RETs for MSCIs in Nepal

Opinion | The Nepal Weekly | April 20, 2021

By Purna N. Ranjitkar

Hydropower development is taking a good speed since a few years in Nepal. Nepal Electricity Authority (NEA) and Independent Power Producers are constructing a number of hydropower plants. So far hydropower plants to generate 1,400 MW of electricity have been installed. NEA, the government utility agency and private entrepreneurs share almost half and half shares.  Many such hydropower plants will generate electricity within a few years to connect to the national electricity grid. The hydropower generation will be 3,000 MW in next few years and 5,000 MW will be in further few years.

Similarly, some Solar PV systems installed to generation for megawatt of electricity have been successfully connected to the national grid. Some other such projects are under construction. Although in small amount of electricity to be generated wind technology and bio-gas plants are also under constructions. They also are expected to contribute to electricity generation by diversified technologies for electricity generation. Thus, the principle of ‘energy mix for energy security’ will be in a visible shape and size in future.

Taking as alternative energy technologies, Nepal has been successfully using Micro hydropower technology, Solar thermal, Solar PV, Biogas plants and Improve cooks stoves. Wind energy also has been installed to generate small amount of electricity. These technologies are installed in off-grid locations. The objectives taken are lighting by electricity from micro hydro, solar pv, drying agricultural products from solar thermal and control air pollution and consume reduced amount of firewood from improved cook stoves.

In the later phase, Solar PV Pumping for drinking water and irrigation have been widely used. Solar PV systems are also installed for meeting energy requirements of educational, health and communication institutions. Electricity generated by micro hydro is used for agro-processing and small commercial uses also.

The Industrial Policy, 1992 of Nepal government has classified labour intensive industries related to country’s tradition, art, culture and traditional industries mobilising special skills or local raw materials and resources as traditional cottage industries. According to Nepal Industrial Policy,  2076, that industry which uses up to 10 kW electricity for production are called industry.

Small scale industries, on the other hand, belongs to the group of industries which have investment up to Rs. 50 million and are operated with help of outside labour ranging in the most cases from 10 to 25 heads.

Cottage and small scale industries play a crucial role in the process of economic development of developing countries like Nepal, The importance of cottage and small scale industries are mentioned as follows. Generation of employment opportunities, easy to establish, utilisation of local resources are the importance of such industries. Likewise, such industries play positive role as basis of the development of large scale industries, foreign exchange earning source, preservation of local arts and culture, contribution to national income are also beautiful parts of cottage and small industries.

The loss of opportunities caused by the coronavirus pandemic around the world had affected Nepal’s cottage and small industries also. However, earlier, it was estimated that there were around 300,000 cottage and small industries in Nepal.

Most of such industries run by manual works and required energy is fulfilled by burning firewood or coal or diesel.

To larger extend, manual works may be mechanised utilizing small machines and tools powered by electricity and oven and furnace may be fuelled by bio-fuel (briquette or palettes) or electricity. Such modification will reduce cost of productions in the long run. So that manual workers will have to switch to other industries. That will generate additional industries and employment.

Thus, cottage and small industries can be accessed electricity from renewable energy technologies of electricity from national grid. Electricity generated from micro hydropower plants, solar-mini grid, Solar-wind mini-grid, Solar PV system and electricity from bio-gas plants can be utilised in the off-grid locations.

The Constitution of Nepal and other legal provisions have authorised local level governments (municipalities and rural municipalities) to issue licence to the electricity generation entrepreneurs. Likewise, cottage and small scale industries work with close coordination with local level governments. Therefore, these two stakeholders can collaborate in electricity generation in their locality for cottage and small industries where local governments support entrepreneurs in legal and financial issues while utilisling renewable energy technologies entrepreneurships will employ local workers, ultilise locally available raw materials and taxes to the local governments. Therefore, the government agencies, associations of local governments, umbrella organisation of cottage and small industries, private sector who manufacture or import, supply and take responsibility for after-sales-services of renewable energy technologies  cooperate each other so as renewable energy technologies can be well utilised to work in non-polluting environment and without consuming fossil fuel.