0

Final Report on

Study on Role of Renewable Energy Technologies in Climate Change

Mitigation and Adaptation Options in Nepal

Submitted to:

Alternative Energy Promotion Centre (AEPC) National Rural and Renewable Energy Programme (NRREP)

Climate and Carbon Subcomponent Khumaltar, Lalitpur, Nepal

Submitted by: Tribhuvan University, Institute of Engineering Center for Energy Studies (CES) Pulchowk, Lalitpur, Nepal

September, 2013

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1

Executive summary The traditional energy system is the main contributor to greenhouse gases (GHGs) emissions and,

therefore, to climate change whereas renewable energy (RE) emits no or help to reduce the GHGs

emission. In addition to this benefit, renewable energy technologies (RETs) provide multiple socio-

economic benefits in many development deficit (rural) areas and may serve as a good reliable option for

adaptation to climate change. Now, the central question is whether RETs can be a triple win-win strategy to

address mitigation adaptation development nexus, without or little trade off of development needs of

people; therefore, can it be a foundation on which a climate resilient development path can be based on?

There are some studies carried out to document impacts of RETs but their contribution on adaptation to

climate change has been shortchanged.

This study tried to answer this central question. The study carried out meta-analysis, to the extent possible,

of RETs related studies, both at national and international level. By drawing some theoretical derivations

and used to link with adaptation and development processes.

Adaptation is being defined in different ways and various typologies of adaptation are available in literature.

Despite various dimensions of adaptation proposed, most of the studies revealed that RETs provide energy

services to meet basic human needs (e.g., lighting, cooking, space comfort, mobility and communication)

and to serve productive processes (e.g. irrigation, food processing) in addition to reducing the GHGs

emission.

The study reviewed a dozen of case studies which showed RETs provide socio-economic and

environmental benefits to people that contribute for adopting and ensuring better adaptation to climate

change based on the local context. The analysis showed that RETs contribute to adaptation processes by

contributing on reducing drivers of vulnerability of people, improving adaptive capacity and addressing

climate change risk. The analysis also showed that existing RETs contribute more on reducing vulnerability/

increasing adaptive capacity than climate risk. RETs are very effective options to address many climate

change and development challenges, and can, at the same time, provide the adaptation and development

benefits.

But, these are not without challenges either. Financial, technical, institutional, policy and legal issues are

major challenges to promote RETs. For example upfront cost, cost of systems change (from traditional

energy to renewable) and policy failures are major shortcoming in our context. Hence, it is important to be

proactive for improving policy framework, reducing cost of technology, providing financing opportunities and

creating robust regulatory framework for effective monitoring and learning. There is no liberty of inaction so

renewable energy can be good base for a triple win strategy for climate compatible development in Nepal.

On the mitigation side, this study analyzed the GHG mitigation potential from the installation of different

RETs after 2012 in Nepal by using accounting method. It shows that altogether 4.17 million tons of CO2e of

the GHG emission can be mitigated by deploying seven major RET technologies consisting of biogas,

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improved water mill (IWM), stand-alone micro-hydro plants, mini-grid micro-hydro plants, solar PV home

systems, mud-ICS and metal-ICS after 2012. In terms of shares of the RETs in GHG mitigation, biogas can

contribute the most with GHG mitigating potential of 2 million tons of CO2e (48.1% of the total GHG

mitigation potential from selected RETs) with the installation of 722,774 number of biogas plants after 2012.

This is followed by the installation of 898,487 number of both mud and metal ICSs with the GHG mitigation

potential of 1.8 million tons of CO2e (share of 44.2%). The stand alone and mini-grid micro-hydro plants can

contribute 170 thousands ton of CO2e (4.1% of the GHG mitigation potential) by installing 73.2 MW of their

combined capacity. IWM and Solar PV home system can contribute 114 thousands ton of CO2e (share of

2.7%) and 114 thousands ton of CO2e (share of 0.9%) of the estimated GHG mitigation potential from

selected RETs by installing 22.7 kW of IWM and 215,903 solar PV home system respectively.

In terms of initial technology investment required for implementing above mentioned RET options to

mitigate GHG emission, ICS requires annualized initial technology investment cost below NRs 63 per ton of

CO2e mitigation. Biogas and IWM would require annualized initial technology investment cost of NRs 71.66

per ton of CO2e and NRs 276.94 per ton of CO2e mitigation respectively. The annualized technology

investment cost for mitigating GHG emission from stand alone and mini-grid micro-hydro plants are

estimated as NRs 1,180.22 per ton of CO2e and NRs 1,549.79 per ton of CO2e mitigation respectively.

Solar PV home system would require the annualized initial technology investment of NRs 1,258.50 per ton

of CO2e mitigation.

This indicates that though moderate level of initial investment is required for promoting RETs, the GHG

mitigation potential seems to be quite promising. Keeping in views of these benefits of GHG mitigation,

government should focus on creating an enabling environment to invest in RETs for harnessing domestic

energy resources, improve energy securities, maintain sustainable ecosystem and follow towards low

carbon economic development path.

Key words: adaptation to climate change, mitigation potential, renewable energy, socio-economic development, vulnerability, climate risk, technology investment cost

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Acknowledgements

We take this opportunity to thank the National Rural and Renewable Energy Programme (NRREP) Climate

and Carbon Subcomponent for trusting us to carryout this very important study.

Our sincere thanks go to Prof. Dr. Govind Raj Pokharel, Executive Director of Alternative Energy Promotion

Centre (AEPC) for his kind help and support in completion of this project. My special thanks go to Mr. Raju

Laudari, Assistant Director and Programme Manager, National Rural and Renewable Energy Programme

(NRREP) Climate and Carbon Subcomponent for his continuous valuable guidance, suggestions and

support. Similarly thanks also goes to Mr. Surya Kumar Sapkota, Assistant Director of Alternative Energy

Promotion Centre and Mr. Prem Kumar Pokhrel, Program Officer- Climate Change for their valuable input.

Many-many thanks go to the participants of the stakeholder workshops for their valuable comments and

suggestions which make this study at present state.

My sincere thanks go to study team members; Dr. Shree Raj Shakya, Mr. Ram Chandra Khanal and Mr.

Mr. Krishna Adhikari who have contributed as expert in respected fields.

And lastly I am very thankful to those who directly and indirectly helped us in completion of this project.

Prof. Dr. Tri Ratna Bajracharya

Team Leader

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Study Team 1. Prof. Dr. Tri Ratna

Bajracharya - Team Leader

2. Dr. Shree Raj Shakya - Climate Change Mitigation Expert

3. Mr. Ram Chandra Khanal

- Climate Change Adaptation Expert

4. Mr. Krishna Adhikari - Media and Publication Expert

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Abbreviations and Acronyms

AEPC Alternative Energy Promotion Centre, Nepal

NREEP National Rural and Renewable Energy Programme

CBS Central Bureau of Statistics

CO2e Carbon Dioxide Equivalent

CES Centre for Energy Studies, TU, Nepal

EIA Energy Information Administration

FEC Final Energy Consumption

GHG Green house Gas

GoN Government of Nepal

GWh Giga-Watt Hour

ICS Improved Cook Stove

IEA International Energy Agency

IWM Improved Water Mill

kW Kilo-Watt

kWh Kilo-Watt Hour

MW Mega-Watt

MWh Mega -Watt Hour

NEA Nepal Electricity Authority

PV Photo Voltaics

PJ Peta Joule

RE Renewable Energy

RET Renewable Energy Technology

TPES Total Primary Energy Supply

WECS Water and Energy Commission Secretariat

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List of Tables Table 5.1: Continuum of adaptation (vulnerability to impact approach)

Table 5.2: Adaptation based purpose

Table 5.3: Benefits of rural electrification to MH connected households

Table 5.4: impacts of RETs on Poverty Reduction Indicators

Table 5.5: Likely impacts of scaling up the REDP MHS project in Nepal

Table 6.1: Socio-economic and Energy-environmental Indicators of Nepal

Table 6.2: GHG Mitigation Potential of Renewable Energy Technologies in Nepal

Table 6.3: Investment Requirement of Renewable Energy Technologies for GHG Mitigation in Nepal

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List of Charts and Figures Figure 4.1: Methodological steps for the study

Figure 5.1: Sustainability dimensions and their interrelationships

Figure 5.2: A heuristic model of relations of RETs, adaptation and development

Figure 5.3: Conceptual framework of nexus of RETs, adaptation and development

Figure 5.4: Impacts/role of RETs on economic, social and environmental aspects

Figure 5.5: Potential impact of RETs on Millennium Development Goals

Figure 5.6: A heuristic mapping of the role of selected RETs for adaptation to climate change

Figure 6.1: Primary Energy Supply in Nepal during 1995/1996 to 2008/2009, PJ

Figure 6.2: Fuel Share in the Primary Energy Supply, %

Figure 6.3: Sectoral Energy Consumption in Nepal during 1995/1996 to 2008/2009, PJ

Figure 6.4: Sectoral Share in Energy Consumption, %

Figure 6.5: Sector wise GHG Emissions in the Base Case, million tons CO2e

Figure 6.6: Sectoral Shares in GHG Emission in the Base Case, %

Figure 6.7: GHG Mitigation Potential of Renewable Energy Technologies in Nepal, ton CO2e

Figure 6.8: Annualized Technology Investment Cost @ 10% interest rate, NRs/ ton CO2e

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Table of Contents

Executive Summary ....... 1

Acknowledgements ........ 3

Study Team ..... 4

Abbreviations and Acronyms .....5

List of Tables ....6

List of Charts and Figures ......7

1. Introduction ...9

2. Rationale ....9

3. Objective ....10

4. Methodology ....11

5. Climate Change Adaptation Analysis.. ....14

5.1. Climate change adaptation policy and programme ...14

5.2. Review and assess the contribution/role of renewable energy to climate change adaptation

...17

5.3. Major findings from the literature ......19

5.4. Role/contribution of RETs in adaptation and development Examples/cases ......24

5.5. Barriers for integration of RETs and adaptation ......35

5.6. Way forward .....37

6. Mitigation Analysis ......38

6.1. Relationship between Renewable Energy and Climate Change ..38

6.2. Energy System Development in Nepal......39

6.3. Greenhouse Gas Emission Evolution in Nepal ....43

6.4. Role of RET in GHG Mitigation Potential and Cost in Nepal .....45

6.5. Co-benefits of RET based GHG Mitigation ..52

References

Appendix

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1. Introduction

Alternative Energy Promotion Centre (AEPC) was established in 1996 with the objective of developing and

promoting renewable energy technologies with focus in rural areas of Nepal. Since then, AEPC has been

successfully implementing/executing several renewable energy programme/activities in Nepal. Nepal, along

with over 150 other nations, signed the United Nations Framework Convention on Climate Change

(UNFCCC) at the United Nations Conference on Environment and Development (UNCED) in Rio de

Janeiro in June 1992. Nepal ratified the Convention on 2nd May in 1994, and this convention came into

force in Nepal on 31st July, 1994. Subsequently, Nepals Initial National Communication was prepared in

2004 and shared with the Parties through the Convention Secretariat. Between 1996 and 2006, the then

Ministry of Population and Environment (now the Ministry of Environment, Science and Technology) was

designated as focal point to implement the provisions of the UNFCCC.

In 2011, the Climate Change Policy was formulated which specifically points the need of assessment of

ongoing and likely impact of climate change in natural resources, including water resources and other

economic sectors. One of the targets of the policy is to formulate and implement a low carbon economic

development strategy that supports climate-resilient socio-economic development by 2014. Similarly, the

Ministry of Science, Technology and Environment was entrusted as the Designated National Authority

(DNA) to promote Clean Development Mechanism (CDM) projects in the country. In July 2010, a Carbon

and Climate Unit (CCU) was established in AEPC with responsibility to carry out the activities related to

climate change and to tap carbon trade opportunities while promoting Renewable Energy Technologies

(RETs) in Nepal including provide technical support to the ministry on climate change mitigation as well as

adaptation.

From July 16, 2012 AEPC is executing a five years National Rural and Renewable Energy Programme

(NRREP) which has a single programme modality. It is envisaged that no other programmes or projects

related to renewable energy promotion in Nepal will be supported or executed outside the NRREPs

framework. The AEPC/NRREP is further committed to updating knowledge on Climate Change mitigation

and adaptation options; further development a well diversified portfolio of RETs projects using different

instruments and establishing high quality performance assurance and monitoring systems.

2. Rationale

Despite having only 0.4 percent of the total global population and being responsible for only 0.025 percent

of total GHG emissions in the world, Nepal is one of the most vulnerable countries in the world in context of

climate change. Nepal has experienced an average maximum annual temperature increase of 0.060C.

It has been identified that climate change has impacts on different areas including natural resources. On

the broad impact areas, vulnerabilities to energy resources can also be observed, for e.g. to the supply

potential of biomass energy resources (due to degradation in land use pattern, agriculture productivity,

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migration, loss of lives etc). It means that climate change has implications to the current and future energy

demand and supply chain of the country as well.

On the other hand, the reinforcement of adaptation and mitigation to climate change needs a strong effort

to shift toward a low-carbon energy pathway both in terms of the energy infrastructure and the energy

production and consumption patterns that would support continued countrys sustainable development

while lessening the level of its GHG emission increases. In this context, RETs may represent an important

way for the country to support adaptation and enhance development, representing a more ecological

mitigation pathway with emphasis on the introduction and use of clean and resource-efficient technologies,

social and environmental sustainability and improved social equity.

Given the high potential of RETs in Nepal to contribute to both climate mitigation and adaptation, it is

increasingly important to understand clear role of these technologies in addressing both issues. Energy

linkages with promotion of RETs are not explicitly defined but it is a fact that energy acts as a cross cutting

tool in every social and economic development. Role of energy hence should be identified both for

mitigation and adaptation processes and therefore contributing to building a resilient national capacity.

The NAPA, endorsed by the GoN in 2010, lists a priority adaptation options for Nepals Energy Sector.

However, to ensure effectiveness of the proposed options, it is imperative to have an understanding on how

RETs can and could contribute to climate change issues both in energy and other sectors. So,

AEPC/NRREP intending to conduct the study on role of renewable energy in climate change adaptation

and mitigation in Nepal has awarded the task to Centre for Energy Studies (CES)/ Institute of

Engineering/Tribhuvan University. It is envisaged that this study will further support the GoN in

implementing climate change policy, NAPA and existing and future relevant strategy and plan based on

quantified data on potential role of RETs in both mitigation and adaptation options.

3. Objective

The general objective of the task is to conduct research study to place Renewable Energy Technologies

(RETs) within the broader framework of climate change mitigation and adaptation options in the context of

Nepal.

The specific objectives of this task are to assess, identify and formulate suitable RETs adaptation and

mitigation interventions, innovations and technologies including potential regulatory and investment

mechanism in Nepal.

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4. Methodology

This study followed the standard framework as showed in Figure 4.1 for analyzing the role of renewable

energy technologies in climate change mitigation and adaptation options in Nepal. It involves intensive

literature review, conceptual model development, impact analysis, inception meetings and interaction with

stakeholders, presentation, review and documentation of the findings from this study.

4.1. Methodology for Mitigation Analysis

The mitigation analysis was focused on determining the role of RETs in GHG mitigation, quantitative

potential of GHG mitigation from selected RETs, technology investment cost and other co-benefits

associated with GHG mitigation options through deployment of RETs in Nepal. The study follows the

following steps for mitigation analysis.

a. Literature review on role of RET in climate change mitigation

An intensive literature review has been done on the evolution of energy consumption and GHG emission in

the past in the country, interrelationship between RETs and climate change mitigation, methodologies

followed by other studies for determining the GHG mitigating potentials, documentation of mitigation

potentials and values of the relevant parameters used in existing studies, and integrated relationship of

RETs and climate change mitigation with other socio-economic and energy environment effects.

b. Assessment of GHG mitigating potential from RETs

Based on the literature review, a standard accounting model was developed to analyze the GHG

mitigation potential and technology investment cost associated with it. Data collected from literature

review were used to determine the techno-economic potential of introducing different RET options for

GHG mitigation and investment cost requirement.

c. Documentation and Finding of the Analysis

The results obtained from the analysis were cross verified with other studies for maintaining the realistic

picture and thus help the policy makers during development, revision and implementation on the policy

related to the RETs and climate change the country. Documentation with detail analysis of the study has

been done and share among the stakeholders for getting feedbacks to be incorporated in the final version

of the report.

4.2. Methodology for Adaptation Analysis

Renewable energy technologies have a large potential to contribute to adaptation to climate change by

providing with a wide variety of socioeconomic and environmental benefits. However, the existing literature

has put much emphasis on the environmental benefits (including the reduction of GHGs), while

socioeconomic impacts have not received a comparable attention. These impacts include reduce work

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load, diversification of energy supply, enhanced development opportunities, creation of a small and cottage

industry, employment opportunities, enhance human health and increase efficiency in their day to day work.

These benefits have usually been mentioned, but their analysis has been too general and a focus on its

contribution on adaptation to climate change (both adaptation actions and adaptive capacity) has been

lacking. Hence, there is a need to explore further on an integrated conceptual framework to analyze the

relation between RETs and adaptation to climate change and generate as evidences for policy influence

and action. The study has employed following processes.

a. Review existing literature and develop an integrated conceptual framework

This study developed an integrated conceptual framework which allows a comprehensive analysis of the

impact of renewable energy on climate change adaptation and also document some evidences how these

technologies have been instrumental for adaptation to climate change.

The study served as a starting point for the development of a more in-depth and comprehensive analysis of

RETs and climate change adaptation in Nepalese context that is useful for defining a critical role of RETs

not only to mitigation but also for adaption to climate change.

b. Impact assessment of RET

Impact assessments are an existing tool which is being used widely. The same methods has been used to

assess the RETs development benefits and adaptation services. The assessment was mainly based on

secondary information/literature - stocktaking of current situations through extensive review of relevant

documents. Various literature at national and international level were gathered to review role/impact of

RET on peoples livelihoods (social and economic) and natural resources (environmental) management in

order to draw a conceptual framework. The study reviewed the role of RET on various aspect of people

livelihoods such as employment generation, household income generation, demographic impact,

educational / knowledge impacts, social cohesion and human development, income distribution, tourism

and endogenous resource at household and/or community level. The review also analyzes actors

involvement and contribution on national economy. The review also explore how these impacts at local

level will enhance the adaptive capacity of at community and household level and major components of

adaptive capacity may include, creation of asset based, support in developing institutions and entitlements,

generation of knowledge and information, supporting innovation, and maintaining flexible forward-looking

decision-making (based on the findings of ACCRAs consultative process).

In addition, some specific expert interviews have been carried to capture some the specific evidences and

critical assessment of RETs on climate change adaptation. These analyses were used to develop a

conceptual framework as well as impact assessment of RETs on development benefits and adaptation

services.

c. Analysis considering Nepalese context and generate learning

Based on the conceptual framework and impact assessment, some lesson has been drawn and some

recommendations were made which would be useful for decision and policy makers.

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The detail methodological steps/processes followed in this study is shown in Figure 4.1.

Figure 4.1: Methodological steps for the study

Preparation and Submission of

Inception Report

Identification of Key Components/aspects of the RET in

terms of synergies among RETs and Climate Change

Mitigation and Adaptation efforts, RET development providing

both development benefits and adaptation services,

Prepare a theoretical framework strategy for adaptation

analysis

Prepare accounting model for mitigation analysis

Generate evidences on how RETs contribute to Climate

Change Mitigation and Adaptation

Case studies

Draft report and sharing of key findings

Sharing of the Draft Reports for Comments

Revision and submission of final reports

Inception Meeting

Signing of Agreement between AEPC and CES

Review Relevant Literature

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5. Climate Change Adaptation Analysis

5.1 Climate change adaptation policy and programme

The Interim Constitution of Nepal of 2007 brings two articles on environment, related to the rights of citizens

and also the responsibility of the State. They include Article 16 Right relating to environment and health:

(1) every person shall have the right to live in a healthy environment and Article 35 (5) The State shall

make such arrangements as may be required to keep the environment clean. The State shall give priority to

the prevention of adverse impacts in the environment from physical development activities, by increasing

the awareness of the general public about environmental cleanliness.

There are a number of strategies, plans and policies relevant to climate change. Those include national

plans, climate change plan, sustainable development plan, environmental plan and other sectoral plans.

Some of the important plans and policies are discussed as below.

The National Conservation Strategy of Nepal (1988): This was the first important national strategies

which provided a new conservation friendly development processed and aimed to satisfy the basic needs of

the people of Nepal (whether material, spiritual or cultural); to ensure the sustainable use of Nepal's land

and renewable resources; to preserve the biological diversity of Nepal in order to maintain and improve the

variety and quality of crops and livestock and to maintain the variety of wild species both plant and animal;

and to maintain the essential ecological and life-support systems such as soil regeneration, nutrient

recycling and the protection and cleansing of water and air. The strategies had emphasized the role of

renewable resources including energy in development process.

Sustainable Development Agenda for Nepal (SDAN) (2003): The SDAN provides a national vision for

integrating the environment and development into the national policy- making and planning framework, and

which also identifies environmental conservation as an integral component of poverty alleviation and of

sustainable social and economic growth. The agenda was formulated to guide and influence national level

planning and policies up to 2017. The agenda draws upon and is in conformity with the longer term goals

envisaged in the Ninth and Tenth Plans, Poverty Reduction Strategy Paper, the Millennium Development

Goals, and commitments made by the country in various international instruments including the United

Nations Framework Convention on Climate Change (UNFCCC).

The Three Year Approach Papers for 2010/11 to 2012/13 identified policy priorities on environment and

climate change, with emphasis on environmental management, through a series of decentralised

programmes and collaborations between the GoN and NGOs. It also looked to strengthening institutional

capacity and to internalising environmental management issues in development planning. The Plan had a

target to provide electricity access to rural people by producing an additional 15 MW capacity from micro-

hydro schemes.

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The Climate Change Policy of 2011 (GoN, 2011) was the most important documents that helped to

institutionalized and provided overall guidance for climate change concerns (mitigation and adaptation).

The policy has been formulated to integrate and mainstream activities in development and poverty

alleviation alongside climate change.

The goal of adopting this policy was to improve livelihoods by mitigating and adapting to the adverse

impacts of climate change, adopting a low-carbon emissions socio-economic development path and

supporting and collaborating in the spirits of country's commitments to national and international

agreements related to climate change. Alongside enactment of this Policy the GoN also intends to

formulate and implement by 2014 a low carbon economic development strategy supporting climate-resilient

socio-economic development. The policy has emphasized to promote renewable energy for adaptation and

mitigation. The policy also highlighted a need to work on technology development to moderate impact of

climate change.

National Adaptation Programme of Action (NAPA 2010): The National Adaptation Programme of Action

(NAPA) was submitted to the UNFCCC in November 2010 once it is approved by the government. It was

designed in consideration of national development goals in which the priorities were in the areas of

agriculture and food security, water resources and energy, forests and biodiversity, public health, urban

settlements and infrastructure, and climate-induced disasters.

The intensive work of the NAPA TWGs along with the vulnerability assessments resulted with a long-list

of adaptation options under each theme. Based on a multi-criteria analysis, most urgent and immediate

climate adaptation actions were identified also considering the national needs. Realizing a strong

convergence between several of the most urgent and immediate priority projects identified by individual

TWGs, nine combined project profiles were priortized. Although the energy issues was important

component of the plan, the potential role that RETs that can play in adaptation and resilience was not

adequately explored during the plan preparation and designing stage. Hence promotion of renewable or

alternative energy however, did not get adequate attention in NAPA.

Local Adaptation Plans of Action (LAPA 2011): Local Adaptation Plans of Action (LAPA) framework

have been approved by the government of Nepal (in Nov 2011) aiming to connect the national perspective

of the NAPA to communities. The main purposes of LAPA are to enable communities to understand the

changing and uncertain future climatic conditions and engage them effectively in the process of

developing adaptation priorities; implement climate-resilient plans that are flexible enough for

responding to changing and uncertain climatic conditions; and inform sectoral programmes and

catalyse integrated approaches between various sectors and sub-sectors. The LAPA has considered the

role of renewable energy both for mitigation and adaptation and the local plans have considered renewable

energy sources as important mechanism for local level climate resilient intervention.

The approach paper of the thirteen plan (2070/71 to 2072/73) has also prioritized climate change

adaptation as one of the important aspect of development. Hence, the paper has emphasized to adopt

16

green development approach to make human activities and development process environment friendly, and

to make them climate adaptive. One of the strategies proposed to achieve this objective was to carry out

climate change adaption while ensuring disaster risk reduction and poverty reduction.

The plan has prioritized energy as an important component for development. Renewable energy has been

as important vehicle for development especially in the rural area where emphasized to a) research and

technology transfer; b) manage resources (internal and external including resources from carbon trade) to

promote RETs; c) promote research and development based on energy efficiency approach. The plan has

proposed to continuous promotion micro-hydro, solar, bio-energy and wind energy, support to local

government instuitions to plan, implement, monitoring and evaluation for effective management of RETs,

promotion of bio-gas, ICS, bio-briquette, promotion of wind energy to lift water in Tarai among others. It is

expected that during the planning period about 15 MW energy will be produced from micro-hydro whereas

6 MW and 1 MW energy will be produced from solar and wind respectively. During this period, about

11,000 additional employments will be created through RETs and RETs related enterprise.

There are other policies and strategies which are related to climate change issues. Some of them the

National Conservation Strategy of 1988, the Master Plan for the Forestry Sector of 1989, the

Environmental Policy and Action Plan (1993), the Agriculture Perspective Plan (1995), the Water

Resources Act (1992), Water Resources Strategy (2002), National Agriculture Policy (2004), the Forest

Sector Policy of 2000, biodiversity strategies (2002). Some of the important policies are briefly described as

below. Although Nepal became party to the UNFCCC in 1994, these plans and strategies have not

categorically paid necessary attention on the issues of climate change.

Climate Resilience Framework (2011): The NPC (March, 2011) has proposed a climate resilience

framework for government adaptation and mitigation planning, within which it has developed a

screening approach for projects. The climate resilient plan a long term planning tools for adaptation

(2011) was developed by NPC with a vision of achieving a society and economy that is resilient to a

changing climate. The framework broadly recognizes various issues of climate change, including its drivers

(energy, transport, land use, forestry, agriculture and waste) and impact vulnerability (ecosystem,

biodiversity, food security, human health), and outlines mitigation and adaptation measures to achieve its

fundamental goal of sustainable development under the felt and anticipated climate scenarios. The

framework also identifies cross-cutting issues (knowledge management, capacity building, gender,

research and development) that are crucial for the effective implementation of climate-resilient development

interventions in order to realize the nations development vision.

As a part of the commitment to UNFCCC to share information with other members, Nepal has submitted

first national communication in 2004 and the second national communication is in the process of

finalization. These communications showed very less per capita GHGs from Nepal and highlighted the

need for adaptation. There are some initiatives on going or in the process of preparation which have some

link with climate change adaptation and renewable energy management. They include REDD plus, national

17

conservation, revision of National Biodiversity Strategies and Low carbon economic development

strategies. The MoSTE is currently engaged in preparing a Technology Need Assessment.

Energy Policies

Nepal, currently have the following sets of documents related to the RET:

Rural energy policy

Rural energy subsidy policy and subsidy delivery mechanism

Renewable energy perspective plan (REPPON) 2000-2020 (Draft)

There is no Renewable Energy (RE) Policy in Nepal. Nepal has only Rural Energy (RE) Policy (2006), that

is just to address the rural need and rural energy demand and thus it is only reason specific. It has no

linkage for addressing renewable energy as a whole for meeting energy demand also of industries and

commercial sector beside domestic application.

The Rural Energy Policy (2006) intends to streamline energy supply to the rural areas through rationale use

of RETs. This document is again a set of general statements without any specific targets, goals and

approaches.

The policy specifically targets the installation of improved biomass technologies to meet cooking and

heating needs, off-grid micro-hydro for rural electrification capable of being grid-connected when the grid is

extended, solar PV home systems (10 Wp and above) and white-LED and photovoltaic-based solar lights

replacing kerosene lamps. The approach is to move away from per-kW subsidy to per-household subsidy.

The program of small solar systems, based on small photovoltaic and white-LED as an immediate and

intermediate solution will be more affordable to the poor. The policy recognizes solar PV home systems as

a mainstream electrification option for many rural areas, where grid connection and micro-hydropower are

not an option for the foreseeable future.

But policies related to energies did not consider climate change adaptation issues despite some obvious

linkages.

5.2. Review and assess the contribution/role of renewable energy to climate change adaptation

Background

Climate change has multi-dimensional impacts on human society, ecosystems and development and they

can be direct and indirect, short term and long term. Temperature rise and precipitation pattern change and

other climate variability affect both peoples livelihoods and ecosystems. Various studies including NAPA

and SPCR showed that the impacts are mounting over the years, and adaptation to climate change is now

an urgent development need globally. Of the 16 countries listed globally as being at extreme risk from

climate change over the next 30 years, Nepal falls in fourth position based on the Climate Change

18

Vulnerability Index, compiled by a British-based global risks advisory firm, Maplecroft1, with poverty and

adaptive capacity being some of the key determining factors in the ranking2. Due to high level of climate

risk exposure and low adaptive capacity in Nepal necessitate climate change adaptation actions to

moderate climate change impacts.

It is unequivocal that renewable energy contributes to managing climate change. Renewable energy

technologies that do not emit GHGs [greenhouse gases] are an important and viable source for climate

change mitigation. Recent studies also suggested that the renewable energy technologies are better

source for adaptation to climate change and reducing the multi-dimensional aspects of poverty. But, so far

emphasis is given, especially at international level, on the contribution of RETs on mitigations and all

international financing are geared toward mitigation whereas the role RETs for adaptation are consistently

shortchanged.

Adaptation is a priority for developing countries and the role of RETs on adaptation and poverty alleviation

has been recognized. The Eighth Conference of the Parties (COP-8) to the United Nations Framework

Convention on Climate Change (UNFCCC) in New Delhi in November 2002 provides a useful starting point

for examining the critical role RETs that can play in addressing poverty alleviation and sustainable

development aspirations of developing countries.

The contribution of RETs on global development agenda, i.e. MDGs, is also being examined. For example,

the International Energy Agency (IEA) described energy as the essential ingredient of all three pillars of

sustainable development: economic, social and environmental and it is key to the realisation of the MDGs

(IEA: 2008, 6) where as a United Nations report argued that access to energy services, especially for the

poorest communities, is essential to achieve all of the MDGs and should be integrated into all national

poverty reduction strategies (UN: 2005).

In Nepal, the relations between RETs and adaptation have not been studied properly, there are, however,

some studies carried to document impacts of RETs on various aspects of peoples livelihoods and poverty

which are directly or indirectly connected with the attributes of adaptation, adaptive capacity and

development. Hence, this study aims to explore linkages and document contribution of RETs on adaptation

and poverty reduction in Nepal. It is expected that the finding will provide an agreeable framework to study

further and furnish broader understanding on how RETs can be an instrumental option to design and

implement effective adaptation measures in Nepal.

1 http://www.maplecroft.com/about/news/ccvi.html/ 2 The Climate Change Vulnerability Index evaluates 42 social, economic and environmental factors to assess national

vulnerabilities across three core areas. These include: exposure to climate-related natural disasters and sea-level rise; human sensitivity, in terms of population patterns, development, natural resources, agricultural dependency and conflicts; thirdly, the index assesses future vulnerability by considering the adaptive capacity of a countrys government and infrastructure to combat climate change. According to Maplecroft, the countries with the most risk are characterised by high levels of poverty, dense populations, exposure to climate-related events; and their reliance on flood and drought prone agricultural land.

19

5.3. Major findings from the literature

Conceptualizing the relations

Assessing contribution of RETs on climate change adaptation and sustainable development are in evolving

stage in Nepal so it is important to understand the conceptual basis of adaptation, sustainable development

and renewable energy. A brief conceptual analysis is presented below.

Adaptation

Adaptation is a term that is understood differently by different practitioners. Adaptation in the context of

human dimensions of climate change can be defined as a process, action or outcome in a system

(household, community group, sector, region or country) in order for the system to better cope with,

manage or adjust to some changing conditions, stress, hazard, risk or opportunity (Smith & Wandel 2006).

The IPCC definition of adaptation elaborates further: adaptation describes the adjustment in natural or

human systems in response to actual or expected climatic stimuli or their effects, which moderates harm or

exploits beneficial opportunities (IPCC, 2007).

McGray et. al. (2007) has identified a continuum of ways in which climate adaptation has been addressed

by different actors. They placed all adaptation measures on a continuum where the impact- and

vulnerability approach represent the two extremes. On the one side of the continuum, the most

vulnerability-oriented adaptation efforts overlap almost completely with traditional development practice,

where activities take little or no account of specific impacts associated with climate change. On the other

side, highly specialized activities exclusively target distinct climate change impacts, and fall outside the

realm of development. In between lies a broad spectrum of activities with gradations of emphasis on

vulnerability and impacts. The continuum can be roughly divided into four types of adaptation efforts and

they include:

Table 5.1: Continuum of adaptation (vulnerability to impact approach)

Continuum Addressing drivers of

vulnerability

Building response capacity Managing climate risk Confronting climate

change

Examples activities that increase

human development and

address drivers of

vulnerability, e.g.

diversification of

livelihoods

activities that aim at building

response capacities through

capacity building (knowledge

and skill), integration in

planning e.g. adaptive

management, monitoring and

DRR

activities that reduce

climate risks in affected

sectors, e.g.

reforestation and other

measures related to

natural resource

management

activities that confront

climate change by

addressing concrete

impacts, e.g. reducing

the risks from GLOF

from Tsho Rolpa lake

Climate risk: Climate risk has been defined as any added risk to current ways of securing well-being

resulting from climate change (Eriksen & OBrien 2007). Climate risk is related to the direct physical

impact of climate variability and change on individuals and communities, through the exposure to stress

20

and crisis as a result of climatic challenges, as storms and drought. Other examples are changes in rainfall,

increased tropical cyclone activity and instability of winds.

Vulnerability: The second dimension of climate adaptation is vulnerability reduction. Vulnerability can be

defined as the social and ecological contextual conditions that result in inability to cope or secure well-

being in the face of climate variability and change (Eriksen et al. 2007). Vulnerability can be generated by

several processes and factors, such as social relations of resource access, political and economic

marginalization, loss of employment opportunities, and weakening social networks (Eriksen et al. 2007).

The consequences of climatic challenges are influenced by the vulnerability of the people affected and the

vulnerability context is closely related to environmental, social and economic possesses. Examples of

processes or factors leading to vulnerability to climatic challenges can be lack of alternative income-

generating activities, poor health facilities and lack of sufficient infrastructure.

Adaptive Capacity

The third dimension of adaptation included in this framework is increased adaptive capacity. It generally

refers to the degree to which individuals or groups can adapt to risk at any given time. It is considered that

one way to enhance adaptation is by building adaptive capacity. According to IPCC, adaptive capacity is

the ability of a social-ecological system to be robust of the disturbance faced by the systems and the ability

of a system to adjust to climate change (including climate variability and extremes) to moderate potential

damages, to take advantage of opportunities, or to cope with the consequences (IPCC, 2007). Adaptive

capacity is related to resources that people both have within themselves such as skills and knowledge and

resources they have access to, including peoples access to resources, power, information, education,

technology, social networks and insurance.

Adaptive capacity is shaped by multiple factors. Determinants for adaptive capacity are also categorized

based on their nature of origin. They are generally categorized as asset based and process/functions

based (WRI, 2009). The assets based includes different kinds of assets that people or community may

have such as physical, financial, human, natural and social (related to substantive sustainability) where as

functions based include different processes such as planning process, learning and governance

(procedural sustainability).

According to OECD (20093), adaptation can mean one or a number of the following (table 2) based on their

strategy/purpose of adaptation:

3 OECD Organisation for Economic Co-operation and Development 2009: Integrating Climate Change Adaption

into Development Co-operation.

21

Table 5.2: Adaptation based on purpose

Strategy Example

Share losses Support from extended family, insurance, or social programmes

Modify threat Change in the management of dykes and dams to modify flood patterns

Prevent impacts Redistribution of water to avoid scarcity

Change use Change crops or soil management

Change location Relocation of settlements or economic activities

Research Improve seed research

Change behaviour and rules Rainwater harvesting; conservation

(Source: OECD 2009)

Sustainable development

The concept of sustainable

development, which first entered

(in 1987) into political debates

after the World Commission on

Environment and Development

(WCED) had released a report

on Our Common Future. The

Commission defined

Sustainable Development as

development that meets the

needs of the present without

compromising the ability of future

generations to meet their own

needs.

A plethora of literature is

available on sustainable

development. Munshinge &

Shearer (1995) proposed a

simplified figure to understand the sustainable development (Figure 5.1). The figure showed main

dimensions of sustainability and their interrelationships.

Figure 5.1: Sustainability dimensions and their interrelationships

Source: Munshinge & Shearer (1995)

22

Sustainable development and adaptation

Sustainable development and climate change are closely linked with each other. The adverse impacts of

climate change are among the contributory factors why sustainable development efforts of the developing

countries are not successful as expected. This challenge, however, can be addressed if climate change

adaptation strategies are mainstreamed in sustainable development plans of the country (Huq et al., 2003).

Following the release of the IPCCs Fourth Assessment Report, it has become increasingly apparent that

climate change will have far reaching consequences for poverty reduction efforts including the achievement

of the Millennium Development Goals (MDGs).

There are two distinct perspectives on how to approach adaptation in developing countries: one focuses on

responding to specific predicted climate impacts and managing risk (for detail see Schipper, 20074 and

McGray et al. (2007)). The other is more concerned with reducing vulnerability and building resilience and

adaptive capacity. Between these two extremes is a continuum of interventions from pure adaptation

measures on the one hand to pure development activities on the other. In practice, most interventions fall

somewhere between these two extremes. It is increasingly recognised however that successful adaptation

will require interventions which address the range of challenges along the whole spectrum i.e. all three

dimensions of sustainable development to be effective and moderate the impact of climate change both in

short and long term5.

Renewable energy and its role in development /adaptation

The literature provides several definitions of RE. Twidell and Weir (20066) define RE as energy obtained

from the continuing or repetitive currents of energy occurring in the natural environment. The Dictionary of

Energy edited by Cleveland and Morris (20067) says renewable energy is any energy source that is

naturally regenerated over a short time scale and either derived directly from solar energy (solar thermal,

photochemical, and photoelectric), indirectly from the sun (wind, and photosynthetic energy stored in

biomass), or from other natural energy ows (geothermal, tidal, wave, and current energy).

The most important RETs in the context of Nepal are related to micro hydropower, biomass energy (biogas,

briquettes, improved cook stoves), solar energy (solar water heaters, dryers, cookers, generators and

pumps), wind energy (wind turbines, windmills). These RETs have a large potential to contribute to the

sustainable development (SD) of specific territories by providing them with a wide variety of socioeconomic

and environmental benefits (Rio and Burguillo, 2008). The IPCC (2012) revealed that RETs offer the

opportunity to contribute to a number of important SD goals: (1) social and economic development; (2)

energy access; (3) energy security; (4) climate change mitigation and the reduction of environmental and

4 Climate Change Adaptation and Development: Exploring the Linkages Tyndall Centre for Climate Change Research Working

Paper 107 5 http://www.gsdrc.org/go/topic-guides/climate-change-adaptation/understanding-climate-change-adaptation-as-a-

development-issue#development 6 Twidell, J., Weir, T., 2006. In: Renewable Energy Resources. Taylor & Francis 601pp. 7 Cleveland, C.J., Morris, C. (Eds.), 2006. Dictionary of Energy. Elsevier 502pp.

23

health impacts. According to Rio and Burguillo (2008), RETs can be a good approach for contributing local

sustainability. RETs can contribute to reduction of local and global pollutions (GHGs emissions), increasing

employment, improving asset base (i.e. social/cultural and human) at household level, improving quality of

life, increase household income and reducing vulnerability, among others.

Based on the analysis, RETs have following characteristics which are becoming an inevitable for

adaptation and sustainable development. They include:

1. They produce less or no GHGs.

2. Most of the RE technologies can be deployed at the point of use (decentralized) in rural and urban

environments. These technologies serve the local needs especially the need of women and

vulnerable groups.

3. Most of RETs are technically mature, proven and manageable. Deployment of RETs has been

increasing rapidly.

4. RETs benefits are helpful to reduce households and community vulnerability.

5. RETs benefits are effective tools that is very likely to contribute to enhance adaptive capacity of

people

6. RETs can be directly used for adaptation activities

7. RE technologies, in particular non-combustion based options, can offer benefi ts with respect to air

pollution and related health concerns

Conceptual framework role of RETs for climate change adaptation and development

Three theoretical directions (i.e. climate change, sustainable development and renewable energy) have

been used to constitute the conceptual framework, since they are found to be complimentary so that they

can work together as tools for analyzing different aspects the role of RETs on adaptation (Figure 5.2).

Source: authors analysis (adapted from many sources)

Figure 5.2: A heuristic model of relations of RETs, adaptation and development

24

Sources: authors own elaboration based on different sources

Figure 5.3: Conceptual framework of nexus of RETs, adaptation and development

For instance, RE provides energy for water pumping and post-harvest processing, which in turn provides

new water resource management options and livelihood opportunities. Better lighting expands educational

opportunities, improved health condition of human being, reduced exposure to indoor air pollution, reduced

the drudgery of women and enhance livelihood options. Collectively these interactions contribute to poverty

reduction and increased adaptive capacity for climate change. Adaptive capacity also reflects the resilience

of communities to variability, and change (including but not limited to climate change) and is a function of

environmental, social and financial assets and the ongoing capability to transform these assets into human

well-being (Figure 5.3).

5.4. Role/contribution of RETs in adaptation and development Examples/cases

RETs support to adaptation climate change and sustainable development. Literatures reviewed during the

study provide following examples.

Impact on Environmental services

The exact type and intensity of environmental impacts varies depending on the specific technology used,

the geographic location, and a number of other factors. By understanding the current and potential

25

environmental issues associated with each renewable energy source, RETs can effectively avoid or

minimize these impacts of reducing pollutions (GHGs and others) and provide other environmental benefits

such as reducing indoor air pollution and toxic materials. The sun, for example, provides a tremendous

resource for generating clean and sustainable energy sources (which can be used for electricity, cooking,

water and space heating) and soalr based technologies produce no GHGs and other toxic materials. Use of

solar energy for cooking will help to manage the bio-resources sustainably.

Some of the specific examples are documented by IISD (2004).

REs contribute to the management of biodiversity and ecosystems by lessening pressure on

natural forests in several important ways. For example: REs improve agricultural productivity by

providing energy for irrigation pumping and postharvest processing. These productivity

improvements can in turn reduce pressure to convert forest to agricultural land otherwise required

to maintain or increase productivity.

REs such as renewably-generated electricity for household lighting or the introduction of improved

cook-stoves/bio-gas to make more efficient use of traditional biomass all limit the exposure to the

air pollution and toxic products of traditional biomass combustion. In the rural areas, traditional

biomass provides almost all primary energy demands, the largest use of which is for cooking.

Despite the widespread perception that the worst air pollution occurs outdoors in urban areas, the

most severe chronic exposure to airborne pollutants occurs among rural women and children from

indoor sources due to biomass combustion in primitive, inefficient stoves.

REs reduce and mitigate climate variability and change. REs do not emit greenhouse gases, or in

the case of sustainably harvested bioenergy is carbon-neutral; the next generation of biomass

sequesters CO2 equivalent to that released on combustionbut still permanently displaces

competing fossil fuels.

The carried out by UNDP (2008) and AEPC (2009) also suggested that RETs are contributing to

environmental services. An evaluation study carried out by Khanal (2012), for example, in Ladakha India

showed a positive contribution on environment. The project also played an important role in conserving

environmental/natural capital. The reduction of biomass consumption, both for cooking and heating, has

had a positive impact on the environment as it reduced carbon dioxide emission. The project report

revealed that about 1.37 MT of biomass was saved by one household each year. In addition, the project

also helped to reduce carbon dioxide emission. The record showed one household helped to sink 2.16 MT

of CO2 per year.

26

Impact on socio-economic development

A UN organization report on Energy for Sustainable Future (2010) argued that clean, efficient, affordable

and reliable energy services are indispensable for global prosperity. Developing countries in particular need

to expand access to reliable and modern energy services if they are to reduce poverty and improve the

health of their citizens, while at the same time increasing productivity, enhancing competitiveness and

promoting economic growth. Another report published by UNDP and the World Bank (Modi et al., 2005)

also argued that Energy services are essential to both social and economic development and that much

wider and greater access to energy services is critical in achieving all of the Millennium Development

Goals.

Recent studies showed positive impacts on various socio-economic aspects that are necessary to

improvement of peoples livelihoods. Following cases showed positive contribution of RETs on income

generation, health, hygiene, education, soil water conservation, environment, gender, human capital,

social capital, local employment, endogenous technology, social/community work, food security and energy

security (see following case studies). These services helped to reduce the vulnerability, enhance adaptive

capacity, improve livelihoods, and enhance ecosystems health and resilience.

Case no. 1: Reddy et al. (2006) analysed the impact of small hydro on the local sustainability of regions in

the North of India and identified the impact of RES on the different components of local capital which make

up their sustainability framework: financial, natural, social, physical and human. Among the socioeconomic

benefits resulting from the deployment of RES, they find the reduction of migratory flows from rural to urban

areas, the creation of local employment opportunities (by improving access to electricity) and local capacity

building. However, there are positive but modest impacts on local income.

Case no 2: A case study (DA, n.d.8) conducted by Development alternatives in Uttar Pradesh, Rajasthan

and Bihar in India related to Impacts of RET/Solar power innovation model showed various positive impacts

in education and skill development, gender concerns, renewable energy based enterprises. The result

showed that a flour mill of 3 horsepower was operating from electricity generated from the solar power plant

which helped to improved health and sanitation in the village contributing to enhancing the livelihoods of

participating communities. Environmental benefits are also very much evident. The power generated from

the biogas plant is used to provide energy services to supply drinking water, irrigation and running of micro-

enterprises like milk chilling plant, flour mill, oil expeller and spice grinding which were otherwise operated

by diesel/coal.

Case no 3: The case study in Bhumlichok, VDC Gorkha Nepal by Shrestha (2012) showed that improved

access to clean and renewable sources of lighting and cooking energy have positive health impacts on

communities and reduced expenditure on fossil fuels. It is found that on average, a project participant

8 Development Alternative (n.d.) MITIGATION AND ADAPTATION INFORMATION NETWORK FOR SUSTAINABLE COMMUNITIES DECENTRALIZED RENEWABLE ENERGY IN INDIA, A Compendium of Case Studies (available at

http://www.grida.no/files/activities/greeneconomy/case-studies-da-india.pdf)

27

household annually saves 44 liters of kerosene for the household lighting, which means annually the

household members, especially mothers and children are less exposed to carbon dioxide emission by 110

kg CO2, as compared to the non-participant households. In terms of money, annually a project participant

household saves an average amount of NPR 4,111 (40 Euro) by reducing the consumption of 44 liters of

kerosene, 187 numbers of wax candle and 16 numbers of dry cell batteries. The survey results indicated

that the majority of project participant households use improved cooking stoves (71%). It has provided

access to gravity goods ropeways for the same purpose. That means, improved access to renewable

energy technologies helped the project participant households to reduce labor burden and increase the

availability of free time to engage in household and agricultural activities.

Case 4: Case studies from East Africa (Kenya) and other parts of Sub-Saharan Africa (Niger, Zambia and

Zimbabwe) (AFREPREN, 2011) showed that, by using animate energy-driven treadle pumps instead of

bucket irrigation, farmers can increase irrigated land, reduce work time, improve crop quality, grow new

crops and increase the number of cropping cycles. Treadle pump technology has enabled poor rural

farmers, especially women, to increase their incomes by selling surplus produce in the local market. As

treadle pumps usually reach water only within seven meters, they do not deplete valuable groundwater

resources. If pumps are produced locally, they can also create jobs and income.

Case 5: Micro-hydro Energy to fight poverty: In Pinthali, Mangaltar VDC, Kavre an improved water mill used

for milling grain also produces up to 12 KW of electricity for lighting 120 households. The scheme is run by

a cooperative, which collects a fee from each household and invests its profits in education, agriculture and

to promote small businesses, such as poultry farming. Women literacy was also possible due to availability

of electricity during the night time.

Case 6: Solar Energy (in Humla, Nepal): Solar greenhouses for community or family use offer a real

prospect for improved food security and nutrition. The intervention has also helped to improve family

income. The overall outcome of introducing solar greenhouses into the isolated villages of Humla, found

that food security and quality of life of the participating people were enhanced (Fuller and Zahnd, 2012).

Case 7: Passive Solar energy project in Ladakh, India: An evaluation of passive solar energy project in

Ladakh India (Khanal, 2012) showed that solar technologies helped to improve the quality of life of people,

increase energy access and reduce the vulnerability of communities especially women group. The main

outcome was improving room temperature in winter. The average minimum indoor temperature in a

(passive) solar house was reached to 5C when temperature outside the house was -15C so creating a 20

C temperature difference. Household fuel consumption was reduced on average by 50%. The fuel

collection time was reduced by half and some villagers used - saved time for productive activities such as

daily wage labor or social networking. The health risks related to cold and indoor air pollution were found to

be reduced significantly. Diseases like arthritis and cough, for example, were reported to be less prevalent

and number of visits to doctors and/or Amchi was reduced after the introduction of the solar technology.

Women, who spent most of their time within the house, were mostly benefitted. The solar technology

28

intervention helped to reduce buying traditional fuels (timber, LPG gas) and saving about 50 Euros annually

per household.

Table 5.3: Benefits of rural electrification to MH connected households

Outcome variable MH-Connected

HHs

Nno-MH HHs Difference Propensity Score

Matched

Difference

Economic

Non-farm income

(Rs/capita/month)

865.2 629.2 0.353

(2.53)**

0.112

(1.91)*

Expenditure

(Rs/capita/month)

1456.2 1263.1 0.039 (1.92)* 0.090 (3.26)**

Education

Schooling years

completed

Girls completed

schooling years

4.28 3.73 0.551

(1.97)*

0.240

(1.65)**

Evening study

(mins /day)

Boys time spent in

evening study

(mins/day)

50.1 33.9 16.2 (3.63)** 7.7 (2.32)**

Girlss time spent in

evening study

(mins/day)

39.7 30.0 9.7 (2.19)** 12.0 (5.06)**

Health

Adult womens

respiratory

problems

5.1 9.7 -4.62

(2.19)*

-3.4 (-3.22)*

Boys respiratory

problems

1.4 5.1 - 3.63 (-1.75)* - 1.6 (-2.28)**

Girls respiratory

problem

1.3 8.2 -6.90 (-1.93)* -6.1 (-2.82)**

Girls

gastroinstestinal

(GI) problems

0.3 1.7 - 1.40 (-0.87) - 1.43 (-1.71)

29

Outcome variable MH-Connected

HHs

Nno-MH HHs Difference Propensity Score

Matched

Difference

Womens fertility and empowerment

Contraceptive

prevalence rate

0.744 0.718 0.026 (0.59) 0.038 (2.78)**

Time-use in

Income generating

activities

(hours/day)

5.81 5.54 0.27 (1.99)** 0.19 (1.97)*

Study time

(hours/day)

0.96 0.79 0.17 (1.13) 0.20 (1.86)

Independence in

mobility

Type 1

0.569 0.354 0.215 (4.12)** -0.013 (- 0.36)

Independence in

decision making in

fertility issues

0.844 0.726 0.117 (2.44)** 0.042 (1.85)*

Independence in

decision making in

childrens issues

0.942 0.921 0.021 (0.70) 0.027 (2.40)**

Table 5.4: impacts of RETs on Poverty Reduction Indicators

Poverty Reduction

Indicators (PRI)

PRI in Household

sector

PRI in Industrical

Sector

PRI in

Commerical

Sector

PRI in Social

Sector

Security (income

emplyment credit)

MH, Solar, BT,

ICS,

MH Solar, BT MH Solar, BT MH, Solar, BT,

ICS

Knowledge and

information

MH, Solar MH, Solar, BT,

ICS

Health MH, Solar, BT,

ICS

MH, Solar

Drudgery reduction MH, BT, MH

Empowerment/inclusion MH, BT, ICS MH, ICS

Gender equity MH MH, Solar, ICS

Access to services MH

Environmental

sustainability

BT, ICS

Source: Nepal (2005)

30

Case 8: Power and People the World Bank study in Nepal: A study on micro-hydro by the World Bank

(20119) carried out reported that households having MH have got a wide range of benefits and they include

economic, education, health and womens empowerment. MH access increased households non-farm

income by 11 percent and consumption expenditure by about 6 percent. Girls completed schooling years to

up to 0.24 grades because of MH connectivity. Women and children from the MH households suffer less

from respiratory problems than their counterparts from non-MH households. Womens contraceptive

prevalence, involvement in income generating activities, and decision-making independence all go up

because of the MH connectivity. The table 5.3 below provides impact of micro-hydro on peoples socio-

economic aspects.

Case no 9: Role of RETs on Poverty Reduction: A study carried out by Nepal (200510) also showed a link of

RETs with poverty reduction in Nepal. He reviewed the contribution of selected RETs against poverty

reduction indicators. A brief sysnopsis of RETS i.e. micro hydro (MH), Solar power (solar), Biogas

technology (BT), and improved cook stove (ICS) (Table 2.4).

Case 10: Impact of Solar PV Home System: The impact study carried oub by AEPC (201011) with the

support from Samuhik Aviyan estimates of solar house systems (SHS) on access to information, it is

evident that SHS has had an important role in increasing access to information for rural households where

there is no regular supply of electricity. This helps in the empowerment of the rural people. Education is

another sector where SHS has had significant impact. Students with Solar PV Home System are 15

minutes more likely to study every day than without SHS, with the magnitude of the impact different for

male and female students. This figure justifies the 2 more percentage secured by students in their exams.

Findings show that with Solar PV Home System, passing rate increases and school dropout rate

decreases. Impact on farm income and income through own business is estimated separately. SHS is likely

to increase the probability of initiating own business by 3 percent.

9 Banerjee, S. G., Singh, A., and Samad, H (2011). Power and People The Benefits of Renewable Energy in Nepal. The world Bank. Kathmandu (http://www-wds.worldbank.org/) 10

Study on Analysis of Rural Energy Programms with Respect to Their Linkages with Poverty Reduction, 2005 11 Socio Economic Impact Study of the User of Solar Home System

31

Sources: mainly authors interpretation

Figure 5.4: Impacts/role of RETs on economic, social and environmental aspects

Case 11: Impact on Gender: Mahat (2004) and Mahat (2006) analysed the role / impact of the RETs on

gender issues. The studies showed a positive implication of the Micro Hydro Plant (MPH) for the

households in terms of saving womens labor and time. There was a good family atmosphere in many

households because of the positive attitudes of men and women towards womens mobility, empowerment

and development. She also reported, biogas plants have more positive implications such as a reduction in

womens work load in collecting firewood and cleaning up the house after getting a biogas plant.

Case 12: Impact on Inclusion: RETs is a small form of investment and technologies attract or provide

enabling environment for income and employment generation of less-favoured (poor) individuals. So, by

default decentralized RETs favors poor people. This help to reduce the income differentials which has a

positive impact on local sustainability. Therefore, it is desirable that the project leads to income and

employment generation of less-favoured individuals.

The case studies showed that RETs can provide various benefits or impact on human and ecosystems. An

example of solar based irrigation and food processing through RETs is depicted in the following Figure 5.4.

32

Impact of RETs on MDGs

The provision of renewable energy services is described by the International Energy Agency (IEA) as being

the essential ingredient of all three pillars of sustainable development: economic, social and environmental,

it is key to the realisation of the MDGs (IEA: 2008, 6) while a United Nations report argues that access to

energy services, especially for the poorest communities, is essential to achieve all of the MDGs and should

be integrated into all national poverty reduction strategies (UN:2005, 2). The IEA (2008) estimates that

modern energy services will need to be provided to an additional 700 million people worldwide in order to

meet the Millennium Development Goals for poverty reduction in 2015.

Table 5.5: Likely impacts of scaling up the REDP MHS project in Nepal

Area MDG Likely impacts

Poverty

1 About 1.2 million households in rural and remote areas could earn an

additional $0.33/day

Education 2 The chance of children entering secondary school increases more than

fourfold

Gender 3 The chance of girls entering secondary school increases more than sevenfold

Health

4, 5 & 6 Enhances household sanitation and increases number of health staff available

in health centres who can provide more and better quality health services to

the population

Environment 7 Reduced pollution due to 80 per cent reduction in kerosene consumption and

85 per cent reduction in use of dry-cell batteries

Global

Partnership

8 Increases access to information and communications technologies that can

facilitate development of partnerships and dialogue

Source: GoN/UNDP (2011)

Nepal is making notable progress on the Millennium Development Goals (MDGs), yet disparities between

social and economic groups and regions remain significant. It has been difficult to reach the poor and those

living in remote and inaccessible areas, where delivering services is especially difficult. GoN has accorded

importance. Energy as one of the driving factors for development, Nepal has promoted using decentralized

off-grid RETs (micro hydro, solar) to expand access to modern energy services, in particular electricity. A

study carried out by GoN/UNDP (2011) Nepal illustrated positive development benefits of rural

electrification through micro-hydropower in improving the quality of life of people in rural and remote areas

of Nepal. Such benefits of access to electricity have made a profound contribution to multiple aspects of

human development, from poverty to health, education, gender equality, access to information and

communication and environmental sustainability. GoN/UNDP (2011) studies showed the following benefits,

beside others, of micro- which can be lined with MDGs (Table 5.5)

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Based on impact of RETs on socio-economic aspects and review of literature on MDGs, following impact

relations can be established (Figure 5.5).

Source: authors own analysis

Figure 5.5: Potential impact of RETs on Millennium Development Goals

Role/contribution of RETs on adaptation process

From the analysis of the literature, it is evident that RETs and its services can serve as the foundation for

adaptation. Based on the GcGray et al. (2007) framework and dimensions for sustainable development, the

role of RETs in adaptation can be mapped as below (Figure 5.6). The figure shows contributions of RETs

for various categories of adaptation options, as suggested GcGray et al (2007), and dimension of

sustainable development. It is noticed that the RETs contribute more on the issues related peoples

vulnerability and building adaptive capacity (vulnerability focus) than actually addressing the impact of

climate change (impact focus). So, RETs are useful options to improve adaptive of people in order to

enhance climate compatible development by providing social and economic benefits of targeted

communities.

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Source: authors analysis

Figure 5.6: A heuristic mapping of the role of selected RETs for adaptation to climate change

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5.5. Barriers for integration of RETs and adaptation

Development initiatives at national and international level have been considering the opportunities of

integrating renewable energy systems in adaptation to climate change. Nepal NAPA and the thirteen

development plan has recognized role of renewable energy in adaptation to climate change. The literature

review, however, showed some challenges and barriers while integrating RETs for adaption to climate

change.

According to Verbruggen et. al. (2009), organizing the energy transition from non-sustainable to renewable

energy is often described as the major challenge of the first half of the 21st century. Technological

innovation, the economy (costs) and policies have to be aligned to achieve full renewable energy

potentials, and barriers impeding that growth need to be removed. Similarly, Nepal (2005) also identified

technical, financial and policy issues to promote RETs for adaptation and sustainable development. There

are some technology specific barriers and challenges which also affected easy promotion and scaling up of

RETs. The major barriers can be grouped as below.

Perspective and existing development paradigm:

Although renewable energy is recognized as a critical input to development (TTP, 2013, MoE, 2011), the

traditional development paradigm has dominated on development plans and programmes to support

economic growth. Nepal also followed the development model of developed countries which has been

fossil fuel based. Although there have been some changes in thinking of integrating new, clean and efficient

technologies, existing structure, institution and mindset are basic barriers to go ahead for integrating

renewable energy in development process.

Weak awareness/ knowledge

The nexus of RETs and adaptation to climate change is in nascent stage. There are some studies to show

the linkages but there is still a huge knowledge gap to substantiate the potential contributions to sustainable

development. Policy makers do not have sufficient information resulting an inadequate priority in national

level energy planning and management process. The literature review also revealed that there has been a

lot of support available on RETs and mitigation research and less priority has been given on RETs,

adaptation and development.

Policies and harmonization

Although the responsibility of managing renewable energy in Nepal rests on a specific ministry, there are

many other sector which are directly and indirectly involved in promotion, use and management of

renewable energy technologies and services. Sectoral policies have often different goals in using energy so

it has been difficult to get consistence renewable energy interventions across the sector. There has been

very weak collaboration and coordination with other sectoral ministries such as agriculture, irrigation,

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energy and local development. Climate change Policy (2011) has emphasized a need for a renewable

energy but the policy is still to be integrated in other sectoral policies. The recent thirteenth plan (2070/71 to

2072/73) has also emphasized energy as the main building block of the development but, from the past

experience, implementation would be questionable.

These policy and practiced challenges are also resonated by other renewable programmes. For example,

SREP (2011) (with the support from CIF) has identified legal, policy, regulatory, and institutional barriers.

Similarly, a study carried out by Solar Energy Foundation (2011) also identified various policy gaps

including a lack of Renewable Energy Act or similar legal framework to promote RETs. There is no clear

policy guidelines, frameworks, methods and tools to integrate RETs in climate change adaptation planning

and management. Neither there are viable strateg that consider emerging market regime, investment (both

on research and enhancing capacities of stakeholders) and introduction of low- GHG emitting technologies.

Cost of technology and technology innovation

Technological innovation in renewable energy is a pre-requisite to transform a high fossil fuel based

development path to clean and renewable energy based development path. Major technological advances

are needed for conditions such as making renewable energy technologies cost competitive. The biggest

challenge to promote RETs is upfront establishment cost. There are also other types of cost for the

promotion of RETs. They include increased transaction of due to decentralized mechanisms, remoteness

and dispersed settlements. Other cost may also include potential damages to the economy and other social

costs i.e. loss of jobs and livelihoods. According to ESCAP Asia (2010), there is some degree of uncertainty

around the costs associated with the wider deployment of RE technologies. The risk of deployment with RE

technologies entails longer payback periods, fluctuation or risk in carbon price and the future direction of

the carbon market.

Finance and innovative financial mechanisms

Another important barrier is considered as financing especially accessing and allocating sufficient financing.

To promote new and innovative approaches/technologies, up front support is prerequisite. In Nepal, most of

the people who need immediate supports and where RETs can be promoted are in remote areas and with

weak financial condition. For to support this initiative, a combination of financial support mechanisms and

finance is needed. There has been a public-private partnership (PPP) model practiced by AEPC to bring

private sector, NGOs, local government institutions, micro-finance institutions and end user together. But,

this mechanism is constrained by large scale financing, higher transaction cost and weak risk sharing

mechanism (insurance). Besides these, local government institutions (DDC, Municipality and VDC) were

not able to discharge their oversight role and appropriate monitoring, evaluation and learning mechanisms

have to be fully developed.

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5.6. Way forward

Addressing climate change impacts is one of the most important challenges of the twenty-first century.

There is no liberty of inaction. Studies, including Stern (2006) suggest that the cost of inaction is even

costlier. As energy being a major source of GHG, the costs of inaction on reducing the consumption of

fossil fuels would be many times the costs of action (ESCAP, 2010). Similarly, reducing the consumption of

fossil fuels, the main source of climate change, and increasing RETs are better and win-win strategies that

help to reduce global development cost in longer run.

Literature review showed that RETs, in addition to reducing the GHGs emission, would positively contribute

to socio-economic and environmental aspects that are central to improving the livelihoods of people and

ensuring the sustainable development. The analysis showed that RETs contribute to adaptation processes

by contributing on reducing drivers of vulnerability of people (for example increasing energy security and

access, improving maternal health) , improving adaptive capacity (for example contribution on education

and employment) and addressing climate change risk (example improving family income and improving soil

fertility, soil and water conservation). It is generally agreed that RETs can address many climate change as

well development challenges and can provide the adaptation and development benefits. Hence, it is

important to make a clear road map to address climate change while supporting in attaining sustainable

development and green growth through appropriate ado