KW (5KW)2,500 – 3,500 / KW (250 KW)LCOE: 15 – 35+

Hydropower:Off – grid /rural

Plant size: 0.1 – 1,000 KWPlant / Storage type:Run – off – river, diurnal storage, hydrokinetic

Capital costs: 1,175 – 6,000LCOE: 5 – 40 

Village – scale mini – grid System size: 10 – 1,000 KW LCOE 25 – 100

0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 240

200

400

600

800

1000

1200

1400

The electric utility managed to post healthy growth in revenue, thanks to uninterrupted power supply to many parts of the country mainly due to effective demand side management and 18 percent rise(18.28 billion NRs) in electricity tariff in July last year.

Load Profile of NEA

Electric power transmission and distribution losses (% of output)

1971 1973 1975 1977 1979 1981 1983 1985 1987 1989 1991 1993 1995 1997 1999 2001 2003 2005 2007 2009 2011 20130

5

10

15

20

25

30

35

40

15.11

28.84

37.5

26.75

30.05

21.34 20.89 21.62 21.8 21.0819.31

21.1119.73

22.41 21.8520.99

19.49

28.3430.26

34.44

31.55 31.48

Electric power transmission and distribution losses (% of Output) in Nepal 1971 - 2013

Comparison of Transmission line

Comparison of Transmission line

The costs of new electricity transmission infrastructureCase Study

75 KM Route

Build (Capital) Lifetime

Report per KM

National Grid

Per KM

Report per KM

National Grid per KM

Overhead £ 1.6 m £ 1.6 m £ 4.0 m £ 4.8 m

Underground £ 16.7 m £ 18.8 m £ 18.9 m 20.8m

Cost Difference

£ 15.1 m £ 17.2 m £ 14.9 m 16.0 m

Case Study

15 KM Route

£1.7 m £1.6 m £4.1 m £4.8 m

Underground £ 17.4 m £ 18.0 m £ 19.3 m £ 19.2 m

Cost Difference

£ 15.7 m £ 16.4 m £ 15.2 m £ 14.4 m

(Investment Requirements 2011–2020 (total, in billions of dollars 2010)

Source: Andres et al. (2013), World Bank

Access to infrastructure Services in South Asian Region Countries

Source: World Development Indicators 2013

Solar and Wind maps of Nepal“our goal here is to fundamentally change the way the world uses energy. The goal is a complete transformation of the entire energy infrastructure of the world.”Elon Musk, CEO of Tesla & Chairman of Solar City, May 2015Solar radiation 3.6 – 6.2 KWh/m2/day, 300 days sunny, Average sunshine day 6.8Hours/day

Wind projects are relatively quick to install, and takes much less space than large solar arrays. If there is road access, equipment and no political obstructions, a 100MW wind farm can be built within six months. Our primary concern would be road access to wind sites since bigger turbines mean cheaper cost of electricity generation.

Solar and Wind Price in $ Million/Megawatts 2010 - 2016

2010 2011 2012 2013 2014 2015 Q - 3 20160

1

2

3

4

5

6

5.5

4.24.5

2.7 2.8

2

1.651.8 1.9 2

2.42.2

1.81.66

Solar

Wind

Source: Bloomberg Energy Finance

“Bangladesh is the world’s largest market for solar home systems, and other developing countries are seeing rapid expansion of small-scale renewable systems, including renewables-based mini-grids, to provide electricity for people living far from the grid.” – REN 21

IEA estimates that to achieve that Universal electrification objective by 2030, grid extension will be 30% and 70 % will be mini grids or off grid system.

Bangladesh

India China Nepal Kenya0

500,0001,000,0001,500,0002,000,0002,500,0003,000,0003,500,0004,000,000

Number of Solar Home Systems in top five Countries, End - 2014

Monthly Lifecycle costs of cooking in urban householdsSource: NOC 2013, NEA 2012Economic Cost of cooking kerosene NRS1500Economic Cost of cooking LPG NRS13751 INR = 1.60 NRS

Monthly Lifecycle costs of cooking in urban households(Based on D’sa, A. and Narsimha Murthy, K.V. 2004)

Year Kerosene LPG Electricity

1997 180 350 605

2000 270 410 680

2003 340 510 790

2012 1640 1030 940

Traditional bulb CFL LED Light Output

Watts

EnergyBillsNRs/Month(@5hr/day)

Watts EnergyBillsNRs/Month(@5hr/day)

Watts EnergyBillsNRs/Month(@5hr/day)

Lumens

40 Rs 45 8-12 Rs 11 4-5 Rs 5 450 

60 Rs 68 13 -18

Rs 18 6 – 8 Rs 8 300 -900 

100 Rs 113 23-30 Rs 30 16-20 Rs 20 1600 -1800

150 Rs 169 30-55 Rs 48 25-28 Rs 30 2600-2800 Source:

[NEEP]

Equivalent Wattages and Light output of Traditional, CFL and LED light

Energy Cost on product value in % for different industrial Sectors in Nepal

The UN Secretary – General’s initiative Sustainable Energy for all mobilizes global action to achieve universal access to modern energy services, double the global rate of improvement in energy efficiency, and double the share of renewable energy in energy in the global energy mix by 2030.

ChinaIndia

Pakist

an

Sri Lank

a

Bangla

desh

Nepal

Asian A

vg.

0

200

400

600

800

1000

1200

630560

630

300380

1020

470

Energy efficiency in Kgoe/US$ 1,000GDP (IEA,2012)

Series 1

Lime S

tone B

ased

Cem

ent

Cold S

torag

e

Fixed C

himne

y Bric

k

Pulp &

Pap

er

VSBKHote

l

Soap &

Che

mical

Clinke

r bas

ed C

emen

t

Biscuit

DairyMeta

l

Noodle

Vegeta

ble O

il & G

hee

Bevera

geSug

ar05

101520253035404550 47.6

37.91

31.91

19.8314.41

7.545.344.914.794.593.242.682.261.391.21

Energy Cost on product value in % for different industrial Sectors in Nepal

Source: Nepal Energy Efficiency Program

Sectors % for Electrical

% for Thermal

The Electrical Saving Potential

The Thermal Saving Potential

Beverage

9.09% 19.25% 1390.804 MWh

10707.587 GJ

Biscuit Sub Sector

29.47% 15.38% 1052.435MWh

8702.705GJ

Dairy Sub Sector

6.31% 13.91% 504.602MWh

12785.202GJ

Instant Noodle Sub Sector

6.15% 11.38% 243.34MWh

26786.582GJ

Sugar Sub Sector

14.55% 20.73% 783.678MWh

2095.16GJ

Vegetable Oil & Ghee Sub Sector

5.49% 11.07% 1200.312MWh

78084.573GJ

Residential Commercial Industrial Aggregate Avg.

0.065$/KWh0.035$/KWh

0.032$/KWh

0.042$/KWh

Average Costs of Energy Efficiency Programs by Sector(2012)

Energy Saving Potential Sectors (ESPS) conducted by NEEP

Conclusion

Government of Nepal needs a new strategy to come out of the power crisis along with adding new power generation. The major reason of current power crisis is the inefficient use of available resources. Development and deployment of renewable energy resources; solar, wind, micro

hydro, biomass etc. Optimum and Efficient use of resources and conservation of energy More researches on electrical power and potential renewable energy solutions must be

applied to improve of life of Nepalese people. NEA should take this power outage as an opportunity to brainstorm how to create

innovative policies and encourage private sector investment. Nepal needs significant investments into modern infrastructure to avoid the transmission

and distribution losses. In order to improve the industrial energy efficiency, the government can greatly influence

and develop the relevant policy including collection of appropriate data.