Falling Oil prices: Missed opportunities for Nepal

The drop in the global price of crude oil, below $30, has stunned industries and consumers alike. Obviously, the fall in the oil prices is good news for oil importing countries. Indian Prime Minister Narendra Modi seems all set to capitalise on this. Indian Prime Minister Narendra Modi seems all set to capitalise on this. Last week  Modi discussed the prospects of boosting the investment in oil and gas sector with Shale and International Energy Agency(IEA) executives to bring in more investment for his ‘Make in India’ mission. He tweeted “Had a very good interaction with global oil & gas experts. Discussions centred around India’s energy sector & investment in oil & gas”

Nepal’s case
Although it is hard to predict how long the drop in the oil prices is going to last, one thing is for sure: Cheaper oil is not going to be available for long. Globally, Nepal ranks near bottom in the list of oil importers when measured against the total volume of imports. Nevertheless, the country’s imports of major petroleum products have increased at an annual rate of 12 percent in recent years—from 374,198 kilo litres in 2005 to 1,209,187 kilo litres in 2015. So, as a net importer of oil, Nepal could have tapped this golden opportunity to make some savings.

But while the world rejoices the plunge in oil prices, the reality for Nepal is entirely different. With the ongoing blockade following the  protests by the Madhesi Morcha along the border, the supply of petroleum products is in disarray. Failing to forge a political consensus among the political parties to address the Madhesi demands, Nepal’s fuel crisis is getting out of control. People have been forced to spend their crucial working hours, in some cases even days, queuing up at the petrol pumps for a few litres of petrol. As a result, black marketeering of petroleum products has been thriving in the country. With the price of a litre of petrol three times than the regular price, black marketeers are extorting the public. The illegal market is also gnawing away at the revenue stream.

But energy crisis in Nepal is not a new phenomenon. Regular power cuts from the state-operated Nepal Electricity Authority in the country have become a routine for over a decade now. The power cuts have recently gone up to 15 hours a day. Those who were already operating their businesses and industries relying on diesel operated systems, as a coping mechanism at the expense of high operation costs, are now suffering further with the disruption in fuel supplies. The government does not seem to have taken any concrete measures to abate the fuel crisis. But it is time to act and the government, along with all the political parties, should actually be paying heed to the falling oil prices and have discussions on how Nepal can benefit from it.

Where can the oil savings go?

Amidst the fuel crisis, the government led by Prime Minister KP Oli has been obliged to seek every possible alternative. The good news is that the government has accorded high priority to the renewable energy sector and is planning to scale it up. But the danger lies in the very assumption that renewables can immediately lessen the burden on the import of fuel. Our circumstances are such that even to transport a small micro-hydro turbine to a village, we need the imported fuel. The construction of major hydropower projects has been halted thanks to the blockade. Moreover, industries and enterprises are also cutting down their operations due to the lack of oil supplies.

There seems to be a strong market demand for solar power and other forms of alternative energy in the country. We have both the market and companies willing to provide their services. But the renewables, if driven by any short-term solutions and bad economics, can risk the growth of renewable energy in the long run.

What is more imperative at this stage is strategic reform and more investment in the renewable energy sector so that any investment made today could ensure its sustained growth. At present, the government could use the savings from falling oil prices in the global market to cross-subsidise the renewable energy sector. Also, it is necessary for the government to take immediate steps to improve the fuel situation, scale up its storage capacity of oil depots and undertake measures to reform oil subsidies. Oil subsidies have long been justified for their role in spurring the overall development of the economy. If that is also expected from renewables in Nepal, existing petroleum prices need to be adjusted with some top ups with renewable energy surcharge and by adjusting Power Purchase Agreement tariffs for renewables.

In his book, ‘The Quest: Energy Security the Remaking of the Modern World’, the oil guru Daniel Yergin recalls American president Jimmy Carter declaring “no one can ever embargo the sun” during the only press conference ever held on the top of the White House advocating solar water heaters on June 20, 1979. The very idea of transitioning to renewable energy unfolds its prospects as a key investment to ensure the long term energy supplies in the context of complex geopolitics and rising issues of energy security in Nepal. However, all this largely depends on the government’s ability to bring Madhesi Morcha and other political parties on board, smooth the supplies, store and stock them well and use the savings later to invest in technologies, which in the long run can lessen our dependency on oil.

Oil Slump: the articles was intially published in the Kathmandu Post

Nepal: Panel Discussion- Role of renewables need new orientation

Nepal’s current energy crisis is hitting the headlines, both nationally and internationally. The disruption of supplies of petroleum products especially after the series of protests from Madeshi Morcha -consortium of political parties of Terai region,stating their reservation on Nepal’s new constitution promulgated on September 20, 2015 triggered new debates on energy in the country. Regular power cuts from the state operated NEA in the country is not new. Given the lack of adequate electricity supplies, many of the  industries, enterprises that relied on diesel operated systems to run their businesses and operation at the expense of high operation cost are now suffering further with the disruption of supplies. Households and businesses are now urgently looking for alternatives. Slowly, talk of renewable as alternative measures to lessen the country’s burden on imported fuels started gathering pace. Government of Nepal is receiving a massive criticism for not being able to abate the growing energy crisis in the country  obliging them to seek every possible available alternatives. People and policy makers are now contemplating whether development of indigenous renewable energy resources could be the panacea. If timely planned and adequate resources are invested, renewable energy options provide exciting opportunities to provide the huge energy supplies and in lowering the cost of services. Leveraging private sector finance, exploring the potential RET investment opportunities, setting the right policies and institutions ready is more pressing. Now the debate goes- What NEXT? What policies, institutions, collaborations can led us to the new energy secured future?

After the success of past episodes of Renewable Energy Weeks in 2013 and 2014 in creating considerable renewable energy awareness among people and in persuading them to adopt these technologies, Alternative Energy Promotion Center (AEPC) just concluded with the another episode of Renewable Energy Exhibition 2016 that ran three days starting  the 1s of January 2016.

Considering the exhibition to be a right platform that can be seized to take opportunities to discuss the new prospect of renewable energy and it’s the changing role in the debate of energy security, AEPC hosted a policy debate on the last day of the exhibition with the key sector leaders, policy makers, professionals, think tank, media, private and other civil society actors working in RE industry.  The event highlights few of the challenges and opportunities for scaling up renewables in the country. Here are some of the quick quotes from the panel discussions.

“AEPC lacks sufficient mandate to promote renewable energy in urban areas, structural reforms needed” MR. Ram Prasad Dhital, Executive Director, AEPC. Further says – “a higher level coordinating entity among government agencies working in energy is a must for improved coordination in the sector”

“lack of clear licensing policies & conducive frameworks and guidelines is hindering  private sector investment in renewables”- Kumar Pandey, FNCCI

“Existing ‘RE delivery mechanism’ a major bottleneck in delivering renewable energy services, needs a massive overhaul’. Khimananda Kandel, Water and Energy Consultants’ Association (WECAN)

“Government of Nepal is willing to increase subsidies on renewables” says, Mr. Biswendra Paswan. Minister, Ministry of Population and Environment.

Feed in Tariff policies for different types of renwables can be a ‘game changer, its all about setting right policies and demonstrating tangible commitment and willingness from the policy makers  in scaling up renewables in Nepal‘- Mr. Surya Kumar Sapkota, Assistant Director, AEPC

“AEPC shouldn’t loose its focus on off grid rural villages while attempting to cater the urban energy needs, there’re still many unserved communities to reach as many still lack the basic modern energy access”. Mr. Madhusudhan Adhikari, National Advisor, AEPC

 

here’s how the open data could strengthen Energy for All initiatives in Nepal

-[the article  originally posted at openaidpartnership.org] bloglink here-

Sustainable energy can provide under-served communities with enough energy to power machines that provide jobs, water crops, and turn on lights so children can read and do homework long after the sun goes down. In Nepal, a country in which more than 30 % of all households don’t have electricity, finding and implementing sustainable energy solutions is critical. While we have hit many challenges including poor skills and infrastructure, a lack of proper and usable data on energy access that has been an unseen hindrance in lighting households. Finding a sustainable energy solution for Nepal is just one example on how improving access to data is crucial in creating effective policy solutions.

Across the world, there has been high spending on subsidies for renewables. Unfortunately, populations who live in extreme poverty, as well as historically disadvantaged groups living in remote villages still remain unserved and out of reach of energy solutions. In Nepal, cumbersome subsidy administrative procedures needed to implement renewable energy options, requirements for additional equity from households, and an overall lack of information on available subsidies, vendor information, and best available technologies have dissuaded many citizens from utilizing sustainable energy options. At the same time, without the numbers on actual household energy need in these communities, a supply and demand mismatch has emerged that leads to a waste of resources. Given this supply and demand issue, the government is now struggling to eliminate fake claims made by vendors who have installed systems in un- and underreported areas. At the same time, fake claims from end users who define themselves as someone living in extreme poverty or a member of disadvantaged groups in order to gain additional subsidies that are provisioned for socially disadvantaged groups lead to higher monitoring and subsidy transaction costs.

If the government made full disclosure of energy provision data – including where subsidies are going, what is planned for which regions, and the amounts of each subsidy or vendor contract – duplication of resources, false contracts, and fraudulent claims will diminish as people are allowed to closely monitor factual information on vendors, subsidies and technologies.

Despite this possibility, the Government of Nepal has been averse to publishing data online, and, even in cases that are made public, they are often provided in relatively unusable formats which have been limiting researchers, coders and developers to properly use them. As such, the real profile of energy consumption and investment across the country remains unknown.

But, there is some good news. Nepal is headed in that direction with some promising initiatives focused on open energy data. Last year, the World Bank Group’s Open Aid Partnership held a data literacy bootcamp, at which participants were oriented to make use of open data and visualize the data in more illustrative ways. Journalists and civil society representatives like myself learned how to find crucial energy data that is usually embedded in documents and reports that can be verbose and dense. With this new information we were able to geocode Nepal’s solar energy system alongside cook stoves, allowing us to visualize, and easily comprehend renewable energy investments. Visually representing this data allows us to see patterns and trends that can and should inform the policy dialogue of the government and international donors.

As Nepal is preparing to provide energy access to all by 2017, it is crucial for the public to have access to energy data in order to analyze the energy use patterns and trends, helping to strategize the technology interventions and minimize the resource waste. Data literacy workshops, hackathons, and other such open data initiatives by the Bank and others are helping to harness demand for this data. We just need to ensure supply.

 

Clean Cooking Solution Nepal 2013: Inforgraphics

The then Prime minister of Nepal, Mr. Babu Ram Bhattarai while inaugurating the first ever celebrated Renewable Energy Week back in January 25, 2013 declared that by 2017 every households will have an access to clean cooking solutions thereby reducing the severe health risks to rural women and girls who typically spend most of their time in kitchen preparing foods for the family. [See here and here for some quick facts on the state of Nepal's energy mix.] As a lead agency to implement clean cooking solution in Nepal, Alternative Energy Promotion Center(AEPC) has been planning for some fundamental change in its approach to speed up the clean cooking campaign so as to effectively materialize the slogan, which somehow couldn’t gain the momentum in 2013 arising various budgetary constraints and structural challenges. Nevertheless, Here are few info-graphics showing some of the clean cooking project interventions during 2013 made by AEPC through its national and sub-national outreach agencies.

A typical sight of a rural kitchen in Nepal, often smoke filled with limited ventilation (Photo: Bibek Kandel) A typical sight of a rural kitchen in Nepal, often smoke filled with limited ventilation (Photo: Bibek Raj Kandel)

Districtwise ICS installed during 2012-2013 in Nepal through AEPC Support

Top 10 Districts with maximum number of ICS installations during 2012-2013

Number of Metallic Cooking Stoves installed during 2012-2013 in Nepal through AEPC Support

(more updates on solar cookers and biogas installations during 2012-2013 will be soon uploaded)

-Bibek Raj Kandel