1.0 What do Energy Transition, Energy Resilient and Low Carbon Economy mean ?

‘Energy Transition’ refers to the major structural change in energy supply, consumption and emission. It is a global shift from switching high carbon-intensive petroleum /fossil fuel-based energy systems to cleaner, more sustainable and low carbon-intensive renewable resources. This is also called energy system transformation which aims to reduce emissions during energy production and consumption process. It involves adopting energy efficiency measures while electrifying various sectors such as residential, transportation and industry, and integrating innovative technologies like battery storage and hydrogen energy. Energy transition plays a crucial role in achieving both economic resilience and carbon reduction measures.

Specifically, ‘Energy Resilience’ is the ability of an energy system to continue functioning during disruptions. It is the ability of an energy system to anticipate, adapt to, and recover quickly from disruptions while ensuring a reliable and sustainable energy supply. It is essential for minimizing the impact of natural disasters, cyberattacks, supply chain disruptions, and energy crises. Energy resilience is crucial for building a sustainable and secure energy future. By investing in innovative technologies, diversifying energy sources, and strengthening infrastructure, societies can ensure a reliable, adaptable, and disaster-resistant energy system.

More importantly, the ‘Low-Carbon Economy’ is an economic system that reduces the consumption of high carbon emission-intensive fossil fuels and associated greenhouse gas emissions. It ensures long-term sustainability by integrating clean energy, efficient resource use, and climate adaptation strategies. It aims to maintain adaptability and sustainability in the face of environmental, economic, and social challenges through a) Expanding renewable energy; b) Improving energy efficiency in buildings, industries, and appliances; c); Electrifying transportation and industrial sectors using clean energy d) Implementing carbon pricing and regulations to reduce emissions; and e) Promoting sustainable agriculture and forestry to enhance carbon sequestration.

‘Energy Transition for Resilient and Low Carbon Economy’ is the process of shifting the production and consumption of energy sources from high carbon-intensive fossil fuel types to clean renewable type energy resources. Such a switching process is important for getting multiple benefits. On the one hand, it reduces carbon emissions and associated health and environmental impact; trims investment in importing fossil fuel; and develops coping capacity during its short supply. On the other hand, it encourages innovating renewable energy technology and adapting infrastructures to minimize climate-related risks; and ensuring a sustainable and resilient economy in the long run.

Moreover, a ‘Resilient Economy’ ensures economic stability amid environmental and economic uncertainties created by economic downturns, climate disasters, energy crises etc. It integrates risk management and sustainability through addressing the issues and challenges of: a) Energy Security – for reducing dependence on imported fossil fuels and ensuring stable energy supply; b) Climate Adaptation – to strengthening infrastructures to withstand climate-associated risks.; c) Diversified Economic Growth –  for reducing reliance on fossil fuel industries and investing in sustainable sectors; d) Disaster Preparedness – for developing early warning systems and emergency response mechanisms; and e) Social Inclusion – to ensure fair access to clean energy, jobs, and economic opportunities. Hence, a Low- low-carbon economy is set to contribute to achieving global targets to reduce reliance on high-emission industries and adopt greener alternatives.

2.0 Why Energy Transition, Energy Resilient and Low Carbon Economy important for Nepal ?

Energy Transition helps to maintain a resilient and low-carbon economy mainly through strengthening production and use of renewable energy supply systems and reducing carbon emissions. Decentralized energy systems like micro grids as a local renewable energy production reduce reliance on centralized power grids, making communities more self-sufficient. Stable energy prices with subsidized renewable energy production systems lower dependence on volatile fossil fuel markets and prevent energy price shocks. It also creates green job opportunities while shifting to clean energy industries rather than fossil fuel-dependent sectors, and investment in technological innovation drives economic competitiveness and sustainable growth. Clean energy can be adopted in multiple sectors like a) Replacing excessive use of biomass in the domestic sector; b) Expanding electric vehicles in the transportation sector; and c) Reducing energy loss during the transformation process in the industrial sector reduces carbon emissions, and d) Implementing energy-efficient processes and circular economy models reduces carbon footprints.

3.0 How can Nepal be fovourable platform to apply this module ?

3.1 Catalyst Factors for Implementation

3.1.1 Nepal’s Current Energy Consumption Status

In FY 2022/23, Nepal’s total energy consumption was 532.41 Peta joules, reflecting a 16.81% decline from the previous year. This reduction was mainly driven by decreased reliance on traditional fuels and fossil fuels. Traditional biomass sources (fuelwood, agricultural residue, and animal waste) still dominate Nepal’s energy consumption, accounting for 64.17% of the total share, though overall consumption of traditional resources has declined by 17.2%.  It is important to note that electricity consumption has grown by 21.18%, and the use of petroleum products has dropped by 16.14% compared to the previous year. Decreasing the use of biomass and fossil fuels seems well balanced by increasing the use of renewable resources.

Although their contribution remains relatively small, renewable energy sources are gradually gaining importance in Nepal’s energy mix. Nepal has made notable progress in advancing SDG 7, which focuses on ensuring universal access to affordable, reliable, sustainable, and modern energy resources. In 2021, renewable energy accounted for 74% of the country’s total final energy consumption, highlighting Nepal’s strong dependence on hydropower and other renewable resources.

3.1.2 Energy Consumption Capacity of Users

In 2022/23 per capita primary energy consumption and electricity consumption in Nepal were about 1,610 kWh, and 380 kWh respectively in comparison to the global average figure of 19,836 kWh and 3,204 kWh respectively. It showed Nepal’s per capita energy consumption lower, though such status varies significantly across countries because of disparities in industrialization, economic development, climate, and energy efficiency status across nations.

Energy Ladder is a module that describes how households and communities shift from using traditional, inefficient energy sources to modern clean energy sources, in terms of energy transitions, as their socioeconomic status changes over time. The Environment Protection Agency (EPA) developed Fuel Tiers categories to identify the quality of fuels as per their amount of pollutants. Tier 1 fuels are the traditional biomass fuels like firewood, crop residues, dung, and charcoal that are used in open fires or simple stoves and are inefficient, high indoor air pollution, and labor-intensive collection. Likewise, kerosene, coal, and improved biomass stoves are known as Tier 2 or Transitional fuels that are more efficient and convenient than traditional fuels but still associated with environmental and health risks.  Similarly,  Electricity, LPG, Natural gas, and Renewable energy (hydro, solar, wind, biogas) sources that are highly efficient, low emissions, and convenient fuels that support economic development and improved quality of life are categorized as Modern energy sources with highest tier -Tier 3. More specifically, Tier 3 fuels are cleaner fuels. The EPA developed tier 3 standards in 2017 to reduce the amount of sulfur and volatile organic compounds in gasoline to reduce emissions from vehicles.

3.1.3 Global Commitments

There are specific pressure-driven international policies set for energy transition and minimizing climate change impact. More specifically, the Sustainable Development Goals (SDGs) 2015 – for peace and prosperity for people and the planet- the commitment of all United Nations member countries to be achieved by 2030 (UN, 2017); Paris Agreement (COP21), 2015 to limit global warming well below 2°C above pre-industrial levels; Carbon Neutrality Goal (COP26), 2021 for net-zero emissions by 2050, as well as UAE Declaration (COP28), 2023 for climate change, health and sustainable development; EU Green Deal, 2020 for modern resource efficient and competitive economy for achieving carbon neutrality by 2050; US Inflation Reduction Act, 2022 for major investments in clean energy and emissions reductions, etc.

Likewise, the National Transport Policy (2001); Environment-Friendly Vehicle and Transport Policy (2014); National Environmentally Sustainable Transport (EST) Strategy (2015); and Promotion of Electric Vehicles (EVs) (2016) are the main transport policies and initiatives in Nepal that reflect its commitment to building sustainable and resilient transport systems. Likewise, the Hydropower Development Policy (2001); Nepal Renewable Energy Subsidy Policy (2016); National Energy Efficiency Strategy (2018); Renewable Energy Efficiency Strategy Plan of Nepal (2018); Alternative Energy Subsidy Policy Nepal (2021); and Nepal Energy Efficiency Program (NEEP) are the main energy sector policies in Nepal through which the Governments set emissions reduction targets and regulations for .carbon pricing; green finance and investments to promote low-carbon innovations.

4.0 What are Solution Option for Energy Transition, Energy Resilient and Low Carbon Economy ?

The better solution options for energy transition for a resilient and low carbon economy will be: 1) Demand Side Management; 2) Energy Efficiency; and 3) Use of Alternative Energy Resources. Demand Side Management is a strategy used to control electricity demand by incentivizing customers to modify their energy consumption patterns during peak hours or reduce their overall energy consumption as much as they can but without compromising minimal requirements. Demand-side management can be materialized through using five different technologies, namely:  a)- Carbon Technology which includes the use of renewable energy sources such as solar, wind, hydro, and bioenergy; b) Energy Efficiency Technology which involves the application of LED lighting, smart grids and meters, and energy-efficient appliances; and c) Electrification Technology refers to the use of electric vehicles (EVs) and heat pumps. Likewise, d) Hydrogen and Energy Storage Technology which includes the use of green hydrogen and battery storage systems; and e) Carbon Capture and Storage (CCS) Technology Captures CO‚  Emissions from Industrial Processes and stores them underground to prevent entering the atmosphere.  Energy efficiency means using less energy to perform the same task either by using highly efficient fuel, or/and by eliminating energy loss during the transformation process. Production and use of renewable energy resources at the local level like- biogas, micro-hydro, improved cook stoves, wind, solar, and heat pumps require intermediate technology but produce clean and efficient renewable resources.

5.0 What are the major Challenges and Opportunities?

Shifting to a resilient and low-carbon economy poses many economic, technological and policy difficulties.  Fossil fuel shares major energy consumption in Nepal and 3/4th part in global energy consumption. The transportation and Industrial sectors heavily depend on fossil fuels which cannot go long if the production and use of alternative energy resources like bioenergy are inadequate to replace them. High investment in imported fossil fuels not only impacts on national economy but also creates an energy crisis during its short supply.  It needs alternative options for demand-side management and energy efficiency.

Nevertheless, there is a positive silver lining already raised for it which makes us optimistic to adopt this module. Electricity production and consumption rates are increasing while the use of fossil fuel and biomass fuel are in decreasing trend. The use of electric vehicles and hydrogen fuel cells is taking a wider share and has created an optimistic environment for Nepal.

If all the conditions are favourable, it provides significant opportunities for sustainable development, employment generation, and energy stability directly and indirectly. For instance, if Biogas is produced to its optimal potentiality (of 0.3 million in Nepal) and full production capacity of the digester, it will replace the use of biomass in the domestic sector. Research showed that one biogas plant can reduce 19.3 tCO2e per year which is beneficial for environment, health, and economy through carbon credits (Subedi, 2015). Advancing the energy transition, embracing clean technologies, and enforcing robust policies through investing in a green economy today will enable Nepal and the global community to be sustainable both from environmental and economic perspectives ensuring long-term prosperity, health, and resilience for future generations.

6.0 Conclusion

In conclusion, the energy transition is a critical pathway for Nepal to achieve a sustainable, resilient, and low-carbon future. By prioritizing renewable energy adoption, energy efficiency, and innovative technologies; Nepal can reduce its reliance on traditional and fossil fuel-based energy sources. Investing in these initiatives today will pave the way for a prosperous and sustainable future for generations to come.

(Dr. Subedi is Chairperson of Krishnam Smart Engineering Solution Pvt. Ltd. Nepal & Research and Innovation Department Head at Himalaya College of Engineering, Nepal)

References

1.    WECS, 2024. Energy Synopsis Report, 2024 

2.    Sustainable Development Goals (SDGs,)

3.    National Energy Efficiency Strategy, 2075

4.    Renewable Energy Subsidy Policy, 2073 BS

5.    NEA, 2024 World Energy Outlook, 2024

6.    Subedi, S.K.A, 2015  “Domestic Biogas Production and Use in Nepal …”

Contact shantisubedi8@gmail.com