Seminar presentation Date:17th April 2012

1. Sustainableinnovation Project – The economic and Social aspects of energyproject in nepal Seminar presentation Date:17th April 2012 Hanna Nopanen, Prabin Khadka, Wahaj Kazi Athar, HuiZhong Zhang, Rabindra Dhungana

2. Content • Study of Location • Present scenario of the site • Necessary development of infrastructure • Investment • Maintenance cost and maintenance related issue • Technological assist • Logistics involved • Promising policies of RE in Nepal • Government´s role • Outcome of the project

3. Location under study • Dadeldhura districts- lies in the Mahakali zone, far western region of Nepal. • Dadeldhura is district headquarter. • Covers an area of 1,538 square km • Population of 126, 162 • 25 village development committee • The majority of inhabitants are Hindu • Rural and remote area

4. Trditional life style and superistition • The main occupation is agriculture. • People goes to work abroad • Hindu religion • Brahmin, chhetri Doteli culture • Education difference according to gender • Level of education poor but nowadays awareness is increasing • Governed by the Nepal goverment. The VDCs, Municipality,DDCs are the responsible body.

5. Present scenario of the site • Very low energy consumption per capita per annum • No extension of national power grid • Firewood are the major of sources of energy for cooking purposes and kerosene and animal waste for lightning purpose • Use of water mills for the agro-processing activities • Use of solar energy but very inefficient just for drying grains and boiling water • Importantly, people looking for the sustainable form of alternative source of energy

6. Necessary development of infrastructure • Need to capacitate the locals about the know how of the technology and its benefits • Identify the local partners as such service providers, manufacturers (R & M), financial co-operatives for fund mobilizing and quality assurance organization. • Need to train the few personnel's about the technology and its working mechanism for the sustainability of the technology • Capacity building program for the entrepreneurship development at micro level and matching fund for the investments for the same entrepreneurship development

7. Promising policies for RE in Nepal • The overall goal of this policy is to contribute to rural poverty reduction and environmental conservation by ensuring access to clean, reliable and appropriate energy in the rural areas. • The capacity of the local bodies will be improved for playing a leadership role in rural energy project planning, implementation, monitoring and evaluation at the local level and involvement of cooperatives, user groups, NGOs, private sector will be increased. • Economic activities will be implemented in integrated way for increasing energy consumption capacity at rural level by development of Micro Hydro, Biogas, Solar Energy Systems, etc. • Subsidy arrangement for the government of Nepal to promote the RE in rural part of the country

8. Investments and profitability • Wind • Solar • Hydro

9. How to getinvestments? • Potentialsources of funding • Privateinvestors • Small scale via internet (shareholders), localownership • Largescalecompanies operating in the area / global • Ownership, operations • Role of subsidies – neededbutnotnecessarilysustainable • International, government • What is the beneficialchoice for optimalfunctionality? • Balancebetweenbenefit for localpeople and benefit to investors

10. Coststructure for windpower • Mid-sizedturbine (850 kW-1500kW) • Turbine ~75-80 % • Foundation 1-6 % • Electric installation 1-9 % • Grid connection 2-9 % (150 – 200 k€/km) • Consultancy 1-3 % • Land 1-3 % • Financial costs 1-3 % • Road construction 1-3 % (200-300 k€/km) • Total costs 750-1100 €/kW (on land) for windpower in general

12. Costs of solarpower • Lifespan 25 yrsormore for panels (~40) • 5-15 for batteries • Photovoltaicpotential in Nepal 3,6-5,9 kWh/m2 in a day, 300 days of sun in a year

13. Investmentcosts per peak Watts

15. Hydro power • Hydro potential of 83,000 MW (theoretical) • Expensive to build, cheap to use • Profitableifcostslessthan 400 €/MWhproduced in a year • Investmentcosts appr. 2000-3000 €/kW • Ifuse 5000 h / year

17. On profitability… • Largescalemoreprofitablethansmall • Co-operation? • Long lifespanrequired to meetcosts • Suitability of eachform of productionmustbeconsidered • Solareasiest to apply • Largepotential of hydro, butnotsoeasy to apply • Windproblematic – someareasprofitable, somearenot • Security of supply • Profitability of projecthas to bequaranteed – otherwiseproblems in allphases • Largeinitialinvestments (1 MW windturbine ~1,5 million €) • Popularityhassteadilydecreasedinitialinvestmentcosts

18. How to makeitworthwhile? • Co-operation • Local, national, neighbourcountries • Private and governmental • NGOs? • Planning beforeacting • What is needed, where is itneeded? • Starting with the easiestinvestments and workingonwardsfromthere • Solarsystemsalready in useboth in areas of the gridnetwork (support) and in ruralareas • Steps in the dark • Riskanalysis

19. Maintenance of machinary The total maintenance cost varies with increasing amount of preventive maintenance! Optimum level of preventive maintenance at minimum total maintenance cost!

20. O&M costs Possible to obtain standard contracts covering a considerable portion of the WT’s total lifespan. Particularly influenced by turbine age.

21. O&M costs – Wind Turbines

22. O&M costs – Solar panels • The solar pv panels need almost negligible maintenance • lifespan of over 40 years. • the efficiency of solar panels doesn’t reduce much even after 20 years. • should get the photovoltaic system serviced once every 5 years and ensure that the panels remain clean.

23. O&M costs –Hydropower • They have higher operating costs and typically shorter operating lives (about 25 years) • Maintenance costs are only minimal when looking at some other sources of energy production. • The plant life can be extended by relatively cheap maintenance and the periodic replacement of equipment (replacement of turbine runners, rewinding generators, etc). • Typically a hydro plant in service for 40 - 50 years can have its operating life doubled.

24. Prepaid electricity plan Advantages of prepaid electricity plan • Residents can pay a certain number of kilowatt hours depends on their using amount. • Prepaid electricity gives residents control over how much money they spend. So long as residents take attention on how many electricity supply credits they have then don’t have to worry about disconnections. • There is no default since unpaid or overdue pay. • Electricity supplier can more quickly than postpaid to get back their investment costs and/or decrease the budget. • No necessary to post the bill monthly, thus saving human and other resources input.

25. Role of Governing and Monitoring bodies • GOVERNMENT • Identification of policy, strategies and regulatory frameworks on bioenergy to enhance proactiveness, and minimizing the risks of bioenergy development for small-scale producers. • Regional cooperation and quality assurance. • LOCAL AND PRIVATE SECTOR • UN, NGO’s and local private investors • Establishment of a regional bio-energy network to promote ecological information sharing on bio-energy-related technology, investments, and environmental ecological issues.

26. Outcomes of the project • Energy supplies to the masses. • Creating livelihood. • Creating entrepreneurship. • Foster Public Private Partnerships that will promote development in investments. • Improving standard of living. • Mitigating climate change.

27. International recognition. • Incentives for further development. • Capacity building for policy-makers and practitioners. • Local economy boost. • Reduction of dependence on conventional energy sources. • Waste management simplified (economically feasible to treat). • Fewer health impacts related (no ash or smoke). • Forests preservation. • Integration of SD.

28. Thankyou for yourinterest! Anyquestions?