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Energy Scenario Energy consumption per capita is very low in Nepal.

The total energy consumption for the FY 2003/2004 was 363 million GJ or almost 13 GJ per capita. Out of the total consumption, the residential sector consumed 90%, the agriculture sector consumed 1%, the industrial and transport sectors consumed 4% each, and the commercial sector consumed 1%. 86% of the energy used was derived from bio mass, petroleum fuel accounted for 9%, electricity and coal 2% each and other renewables 1%. For the same period, the total rural energy consumption was 288 million GJ with 97% of that being consumed by the residential sector.
Transport, 4% Industrial, 4% Commercial , 1% Agriculture, 1%

Petroleum , 9%

Electricity , 2%

Coal, 2%

Other Renewabl es, 1%

Residentia l, 90%

Biomass, 86%

Fig: Energy consumption by sector and Energy consumption by fuel type

Biomass The biomass mentioned here constitutes wood, animal waste, twigs and dried leaves, hay and other biomass fuels. The contribution of fuelwood in 2002 was 76.20% and that in 1988 was 84.77%. Heavy reliance on biomass has led to rapid deforestation in Nepal. Nepal lost 2.25 million hectares (ha) of its forest cover between the year 1978 and 2005, 1.2 million ha of it between 1990 and 20051. More than 13,000 square kilometers of area is protected for wildlife conservation. So, the reliance on bio mass cannot be sustained if Nepals forest cover is to be protected. Majority of the biomass fuel is used for cooking in rural areas, 63.9%. There has been increasing trend of use of LPG (Liquified Petroleum Gas) in the urban areas but the rural area largely depends on bio mass. Biomass accounted for 98% of the total energy consumed in the rural areas.

Forestry Department, Food and Agriculture Organization of the United Nations, Global Forest Resources Assessment 2010: Nepal, (Rome: 2009), http://www.fao.org/docrep/013/al579E/al579e.pdf

0 1978 1985 Year 1990 1994 2000 2005

Area in Million Ha 2 3 4

6 5.605 5.504

4.817 4.268 3.767 3.349

Fig: Nepals forest cover

Petroleum Fuels There are no known oil reserves or coal mines in Nepal. So Nepal imports almost all of its coal and oil from India. Nepal Oil Corporation, the government monopoly that handles the import and distribution of most of the petroleum fuel is the sole importer, Indian Oil Corporation being the sole exporter. Coal import is however deregulated and private businesses are allowed to import coal. Nepal imported petroleum fuels worth NRs. 70 billion in the FY 2010/11 up 35% from the FY 2009/2010. The quantity imported had increased by 8.9% but the rising fuel costs led to the higher increase in expenditure.2
1,400,000 1,200,000

1,143,970 1,050,528 887,430 752,466 725,622

Total Imports (KL)

1,000,000 800,000 600,000 400,000 200,000 0

2006/07

2007/08

2008/09

2009/10

2010/11

Fiscal Year

Fig: Yearly total imports of petroleum fuels in Nepal

Prasain, Sangam, Oil imports jump 35pc to Rs 70b, ekantipur. July 22, 2011. http://www.ekantipur.com/2011/07/22/business/oil-imports-jump-35pc-to-rs-70b/337810.html

Between FY 2006/07 and FY 2010/11, the quantity of diesel imported recorded the highest increment with an increase of 118%, petrol was next with 91% followed by LPG at 70% and ATF at 57%. The quantity of kerosene imported decreased by 77%.

FY 2006/07 2007/08 2008/09 2009/10 2010/11

Petrol (KL) 98,435 101,624 128,372 162,902 187,762

Quantity Imported Kerosene Diesel (KL) (KL) 299,419 192,576 303,212 489,219 608,065 651,920 152,167 77,798 52,714 43,350

LPG (KG) 93,562 96,836 115,812 141,171 159,286

ATF (KL) 63,650 68,534 73,660 82,824 99,990

Table: Quantity of petroleum fuel imported from FY 2006/07 to 2010/11

Load shedding (announced power cuts) restarted during the dry winter season of 2006 after a few years of comparatively better supply situation. Nepal had not implemented load shedding since 2000 with the commissioning of 60 MW Khimti hydropower plant. The duration of load shedding during 2006 was as high as 7.5 hours. By the end of FY 2010/11, this figure had leapfrogged to 16 hours a day. This crisis contributed immensely to the increase in petroleum fuel as diesel and petrol were used to fuel electricity generators, LPG for cooking, heating and even lighting in some cases. The increase in ATF (Air Transport Fuel) can be attributed to the increase in air travel, not only due to remoteness of many places but also security situation.

Electricity Electricity was only 2% of the total energy consumption as of 2003/04. Only about 40% of the population has access to any kind of electricity, out of which 33% is from the national grid and 7% from other sources, mainly isolated micro hydropower stations. Most of the electricity in Nepal comes from hydropower stations, 92.332% as of FY 2009/10 with thermal power accounting for 7.654% and solar for 0.014%3. Nepal has been facing long hours of load-shedding (planned power outage due to unavailability of electricity) during dry seasons for many years now. Since 2009, there has been load-shedding for as long as 16 hours a day.

Source: Nepal Electricity Authority (NEA), Annual Report 2010, (Kathmandu, 2010), p. 85 http://www.nea.org.np//reports/annualReports/BvTeH9hxFHAnnualReport2010.pdf

Nepal has huge potential for hydropower development with the theoretical estimate at 83,290 MW and the economically viable potential at 42.133 MW. But as of 2011, only 644.33 MW of this had been developed, a paltry 1.53%. By the end of FY 2008/09, there were around 2,000 micro hydropower stations in Nepal with a combined capacity of almost 14 MW.

Solar technology is also used for generating electricity but the contribution in terms of output is negligible. However, it has played a vital role in rural electrification. By 2007, about 150,000 rural households in Nepal had access to electricity through solar technology, most of them for lighting. There have been efforts on harnessing wind energy in Nepal. The first was a 20KW wind power project installed in the mountainous village of Kagbeni in 1987 with the financial and technical assistance of the Danish Government but it was shut down after some time due to lack of maintenance. Nepal does have some small-scale wind power generators. Alternative Energy Promotion Center (AEPC) has built six hybrid power systems (400W wind and 150W solar). An international charity that assists in poverty reduction through innovative use of technology, Practical Action had invested in eighteen 200W wind turbines by 2001. Nepal Army has constructed 10 turbines of 1KW each in Nagarkot and the students at Kathmandu University (KW) had designed and set up two 1.5KW turbines, using local material such as wood. AEPC subsidizes projects generating electricity to benefit remote areas that can't access the national grid.4

Nepal has an estimated theoretical hydropower potential of 83,290 MW and economically feasible potential of 42,133 MW. As electricity can replace many traditional sources of energy in most of the applications and is one of the cheapest sources of energy, hydropower is by far the source of energy with highest growth potential in Nepal.

Mallapatty, Smriti, Where the wind blows, Nepali Times, March 19, 2010, Nation section