If there is anything the young Nepalis remember from their secondary education, it is that Nepal has 6,000 rivers and rivulets with a total potential of generating over 50,000 MW of electricity. Decades have passed since this fun fact was included in the school curriculum, yet this information is still fresh in our memory even though Nepal’s current installed electricity generating capacity is well below its potential.
The progress made with regards to electricity development is, nonetheless, commendable. According to the World Bank, Nepal is among the top three countries with the highest increase in national electricity access rates from 2006 to 2016. 2000 mini-grids with a total capacity of 30 MW have brought electricity to 1.5 million people since 1996. The days of over 16 hours of load-shedding are long gone, and power cuts are an infrequent and a minor inconvenience now compared to a major hindrance to Nepal’s economy as it previously was. The use of solar-powered lights in the streets of major cities has replaced the rather unreliable halogen lights, making the streets safer for vehicles as well as pedestrians. The combining of various sources of renewable energy through micro-grids, such as the hybrid plant (solar and wind energy) in Makawanpur district, has electrified several rural areas at a low cost. The Urban Electric Mobility 2019, operated under the coordination of Sanjha Yatayat, Lalitpur Metropolitan City, and Safa tempo entrepreneurs, has extended loans to convert batteries of Safa tempo to Lithium-ion batteries and has developed a demo project of four eight-seater EVs which will run in Lalitpur. The use of electric cooking has increased since the 2015 economic blockade with the help of government policies. As laudable as the progresses have been, Nepal still has a long way to go before we fully utilize our electricity potential.
As vital as being knowledgeable about the energy potential of the home country is, the education system has failed to provide the right scenario to the youth. Most youths are unaware of the true capacity and potential versus the current state of energy in Nepal. For instance, Nepal has an installed hydropower capacity of merely 1,385 MW out of its 42,000 MW of technically viable capacity, representing a little over 3% of this potential. Apart from hydropower, Nepal has an estimated potential to generate over 100 MW of electricity from micro-hydro projects, 2,100 MW from solar energy and 3,000 MW from wind energy. Despite our enormous potential in renewable energy, Nepal has been dependent primarily on fossil fuels and biomass.
Currently, 68% of primary energy consumption in Nepal is from biomass, 25% is from fossil fuels, 3.5% from hydropower, and the remaining 3.5% from solar power, biogas, and micro-hydropower.
In 2019, USD 1.3 billion worth of fossil fuels was imported which accounted for 13.5% of total imports in Nepal. Since Nepal has no known petroleum reserves, hydroelectricity and other forms of renewable energy are crucial to reducing the trade deficit caused by fossil fuel imports. Harnessing the true potential of our electricity generation potential would not only reduce our dependency on fossil fuels but also create possibilities for export and economic development.
Further, on the transport front, since 63% of all imported fuels in Nepal were consumed by the transport industry alone, it is imperative that Nepal promotes the use of electric vehicles (EVs) in its public transport system as well as for private use. There was a time when Nepal was ahead of the world in its inclusion of electric vehicles (EVs) in its public transport system with the trolley bus which was operated successfully until it eventually became a victim of poor management and political interference. The interference continues to this day, with Nepali car dealers blocking legislation related to the import of reconditioned EVs and conversion of fossil fuel vehicles to EVs. The replacing of polluting Vikram Tempo in the 1990s with electric Safa Tempo but allowing Vikram Tempo operators to cheaply import fossil fuel-powered buses and minibuses is a prime example of one step forward and two steps back. Safa Tempos, the electric three-wheelers, are suitable for the narrow inner roads of the valley. The number of Safa Tempo and people traveling via the tempo would increase if the government reintroduced suitable incentives for those entrepreneurs as well as subsidized the replacement of less efficient and energy dense lead-acid batteries with Lithium-ion batteries. Incentives need to be provided to corporations and cooperatives such as Sundar Yatayat and Sanjha Yatayat who have introduced large electric buses. Large fossil fuel buses are significant polluters mainly due to the use of old vehicles and lack of timely maintenance as well as the weak implementation of policies to curb such polluters by the government. The youths, with their increased awareness of the impacts of climate change on their future and eagerness to reduce their carbon footprint, will be keen to travel via public transport if the problems of overcrowding, sanitation, and punctuality are improved.
Time and again, Kathmandu has been listed as the topmost polluted city in the world. With the increasing living standards of people in the valley and unrelenting urban migration, the number of cars and motorcycles on the road is on the rise.
Out of 15,000 units of vehicles sold annually in Nepal, only 1,200 are electric vehicles, indicating that Nepali consumers prefer fossil-powered two-wheelers which have higher speed and range compared to electric two-wheelers.
However, since India and China have committed to producing only EVs by the year 2030, vehicles with varieties of size, speed and range to suit various preferences will soon be widely available. Since all the vehicles in Nepal are imported, the widespread adoption of EVs in Nepal is possible in the near future. But to sustain such adoption, Nepal needs to increase its production of electricity, strengthen its distribution network, as well as introduce policies that encourage the use of EVs instead of vehicles run by fossil fuels. The recent budget for FY 2021/22 has reversed the previous budget’s decision to tax EVs as a luxury vehicle by repealing excise duty on battery-operated cars and reducing custom duty to 10%. This has brought the price of electric vehicles similar to that of their fossil fuel counterparts and will potentially increase their sales. Another major challenge to the adoption of EV is the lack of charging stations, for which NEA has made commitments to construct 50 of them with the assistance of the Asian Development Bank across the country within a year. The question is if those commitments will be completed on time. Nepal needs to follow in the footsteps of its neighbours and create a consistent long-term plan to encourage the use of EVs.
For the country to reach its full potential, it is most essential to influence its youth as involving them would mean opening the doorways to innovation at a digital age which has far-reaching effects. As a youth myself, I look forward to the days when I can take pride in Nepal’s approach to renewable energy, which is far more praiseworthy and controllable than the arbitrary pride in being the Land of Buddha and Mount Everest.
Sneha Shrestha is an ACCA affiliate with interests in business valuation, financial planning, mergers and acquisition, and strategy consulting. She has previously worked in audit and accounting for few years before joining Beed. She is currently working as a beed fellow at beed management.
