ADB_book_18 April.qxp - Himalayan Document Centre - icimod

enewable energy sources could contributesubstantially to self-sufficiency. In reality, however,Nepal has not been able to harness its indigenoussources adequately and cost-effectively with twoundesirable results—the energy available in themarket is costly, and rural and poor people continueto depend on traditional biomass sources.Relying more on indigenous renewable energysources has a number of advantages. In addition toenvironmental benefits, such sources are lesssusceptible than imported fossil fuels to pricefluctuations and foreign exchange rates, and theiruse means minimizing the risk of supply interruptiondue to external factors. But their development anduse are constrained by the lack of national priority aswell as inadequate national capacity in terms offinance, technologies, and institutions. Renewableenergy sources (hydro, biomass, solar, and wind)require a much higher priority in national energyprograms.Having an Appropriate Mix of EnergySourcesEach energy source has desirable and undesirableenvironmental, economic, technical, and socialdimensions. No single source is likely to satisfy alltypes of energy needs for all groups of users at alllocations. Therefore, dependence on one sourcealone is not sustainable in the long run. Energyneeds, availability, and costs can change over time.The long-term strategy, therefore, should encouragea suitable mix of sources, including hydropower,improved biomass use, solar, and other sources, thatsatisfies current and emerging demand and includesthe necessary flexibility to respond to changingcontexts. The energy mix desirable today couldchange over time with changing needs and advancesin technology.Reducing Consumption throughIncreasing EfficiencyCurrent energy consumption in Nepal is heavilydependant on biomass. Two issues related to this arefirst that biomass is used in a wasteful and inefficientmanner that affects the health of consumers, andsecond, that although biomass is a renewablesource, its supply is limited and cannot continue tomeet growing demand without adverse impacts onthe environment, economy, and health. Theconsumption and demand of non-biomass,commercial energy such as electricity and petroleumhave been gradually increasing and this has beenmet by a corresponding increase in supplies, butefficiency in end-use has hardly receivedconsideration.Efficient use of energy is probably moreimportant in the long run than increasing supplies.Promotion of energy efficiency in the production,supply, and consumption stages will not only reduceor check increases in demand, but will also havepositive impacts on environment and health. Energyefficiency should be an integral part of nationalenergy development and environmental policies.One constraint to promoting energy saving andefficient use is the cost of energy conservationtechnologies and end-use devices that, mostcommonly, have to be imported. Investment inenergy conservation and improved technologies andmeasures can save money over time because therewill be reductions in the investment to increasesupply. Improving efficiency can be less costly thaninvesting in new projects to supply increasing energydemand.Many energy efficiency measures, however,may cost little or nothing to implement—quite oftenenergy can be saved simply by demand-sidemanagement. For example, differential pricing foruse of electricity during peak and off-peak hours orduring the monsoon when hydropower supply isgreatest and winter when it is limited can promotemore rational consumption behavior. Improvedcooking stoves can substantially reduce fuelwoodconsumption in rural areas in addition to theirbenefiting health. These principles, however, shouldbe applied in such a way as not to impededevelopment.Constraints. Pursuing the sustainable andenvironmentally sound energy path that enshrinesthese principles is not easy in the present nationaland global economic structure. This will requireclarity as to how such an energy policy can be linkedwith sustainable development. For example,transport and industry are important for nationaldevelopment and are the major consumers ofpetroleum and coal, which are not only imported butalso environmentally undesirable. With the rightpolicy, transport can be promoted in a way thatconsumes energy from indigenous renewablesources like hydroelectricity.Availability of funds and national willpower toimplement the policy is another basic requirement.Most of the technologies will have to be purchasedfrom more developed countries, which will be amajor constraint for a country like Nepal. Initially,foreign assistance may be mobilized. Buildingnational capacity in renewable energy technologiesand manufacturing energy-efficient devices shouldbe at the top of the energy development agenda.Energy price. Price at the consumption point isprobably the most important factor influencingenergy consumption behavior. Pricing policy shouldChapter 6: Energy Resources79