Distributive policy

Where is the synergy in Nepal’s energy policy?

Nepal has set itself the goal of net zero emissions by 2045. It’s an ambitious goal, but not impossible, if only the government had a good energy policy, energy experts say.

Several actors are attached to the energy sector in Nepal and they all work with distinct visions, policies and priorities. There is no general policy or umbrella institution to give them direction.

Madhusudhan Adhikari, executive director of the Alternative Energy Promotion Center, says policymakers are themselves misguided.

“They think that energy exclusively means electricity when the contribution of electricity in our energy mix is ​​less than 10%,” he says. “When we discuss energy in Nepal, we discuss this small percentage.”

The main sources of green energy in Nepal are hydro, solar and wind power. So far they are independent of each other. Companies and institutions engaged in the production and distribution of energy do not work for a single purpose.

To reach net zero, policymakers should consider phasing out fossil fuels and biomass, as well as increasing domestic consumption of clean energy and exporting excess energy. There is a desperate need for better coordination between government agencies.

In 2017, the Asian Development Bank advised the Nepalese government to formulate and implement a national energy security policy. The need for such a policy had become vital, especially after the country adopted a three-tier system of government.

Nepal’s current energy policy puts hydropower at the forefront. This approach needs to be reoriented because the country does not use enough modern and clean energy.

“We have the Ministry of Energy, but it functions largely as a ministry of hydroelectricity,” Adhikari explains. “It shows a lack of clarity in vision.”

The electricity sector is not doing well either. The Nepal Electricity Authority (NEA), the electricity utility, has been unable to provide enough electricity to rural areas. The distribution of electricity by transmission lines in some mountainous and hilly areas with difficult topography is either impossible or very expensive.

This is where alternative energy could have filled the void.

Responsibility for formulating a comprehensive energy policy rests with the Department of Energy. But the task is almost impossible due to the frequent changes of government. Successive energy ministers are more inclined to announce populist agendas instead of working on long-term policy.

The National Planning Commission and the Water and Energy Commission are also responsible for guiding the government. Yet these two bodies have done little to revise Nepal’s energy policy to reflect changing needs.

“The priority is mainly hydro, then solar,” says Shailesh Mishra, chief executive of the Independent Power Producers Association. “There hasn’t been a lot of deliberation on a comprehensive energy policy.”

During the Panchayat regime, Nepal had no energy policy. The NEA was responsible for managing the country’s hydroelectricity. In 1992, the Hydropower Development Policy was formulated, with the main objective of motivating the private sector to invest in hydropower development.

Hydropower policy remains more or less the only energy policy in Nepal. Some key policies that the government introduced over the past three decades were also related to hydropower, such as the National Water Resources Policy, National Energy Efficiency Strategy, Irrigation Policy, Hydropower Plan. Nepal Water and Water Resources Strategy.

Policy discussions for other sectors began in earnest in the 2000s. In 2006, the Rural Energy Policy was enacted to provide biomass technologies and off-grid micro-hydro systems for rural electrification. Later, there were initiatives to explore alternative energy sources in solar, wind biogas and micro-hydropower.

It was only in 2013 that Nepal presented its “energy vision” which speaks of an integrated policy to manage the energy sector.

“Discover, explore, develop and sustainably manage all potential energy resources available in the country,” the document states. It also points to the need for a “big power umbrella organization” to implement a uniform energy policy, as well as a national energy regulatory commission to coordinate with all state agencies.

Maheshwor Dhakal, joint secretary at the Ministry of Forests and Environment, underlines the urgent need for a comprehensive energy policy to phase out the use of fossil fuels and switch to clean energy.

The absence of such a policy, he says, signals a glaring lack of coordination among key state institutions in the energy sector.

“Along with this policy, Nepal also needs a separate ministry to deal with energy-related issues, especially since we have already committed to embrace green energy,” Dhakal adds.

Krishna Prasad Oli, a former member of the National Planning Commission, however, blames the lack of coordination rather than the energy policy per se.

He says that before undertaking any work on an integrated energy policy, there should be a thorough study of possible areas for improvement.

“Let’s identify the bottlenecks first,” he says, cautioning against jumping to the conclusion that a one-size-fits-all policy will solve everything.

Oli firmly believes that the heart of the problem lies, once again, in the lack of coordination and regulation. “A letter from the Nepal Electricity Authority takes a whole month to reach the Ministry of Energy. Many of these failings have gone unaddressed.

Oli also advises energy experts and policy makers to consider energy security which has been given very little thought.

Nepal is heavily dependent on imported fuels, but there are no plans yet to prevent the kind of acute energy insecurity seen after the 2015 blockade.