Using different energy sources, suppliers and transportation means and routes to reduce dependency on a single resource or provider is energy diversification. A country that diversifies its energy mix insulates itself from energy disruptions and strengthens its energy security.
Current forms of supply may be insufficient, or inappropriate from the energy security or environmental perspective. Their prospects depend on the available resources, costs compared with competing alternatives, environmental impacts, cost of investment and infrastructure requirements. Unconventional source of energy like solar, bagasse and wind power have developed rapidly in recent years, and are seen as promising avenues in the context of Nepal.
In order to understand the economics of energy, diversification of both supply and consumption must be explored.
The term “energy mix” refers to the combination of various primary energy sources used to meet energy needs in a given geographic region. In the Nepalese perspective various sources of renewable energy like wood, biofuel, hydro, wind, solar, geothermal, waste and biogas can contribute in the energy mix.
The composition of the energy mix depends on:
Policy determined by historical, economic, social, demographic, environmental and geopolitical factors.
Significance of Energy Mix
The national energy mix is important as a strategic plan to fulfill the objectives of energy policies. The electricity mix, which is the core of the energy mix, is the basis for the national electric-power policy and directly affects the expansion of electric-power facilities and the investment plan. Hence, it is important for future planning and development of electric-power infrastructure. In addition, the established electricity mix of primary energy sources has become a major issue in energy policies. Most countries try to build a stable electric-power supply system by planning the optimal electricity mix and designing corresponding policies. To provide a stable electric-power supply, a country generally needs an electricity mix comprising various fuel sources.
Exploitation of renewable energy sources was not easy and expensive in the past while with advancement in technology and large-scale production it has now become a viable reality. It facilitates in reducing global carbon emissions and the pace of investment has greatly increased as the cost of technology is in the decline and efficiency continues to rise.
Of course, renewables are an infinite source of power in the Nepalese perspective – the ultimate definition of long-term certainty.
As per the global scenario, it is observed that majority of oil and gas sources are concentrated in certain regions, many of which are challenging and expensive to exploit, whereas renewable energy is mostly locally available. It provides security of supply, helping a nation reduce its dependency on imported sources. It plays a significant role in addressing our energy needs by replacing energy imports with clean and reliable home-grown electricity with the added bonus of fantastic local economic opportunities.
Diversity in energy supply contributes to strengthen national energy security. A diversified portfolio of energy assets contributes to a long-term, sustainable energy strategy that protects the power supply from market fluctuations and volatility. Then proverb ‘never put all your eggs in one basket’ is applicable in this context also. That is why it is a wise move to maintain a share of renewable energy in the nation’s energy mix to suggest that a country should not rely on a single source of energy.
Hydropower of different sizes large, medium, mini and micro including run off, peaking and storage; solar, biomass, biogas, bagasse and wind are the various pillars of energy mix composition in Nepal. Technology has brought various renewables into the center of the global energy mix to begin with. It is now offering great prospects for unlocking the untapped energy that remains in different parts of the world.
Nepal aims to achieve universal access to clean, reliable and affordable renewable energy solutions and they are expected to reduce dependency on traditional and imported energy by increasing access to renewable energy.
The use of solar energy is increasing the reliability of traditional electricity in Nepal. Private installations of solar roof top panels are more frequent in urban areas and are used as a backup during the power outages. Recently NEA has formulated guidelines for net metering for domestic and other consumer who have installed solar panel in their premises,
On average, Nepal enjoys 6.8 sunshine hours per day with intensity of solar radiation ranging from 3.9 to 5.1 kWh per meter square, with a commercial potential of solar power for grid connection estimated to be about 2,100 MW.
In 2015, Nepal and the World Bank signed an agreement to develop a 25 MW solar project that will eventually be connected to the national grid and the works at site are in progress regarding its development. It is the largest renewable energy plant under construction in the country. Solar and Wind Energy Resource Assessment project has made an attempt to map the wind resource potential in Nepal and has shown a very good prospect of wind energy with the prediction of about 3,000 MW. Techno-economically feasible capacity of peaking and storage type of hydropower plant is not exactly known yet in Nepal, though various estimations present different pictures.
A community-based solar approach such as solar irrigation pumps, solar mini-grid, solar arsenic water treatment plants, and solar street lights have the potential of benefiting the community people by ensuring food security, arsenic-free pure water, improved socio-economic conditions in off-grid areas and address the consumer load diversity. Some government interventions are urgently required in this area along with focus on policy matters.
Diversity in Power Generation
There are many reasons why Nepal shouldn’t rely only on hydro generation. Due to the effects of climate change, river-flow may be affected on a long run. In such case relying only on run-of-river hydropower generation may result in different energy generation pattern than expected. Further, civil structures account for around 60 percent of infrastructure in hydropower projects, which are more vulnerable to natural calamities like earthquakes, landslide and flash floods. In the perspective of resilience to natural disasters, solar PV plants which consist of less than 5 percent of civil structures, are less vulnerable to such natural calamities.
From the perspective of generation management, solar energy can play an important role. Contrary to current trends, solar can be used to serve the daytime base load and water in peaking ROR can be saved to meet the evening base and peak load. The necessity of diversifying the energy mix has also been emphasised by the “National Energy Crisis Mitigation Plan and Ten Year Electricity Development Plan 2016”, which has envisioned an energy scenario of 40-50 percent from reservoir-type or pump storage hydro, 15-20 percent from peaking run-of-river hydro, 25-30 percent from run-of-river and 5-10 percent from other renewable energy sources like solar/wind. The white Paper published in 2018 by Ministry of Energy, Water Resources and Irrigation has reviewed this energy mix composition as follows:
Reservoir and Pump Storage: 30-35 percent, Peaking Run of the River: 25-30 percent, Run of the River: 30-35 percent and Renewable/Alternative Energy: 5-10 percent
Energy portfolio diversification is key for sustainable electricity supply. If there is a short fall in one source, then other source can sustain the supply.
Centralised distribution is known to be affected by transmission and distribution losses, whereas a distributed system can be set up to transmit to regions near the sources.
The recent “Grid Connected Alternative Energy Development Guidelines2074” published by Ministry of Energy, Water Resource and Irrigation has specified that Power Purchase Agreements (PPA) will adhere to a flat rate of Rs7.30/kWh, for electricity from solar, wind and biomass sources with no provisions to escalate this rate. This rate was fixed based on the current average posted rate applicable for RoR hydropower.
In order to manage a stable supply, Nepal needs to shift from hydro dependence and achieve a healthy energy mix employing different renewable technologies. Thanks to its topography, Nepal can achieve a stable, reliable, sustainable, efficient and affordable energy which can be achieved through optimal utilization of available renewables with appropriate energy mix.
Cogeneration as a New Source to the Electricity Mix
Harnessing electricity through cogeneration stands as a promising new source in the electricity mix of Nepal. Nepal government and NEA have already set the policy framework required for harnessing electricity through cogeneration for self-consumption and selling the surplus to the national grid in harnessing cogeneration from sugar industries.
Wind and Solar Power
Wind and solar are less prone to large-scale failure because they are distributed and modular. Distributed systems are spread out over a large geographical area and a severe weather event in one location may not disrupt power of an entire region. Modular systems are composed of numerous individual wind turbines or solar arrays. Even if some of the equipment in the system is damaged, the rest can continue to operate.
Renewable energy sources (RES) have significant potential to contribute to the economic, social and environmental energy sustainability i.e naturally replenished. energy efficiency and long-term availability
However, connecting renewable energy to the power grid will impose new challenges. Local issues such as steep power fluctuation, voltage stability, voltage control, harmonics and capacity are the areas that needs to be studied in the context of Nepal.
Reliable energy trading and energy banking as well as maintaining environmental sustainability through the development of renewable energy mix in the systems is a urgency. Although technology exists today to handle the challenges, we must accept the bitter truth, though unwillingly, that we have become unable to integrate renewable mix as desired.
Nepal’s power system is predominantly hydropower- based. However, there are positive indications that Government of Nepal has started to focus on the development of renewable sources, too. To pursue this, Nepal needs to have a coherent energy policy to utilize various sources of renewable energy as may be economically viable. That’s why it’s high time to access an optimal mix of energy generation from energy security perspective which is suitable for Nepal. Energy security should be evaluated by taking into consideration market dynamics prevailing in the country and the quantum of energy not supplied due to system disturbance which can be one of the several criteria for its determination.
Unless an optimal mix of energy generation is enforced through a national policy, the power sector development agenda cannot gain full momentum towards attaining energy security in the country.
(Sapkota, is an Assistant Manager of Nepal Electricity Authority)