Energy Security in Nepal ! Are we prepared?

Energy security is the secure and stable available of energy to the consumer. By energy security, there is assure of availability of energy at any demand of time in an affordable and sustained manner. In this article we will assess the energy security condition in Nepal.

Energy security concept comes into play when there is energy crisis. Even, the countries make plan on how to address the energy problem in upcoming days. Nevertheless, this word has just become a word.

In September 2021, energy crisis reported first in UK and subsequently hit hard across European countries. UK have started its non-functioned coal powered energy generators to produce energy. In Europe, the price of energy have raised and reach high as high in last 15 years.

In Asian countries, China and India are also facing same issues in shortage of energy. Despite the fact being, they both are the largest producer, largest importer and largest consumer, they are forced to shut down factories. News shows that China is unable to provide gases to houses and there is frequent power cuts. In India, where 70% electricity is produced from coal is facing 4-5 hrs power cut in different states.

The main reason for the energy crisis is due to low production of Natural gas and coal during covid-19 pandemic period. As now, countries are returning on their economic mobilization state and higher energy is required. So the lag in supply and rise in demand have created energy crisis.

Second reason is that there is lack of commitment and executable plans in renewable energy productions as the main source of energy. Huge depended of factories in traditional energy sources is also one of the factor.

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Condition of Energy in Nepal:

As, both neighboring countries are facing energy deficit. Nepal, on the middle and largely running our country being an importer is likely to get serious effect in energy sector. Nepal have come hail 18 hrs long electricity shortage and people here feel how its likely to be in energy security. Now Nepalese are fortunate that there is no such electricity shortages.

Its good to see that Nepalese are now having energy access and there is no cut off’s but we should be equally aware that are we becoming self in-sufficient in production of energy. As of annual report published by NEA in 2021, around 450MW of electricity is imported from India alone which accounts for around one third of total power connected to national grid. As of this NEA report, total peak energy demand is 1482MW.

The average consumption energy in Nepal is 332 kWhr per capita as of 2020. Whereas, neighbouring India and China energy consumption is around 1000kWhr per year and 4900 kWhr/year respectively. The main source of energy in Nepal is bio fuel, petroleum and natural liquified gases. The imported petroleum consumption is around 80% in transportation whereas 80% of Nepalese use bio mass as a fuel in cooking purposes. The contribution of renewable energy sources including hydropower is increasing in Nepal but still lags in contribution in cooking purposes.

The usages of different sources of energy like wind energy, bio energy, solar energy is increasing in rampant manner. According to the AEPC ( Alternative Energy Promotion Centre), by 2019, 794,276 solar home systems, 400,432 domestic biogas plants, and 1,343,224 improved cook stoves were installed in Nepal.

Policies , Plans and Budget:

Nepal have heavily focused in hydropower as the driving sources in contribution in country’s economy. Yealy Budget, Periodical Plan, AEPC, Jala Vidyut Utpadan Company, Energy Security Policy 2073 are formed to address and mitigate the the hurdles seen during the project life cycle.

AEPC was formed in 1998 to promote the energy production, utilization and expansion of available energy sources in an affordable and sustainable way. In addition, AEPC is the main institution in facilitating the financial and technical assistance in promoting and expansion of energy production. With grant and assistance from different donor organization and countries, it has therefore been providing subsidies strengthening the use of local resources to fulfill the energy demands and needs in local level.

There have been continuous effort in strengthening the energy security by various means. The various policies, plan and budget are given below:

a) Budget 2020/21 :

Ministry of Finance (MOF) have always emphasis the allocation of budget in hydropower and renewable energy sector. The allocation of budget is aimed to strengthen production, distribution and consumption of various energy sources in sustainable and affordable way in insuring energy security in Nepal.

In 2078/79 B.S budget (2020/21), MoF have allocated 5.1% (88 Arab) of total budget of 16 Kharab.

The targeted performance in 2021 and 2021 is given here:

Fig: Targeted indicators in 2021/22 issued by MoF during 2020/21 budget allocation in Energy and Alternative Energy

To achieve this indicators, various activities have been planned and few of major are:

  • Construction of semi-storage and storage hydropower projects
  • Additional 1629 MW of energy will be added in national grid by 2021/22
  • Ujyalo Nepal campaign as electrification in 43 districts
  • Leakage reduction
  • Inter country and cross border transmission line connectivity strengthen and development
  • Providing reliable energy sources as energy security
  • Private fund mobilization in development of energy sources
  • 90% subsidy in renewable energy development in local and community level

b) Periodical Plan 2020-2024

This is the five year plan developed by National Planning Commission. Current periodical plan is 15th plan and is trying to ensure energy security in Nepal through intensifying hydropower generation and developing renewable energy.

In hydropower sector, following strategies are developed to address the goal of energy security.

  • Production of electricity by attracting FDI and domestic investor
  • Strengthening the reliable and effective power supply via domestic and cross country transmission line
  • Make distribution system effective and increase energy consumption
  • ensure energy security via mix energy system
  • strengthen institutional structure

Similarly in alternative energy sector, following strategies are proposed to implement to meet the energy demands.

  • to reduce the import of LP gas and develop bio gas plant
  • to involve private sector in development and financing of renewable energy technology
  • emphasize the use of latest energy efficient techniologies

Solution and Conclusion:

Despite of energy production, distribution and utilization, there is not proper energy security policy. The need of energy security policy and laws is necessary to assess the condition of energy in Nepal. Periodical Plan by National Planning Commission of Nepal is trying to address the energy security but is not sufficient. The dependence on import energy for industrial, transportation and cooking purposes is very high in Nepal and is increasing. So, what if, the country which we buy stops sending us the energy? If this condition arises, the life and overall economy of Nepal could get worse.

One of prominent and sustained energy security strategies is to be self reliant on ourselves in production of energy. Secondly, We should always focus in reducing fuel and its subsequent technologies with increasing the use of renewable energy technology. For instance, Nepal has a huge potential in hydro and renewable energy sources, focusing in electric vehicles and engines, electric cooking technologies would justify in utilization of energy which we have.

The sustained, inclusive and participatory approach in development of energy with using our own technology, skills and expertise is always be foresighted. In conclusion, we should always keep in mind that, every country which we see being developed have always use their abundant sources.

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