Renewable Energy Policy and Development in Nepal

1. Renewable Energy Policy and Development in Nepal Dr. Govind Raj Pokharel Executive Director September 24, 2008

2. Government of Nepal Declared F/Y 2008/09 Alternative Energy Year

3. Policy Trend and AEPC • Importance of Alternative Energy Technologies was recognized during the 7th Plan Period (1987-1992) • The development of the Energy Sector was given special priority during the 8th Plan (1993-1998). Objective was to reduce the growing gap between urban and rural areas Establishment of AEPC as Government Body (1996)

4. Introduction - AEPC • National Executing Agency - RE programmes and Projects. • Government institution under MoEST- semi autonomous status. • Mandate: Promotion and development of RETs: Mini/Micro hydro power up to 1000 kW, Solar Energy, Wind Energy, Biomass Energy (biogas), Geothermal Energy, Energy Efficiency!

5. Objective of AEPC establishment • to popularise and promote the use of alternative/renewable energy technology • to raise the living standard of the rural people, • to protect the environment and to develop the commercially viable alternative energy industries in the country

6. Vision of AEPC "An institution recognised as a regional/ international example of promoting large-scale use of renewable energy and a national focal point for resource mobilisation"

7. Policy Trend and AEPC • One of the main objectives in 9th plan was to promote large Scale promotion of RETs for Poverty alleviation • Objectives of 10th Plan: • Promote and disseminate RETs as the powerful mean to enhance the livelihoods of the rural people for the poverty alleviation (increase purchasing capability) • Reduce the consumption of traditional energy sources

8. Approach of RET promotion • Demand driven programme • Involvement of Community, Local Bodies (DDCs/VDCs) and NGOs-promotion and quality control • Private sector responsible for manufacturing, supply, installation and after sale services of the RETs system • Govt.’ technical support in terms of training, information, guidelines and quality assurance • Collaboration with NGOs, Local Bodies and academic institutions

9. AEPC & Its Programs Mobilization, Capacity Building, Subsidy and CapacityBuilding Consumer Private Sector Demand & Investment RET Supply Promoting Agencies (Gos, NGOs, INGOs)

10. Roles and Responsibilities of AEPC • Short, medium and long term policy and plan formulation • Monitoring and Evaluation • Promotion of RET Development Programmes; • Standardisation, Quality Assurance and Monitoring • Chanelise Subsidy and Financial Assistance • Co-ordination of (I)NGOs and Private Sector and • Strengthening Organisation working in RET.

11. Government’s Strategy • Emphasis will be given for locally available resources and skills • Priority will be given to programmes which are aimed at the integrated implementation for supporting the social, economic and environmental sustainability. • Subsidy policy will be revised as per need in order to increase the access of rural households/communities to rural energy technology and provide maximum benefit to them

12. Existing Policies • Renewable Energy Subsidy Arrangement and RE Subsidy Delivery Mechanism introduced and implemented • Rural Energy Policy, 2006 • Tax and VAT Exemption • Biogas Credit Unit • Credit Support for the Biogas Plant Installation

13. Financial Incentives/ Promotional Measures • Subsidy Based on capacity installed and HH benefited • Subsidy Delivery to users thru private companies by deducting from the system cost • Prospective manpower needed to private sectors are trained on Govt. cost • Tax and VAT Exemption in import of system/components • Biogas Credit Unit • Credit Support for the Biogas Plant Installation

14. Physical Progress of RETs in Nepal

15. 3 Y Interim (2007-2010)Plan for AE

16. Other Plan of AEPC • Sensitize all Nepalese by Celebrating Alternative Energy Year • Promote Bio-fuel (Bio-diesel and Bio-ethanol) to blend in diesel and petrol ( at least 10% Ethanol) • Promote Wind Energy • Solar PV in urban areas and Connection to grid • Promotion of biogas in urban HH based on waste • Adaptive R & D on Hydrogen Energy and other technologies • Promotional activities on Energy Efficiency

17. Solution to Energy Crisis Cooking/Boiling/Heating Household waste biogas plant/ Phuksin Biogas plant feeding agro-waste Solar Cooker Bio-briquette Solar water heater Efficient Cooking Devices

18. Solution to Energy Crisis: Transportation More than 23 plants found in Nepal have the oil content as high as 80% About 13,600 kL of resin and turpentine was produced by 12 industries and Nepal’s potential about 27,300 kL About 1 million Kilo-liter of bio-diesel can be produced in Nepal per year if planed and developed properly.

19. Main Challenges in RETs • Lack of technical personsin the RET sector • Lack of access of information to the people of the remote areas • Un-affordability i.e. low income of the people to use the technology especially Dalit, Marginalized and remote areas • Connecting several MHP/MMHP to mini-grid and ultimately to the grid wherever technically financially feasible • Lack of coherent policy in the sector

20. Areas needed to be focused in RET Developing manufacturing base (above 100kW) Capacity building (Designers to installers & operators) Financing (Commercial Banks and Local Financial Institutions) End-uses/productive applications Adaptive R & D

21. Strategies adapted recently Decentralization (establishment of DEEU/S in 72 DDCs) Draft 3 tier Monitoring MOUs for optimizing subsidy , integrated development Technical Capacity Building for Designing MHP system, Small Solar Home System, ICS, Wind etc

27. Thank You Any Questions?? For further information: Alternative Energy Promotion Centre Khumaltar, Lalitpur Ph- 5539390/5548468 Email: govind.pokharel@aepc.gov.np Website: www.aepcnepal.org