ADB_book_18 April.qxp - Himalayan Document Centre - icimod

Alternative EnergyAt present, alternative energy is the preferred choicefor rural areas of Nepal for various reasons. However,this might change over time as the country developsand the national grid can supply electricity to remoterural areas at an affordable tariff. Some reasons forpreferring alternative energy sources at present arediscussed here. First, the excessive dependence ontraditional biomass energy (fuelwood, agriculturalresidues, and animal waste) and their inefficient usehas undesirable implications for the environment,health, and economy. Furthermore, commercialfuels are not easily available in remote areas (thismight change with improvement in access). Mostrural areas of Nepal do not receive electricity fromthe national grid, and the situation is unlikely tochange in the near future because the integratednational power system is already overburdened, theterrain in the Himalayan mountains is difficult, andpopulation density is low. The price of commercialenergy (electricity from the national grid as well askerosene and LPG), where available, is generallybeyond rural people’s purchasing capacity, whereastraditional biomass fuel is free of cost. Therefore,people continue to use the traditional energy evenwhere commercial energy is available. Thusalternative energy can play a significant role inremote and rural areas.Despite its importance and desirability, a majorhurdle in promoting alternative energy is its highinstallation cost. Sustainability of alternativerenewable energy is often questioned, as it cannotfreely compete with grid electricity and petroleumfuels in the existing national and global market andenergy systems. The market, however, is imperfectas it does not reflect environmental costs. Hence,there is a strong argument for a set of strategies,policies, and subsidies favoring alternativerenewable energy. The Government has beenproviding subsidies to alternative energy since theEighth Plan (1992–1997), which is the mainpromotion of alternative energy in Nepal. Majorissues related to subsidies are that the policy hasfrequently changed or been inconsistent, causingdifficulties and frustration to the stakeholdersinvolved; subsidies have depended on donorassistance and continuity cannot be relied upon, asdonor priorities can change; many of the benefits ofsubsidies go to suppliers rather than to people; andfinally, subsidy schemes usually fail to consideroperation and maintenance, and as a result asignificant proportion of alternative energytechnologies cease to function soon after beinginstalled.The highest micro-hydropower plant in Nepal at TshoRolpa (approx. 4,500 masl)Micro-hydropowerHydropower schemes in the range of 5 kW to 100 kWunits are a suitable and common choice for the ruralhilly areas of Nepal due to low capital investment,simple technology for which Nepal has in-countrycapacity, hilly topography, fairly high rainfall,numerous streams, and scattered rural settlementsand communities.Micro-hydro electrification started in the 1970s,and the Government began encouraging it in 1980through a subsidy scheme. The installation ofelectrification schemes has been rising sharply sincethe mid-1990s following the inception of the RuralEnergy Development Programme and establishmentof the Alternate Energy Development Center. Thereare around 2,000 micro-hydropower plants in Nepalwith a total capacity of about 12 MW—nearly 3% ofthe country’s total hydroelectric power output(MOPE 2003; Basnyat 2004).Despite its potential and advantages, there areconstraints and obstacles to micro-hydro’swidespread development.The electricity generated from micro-hydro hasbeen used mainly for evening lighting. Thus, the peakGhatta, a water-powered millDHMM. ShresthaChapter 6: Energy Resources71