Energy Cost and Energy Shortage in Nepal;

Potential of Solar, Wind and other future energy

sources

Presented By:Group 3 :SSS, SB, NBD, SKL & BK

Energy Cost

• Rising cost of energy-a reality• Main reason-Increasing demand of households

and business sector• Negative impact on business• Major Energy types:– Petroleum Products– Electricity

Petroleum Cost in Nepal

• Highly volatile prices• High fluctuations over the years• Price Rise from 2000 to 2013– Petrol :225% – (Rs. 40/l to Rs. 130/l)– Diesel:347.82%– (Rs. 23/l to Rs.103/l)– LPG:216.13%– (Rs.465/cyl to Rs.1470/cyl)

Date Petrol (Rs/l)

Diesel (Rs/l)

Kerosene (Rs/l)

Aviation Fuel (USD/kl)

LPG (Rs/cyl)

2000 40 23 13 360 4652001 46 26.5 17 360 5502002 52 26.5 17 360 6502003 54 31 24 360 7002004 56 35 28 609.27 7502005 67 46 39 660.12 9002006 67.25 53.15 47.65 931.83 9002007 80 56.25 51.2 1180 11002008 80.5 59.5 59.5 1000 11502009 77.5 58 58 750 11252010 88 68.5 68.5 945 13252011 105 76 76 1215 13252012 123 99 99 1250 14702013 130 103 103 1300 1470

Petroleum Cost in Nepal

5/28/2

000

2/28/2

001

11/28/2

001

8/28/2

002

5/28/2

003

2/28/2

004

11/28/2

004

8/28/2

005

5/28/2

006

2/28/2

007

11/28/2

007

8/28/2

008

5/28/2

009

2/28/2

010

11/28/2

010

8/28/2

011

5/28/2

012

2/28/2

0130

20

40

60

80

100

120

140

Petrol, Diesel and Kerosene Prices (Rs per litre)

Petrol(NRs/L) Diesel(NRs/L)Kerosene Open (NRs/L)

Rs. P

er li

tre

Electricity Cost in Nepal

• One of the most costly tariff in South Asia• Same rate for more than a decade• 20% increase in tariff on 17th August 2012

Energy Shortage

• Current Scenario: Electricity Crisis• Nepal: Economically viability of 43000MW• Utilized: 600MW (just 1.4%)• Acute shortage of electricity

(Demand>Supply)=Deficit• Managed through : Load shedding/

Rotating Blackouts (up to 16 hrs/day during dry seasons) more than 700MW

• Demand rise by 9 t0 10%

Fiscal Year Annual Energy

Demand(GWh)

Annual Energy Supply (GWh)

Deficit shed through rolling blackouts i.e.,

load shedding

2012/13 5446.285(100%)

4218.135(77.45%)

1228.15 (22.55%)

2011/12 5194.78 (100%)

4178.63 (80.4%)

1016.15 (19.6%)

2010/11 4833.35 (100%)

3850.87 (79.67%)

982.48 (20.33%)

2009/10 4367.13 (100%)

3076.69 (80.4%)

612.58 (19.6%)

2008/09 3859 (100%)

3130.77 (81.13%)

728.23(18.17%)

2007/08 3490

Demand, Supply and Deficit of Electricity

2007/08 2008/09 2009/10 2010/11 2011/12 2012/130

1000

2000

3000

4000

5000

6000

Annual Energy DemandAnnual Energy SupplyDeficit shed through rolling blackouts i.e., load shedding

Fiscal Year

Elec

tric

ity (G

Wh)

Annual Demand, Supply and Deficit of electricity FY 2007/08 to 2012/13

Maximum Load shedding dry seasons Fiscal Year Maximum Load

shedding per day (in hours)

Maximum Load shedding per week (in

hours)2007/08 6-7 hours 48 hours

2008/09 12 hours 84 hours

2009/10 16 hours 112 hours

2010/11 14 hours 98 hours

2011/12 14 hours 98 hours

2012/13 12 hours 84 hours

Current Scenario: Petroleum Crisis

• Same situation as Electricity• Imbalance of demand and supply• Nepal Oil Corporation: sole provider• Monthly loss of Rs.185.58 crores• Huge part of imports• In FY 2012/13, Oil Imports 19.2% of total

imports• Nepal imported $1222.3 million worth of

petroleum products from India alone• Consumption rise range 17% to 29% per annum

Causes of Energy Shortage in Nepal

Causes of Electricity shortage– Slow paced implementation of transmission

lines – Spillage of Electricity– Lack of maintenance of power stations– Non completion of projects on time– Delay in evacuation of energy from IPPs

Continued…

Causes of petroleum product shortage– Over-Dependence on IOC for petroleum

energy– Energy Subsidy– Mismanagement in NOC– Increasing number of vehicles– Absence of adequate necessary infrastructure

Impact of Energy Shortage in the business sector in Nepal

• Impact on Manufacturing Sector• Impact on Service sector• Reliance on generators and inverters• Shift of objective of businesses• Impact on investment• Increment in production cost and market

prices

Solar Definition

• Energy of sunlight collected and used to provide electricity, to heat water, and to heat or cool homes, business or industry

• It’s a renewable and sustainable source of energy, means that it doesn't run out, but can be maintained because the sun shines almost every day

Importance of Solar • Clean energy• Doesn’t affect the environment and eco-

system• Versatile• can be utilized to power various things like

cars, cooking, coffee roasters, electricity for homes and business, watches, etc.

• Important in nature• Plants use the energy to produce the green

chlorophyll that they need to survive, while humans use the sun rays to produce vitamin D in their bodies

Solar Potential

• Acc. to Water and Energy Commission Secretariat (WECS) 1995, 78% of land area is potential

• solar radiation varies from3.66kWh/day, and the sun shines for about 300 days a year

• 2920 GW energy from 0.01% of total area of land

Contd..

Potential sectors Figure

Commercial potential for grid connection 2100 MW

Sunshine hours 6.8/day

Solar insolation intensity 4.7 kWh/day

Solar heater installed till 2005 61,000

Solar heater installed till 2009 185,000

Acc. to the report published by Alternative Energy Promotion Center (AEPC) in 2008 under Solar & Wind Energy Resource Assessment in Nepal (SWERA),

Subsidy

• Started in 1998• A 50% subsidy on the cost of solar dryer

was announced by AEPC in 1998• Use of solar photovoltaic is increasing

rapidly in the country

Subsidies provided by Govt. to the households for installing SHS of 10-18 Wp and 18 above are presented in the table:

Geographic Location 10-18 Wp NPR

More than 18 Wp NPR

Karnali and adjoining districts and very remote VDCs categorized A in other districts

7,000 10,000

Remote VDC categorized B in other districts

6,000 8,000

Accessible VDCs 5,000 6,000

Subsidy Criteria

• Solar energy subsidy will only be available to Nepalese Citizens for specified SHS and SSHS systems installed in the rural areas not electrified by other means

• SHS subsidy will be available if the area has been defined in general as a VDC or a group of adjoining VDCs within 3 hours’ walking distance and closeness has to be certified by one of the involved VDCs or DDC

Wind Energy ResourcesHistory• Wind Energy: agricultural farm of

Rampur • Wind Turbine: Ramechhap district• First wind turbine generator: 20 kW• More wind turbines– Chisapani of Shivapuri National

Park – Club Himalaya in Nagarkot

Wind Energy ResourcesPotential• Difficult to generalize wind conditions– Diverse topography– Consequent variation in meteorological

conditions• Specific areas have been identified• World Bank(1977)• Department of Hydrology & Meteorology(DHM-

1983)• DANGRID(1992) • WECS + DHM + AEPC + NAST (1999-2002)

Wind Energy Resources

Potential:

• SWERA (AEPC, 2008): 3000 MW

• ITDG: Five 200-watt wind turbines at Kavre,

Tansen Palpa, Makawanpur, Chisapani

(Karnali) & Udaypur

• AEPC: 400-watt wind turbine at Nagarkot

Wind Energy Resources

Analysis:

• The country is in the early stage of

establishing policy frameworks

• Government’s target

– Increasing the share of renewable energies in

the energy supply to 10% in the next 20 years

Wind Energy Resources

Recommendations

• Enhance the country’s capacity to plan, develop and

implement wind energy sector projects

• Help different stakeholders improve their

understanding of Nepal’s wind energy potential

• Create competent and creative human capacity in

this sector by creating synergy among all

stakeholders

Other Fuel Resources

Coal Resources• Four major categories:– Quaternary lignite of Kathmandu Valley– Coal from Dang (Eocene coal from Mid-

Western Nepal)– Siwalik coal– Gondwana coal

Fossil Fuel Resources

• Petroleum and natural gas resources– All the petroleum products consumed in

Nepal are imported from India or overseas in the refined form for direct consumption.

– Nepal Oil Corporation (NOC) is the sole organization responsible for the import and distribution of petroleum products.

– The NOC has storage facility for all the essential petroleum fuels, except for LPG.

Almost one third of the Nepal has been plotted out for oil exploration. Currently all 10 blocks have been leased out to foreign companies. Map Credit: Petroleum Exploration Promotion Project, Nepal.

Cover pages of the contracts between the Nepali government and the oil exploration companies Texana and Cairn. These documents remain “confidential.”

Fossil Fuel Resources• Biogas Resources– The estimated total technical

potential of biogas plants is about 1.9 million plants of which 1,000,000 plants are thought to be economically viable.

– As of December 2008/09, more than 2, 00, 000 biogas plants of varying capacities (4, 6, 8, 10, 15 and 20 m3) have been installed (BSP, 2010).

Fossil Fuel Resources• Improved Cook Stove

Technology– There is a huge potential

for biomass technologies like Improved Cooking Stoves (ICS), Beehive briquettes, Briquetting mechanism, Gasifier.

– More than 331,000 ICS have been so far installed through various government and non-government organizations

Fossil Fuel Resources Micro and Pico-Hydropower ResourcesThe hydro power stations for generation of mechanical and electrical energy up to a capacity of 100 kW come under micro-hydro in Nepal. The installations of such units up to 1000 kW do not require any license from the Government. Furthermore, EIA is not required up to 50 MW till 2011 under GoN’s working program to tackle current energy crisis 2009. The Government of Nepal is providing subsidies for the installation of micro-hydro plant according to the location and remoteness of the districts of Nepal.

THANK YOU!

The floor is open for the questions!