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Renewable Energy Policy and Development in Nepal. Dr. Govind Raj Pokharel Executive Director September 24, 2008. Government of Nepal Declared F/Y 2008/09 Alternative Energy Year. Policy Trend and AEPC.

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Renewable Energy Policy and Development in Nepal

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Renewable Energy Policy and Development in Nepal

Dr. Govind Raj Pokharel

Executive Director

September 24, 2008

Government of Nepal

Declared F/Y 2008/09

Alternative Energy Year

Policy Trend and AEPC

  • Importance of Alternative Energy Technologies was recognized during the 7th Plan Period (1987-1992)

  • The development of the Energy Sector was given special priority during the 8th Plan (1993-1998). Objective was to reduce the growing gap between urban and rural areas

    Establishment of AEPC as Government Body (1996)

Introduction - AEPC

  • National Executing Agency - RE programmes and Projects.

  • Government institution under MoEST- semi autonomous status.

  • Mandate: Promotion and development of RETs: Mini/Micro hydro power up to 1000 kW, Solar Energy, Wind Energy, Biomass Energy (biogas), Geothermal Energy, Energy Efficiency!

  • Objective of AEPC establishment

    • to popularise and promote the use of alternative/renewable energy technology

    • to raise the living standard of the rural people,

    • to protect the environment and to develop the commercially viable alternative energy industries in the country

  • Vision of AEPC

    "An institution recognised as a regional/ international example of promoting large-scale use of renewable energy and a national focal point for resource mobilisation"

Policy Trend and AEPC

  • One of the main objectives in 9th plan was to promote large Scale promotion of RETs for Poverty alleviation

  • Objectives of 10th Plan:

  • Promote and disseminate RETs as the powerful mean to enhance the livelihoods of the rural people for the poverty alleviation (increase purchasing capability)

  • Reduce the consumption of traditional energy sources

Approach of RET promotion

  • Demand driven programme

  • Involvement of Community, Local Bodies (DDCs/VDCs) and NGOs-promotion and quality control

  • Private sector responsible for manufacturing, supply, installation and after sale services of the RETs system

  • Govt.’ technical support in terms of training, information, guidelines and quality assurance

  • Collaboration with NGOs, Local Bodies and academic institutions

AEPC & Its Programs

Mobilization, Capacity Building, Subsidy and



Private Sector

Demand & Investment

RET Supply

Promoting Agencies (Gos, NGOs, INGOs)

Roles and Responsibilities of AEPC

  • Short, medium and long term policy and plan formulation

  • Monitoring and Evaluation

  • Promotion of RET Development Programmes;

  • Standardisation, Quality Assurance and Monitoring

  • Chanelise Subsidy and Financial Assistance

  • Co-ordination of (I)NGOs and Private Sector and

  • Strengthening Organisation working in RET.

Government’s Strategy

  • Emphasis will be given for locally available resources and skills

  • Priority will be given to programmes which are aimed at the integrated implementation for supporting the social, economic and environmental sustainability.

  • Subsidy policy will be revised as per need in order to increase the access of rural households/communities to rural energy technology and provide maximum benefit to them

Existing Policies

  • Renewable Energy Subsidy Arrangement and RE Subsidy Delivery Mechanism introduced and implemented

  • Rural Energy Policy, 2006

  • Tax and VAT Exemption

  • Biogas Credit Unit

    • Credit Support for the Biogas Plant Installation

Financial Incentives/ Promotional Measures

  • Subsidy Based on capacity installed and HH benefited

  • Subsidy Delivery to users thru private companies by deducting from the system cost

  • Prospective manpower needed to private sectors are trained on Govt. cost

  • Tax and VAT Exemption in import of system/components

  • Biogas Credit Unit

    • Credit Support for the Biogas Plant Installation

Physical Progress of RETs in Nepal

3 Y Interim (2007-2010)Plan for AE

Other Plan of AEPC

  • Sensitize all Nepalese by Celebrating Alternative Energy Year

  • Promote Bio-fuel (Bio-diesel and Bio-ethanol) to blend in diesel and petrol ( at least 10% Ethanol)

  • Promote Wind Energy

  • Solar PV in urban areas and Connection to grid

  • Promotion of biogas in urban HH based on waste

  • Adaptive R & D on Hydrogen Energy and other technologies

  • Promotional activities on Energy Efficiency

Solution to Energy Crisis Cooking/Boiling/Heating

Household waste biogas plant/ Phuksin Biogas plant feeding agro-waste

Solar Cooker


Solar water heater

Efficient Cooking Devices

Solution to Energy Crisis: Transportation

More than 23 plants found in Nepal have the oil content as high as 80%

About 13,600 kL of resin and turpentine was produced by 12 industries and Nepal’s potential about 27,300 kL

About 1 million Kilo-liter of bio-diesel can be produced in Nepal per year if planed and developed properly.

Main Challenges in RETs

  • Lack of technical personsin the RET sector

  • Lack of access of information to the people of the remote areas

  • Un-affordability i.e. low income of the people to use the technology especially Dalit, Marginalized and remote areas

  • Connecting several MHP/MMHP to mini-grid and ultimately to the grid wherever technically financially feasible

  • Lack of coherent policy in the sector

Areas needed to be focused in RET

Developing manufacturing base (above 100kW)

Capacity building (Designers to installers & operators)

Financing (Commercial Banks and Local Financial Institutions)

End-uses/productive applications

Adaptive R & D

Strategies adapted recently

Decentralization (establishment of DEEU/S in 72 DDCs)

Draft 3 tier Monitoring

MOUs for optimizing subsidy , integrated development

Technical Capacity Building for Designing MHP system, Small Solar Home System, ICS, Wind etc

Thank You

Any Questions??

For further information:

Alternative Energy Promotion Centre

Khumaltar, Lalitpur

Ph- 5539390/5548468



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