Experiences Sharing on Micro/Mini Hydro Power Development in Nepal Ram Prasad Dhital Executive Director

Outline Nepal’s Renewable Energy Overview RE Sources- Prospects, Potential and Progress Institutional Arrangement Policy Landscape of RE Sector RE Policy, Delivery Mechanism and Financial Incentives NRREP and Micro/Mini Hydro Power Sector Development MHP Development Trend Implementation Modalities and Challenges Key Actors Success Factors Few Recommendations for Myanmar

Energy Sector Overview Total Energy consumption (FY 2012/13)- 10,038 Million ToE High dependence on traditional fuel and imported petroleum products Rich in water resources but an acute energy crisis. Access to Electricity: 69 % of total population (14 % from RETs) Residential sector consumes about 87% of the total energy Per capita energy consumption is about 16 GJ. (One of the lowest in the world) Sources: Economic Survey 2014 (MoF), APR 2013(NEA), UNDP 2013

DEVELOPMENT IN ENERGY MIX Traditional: Fuel wood, Agro- residue, Animal Residue Commercial: Petroleum, Coal, Electricity Renewable: Solar, MH, Bio-gas, Wind etc. Sources: Economic Survey 2014 (MoF), APR 2013(NEA), UNDP 2013

Energy Sector Institutional Overview HYDRO Coordination Renewable MOFALD Petroleum Renewable DDC/DEECCS Source: NPC 2013

AEPC APPROACH FOR PROgram Implementation Public Private Partnership Demand side Supply side Public sector Private sector Manufacturing Supply & installation After sales services Internal quality control capacity building Technical & financial assistance Coordination Quality assurance Procedures/ Guidelines Subsidy Users/ Beneficiary

Institutional Solar System & Solar Water Pumping: Micro-Hydro (MH) Domestic Biogas Wind Improved Water Mill (IWM) Improved Cook Stove (ICS) Biofuel Solar Home System (SHS) Solar Dryer & Cooker Institutional Solar System & Solar Water Pumping:

Existing and Future Policies on RE Sector Rural Energy Policy, 2006 Renewable (Rural) Energy Subsidy Policy, 2012 RE Subsidy Delivery Mechanism, 2013 Additional Financial Support to Micro Hydro Policy, 2013 Financial Act, 2014 – Exemption of VAT & Custom Duty in RE equipments/materials AEPC Act (in the process) RE Act including FIT (in the process) 20 Yrs RE Perspective Plan (in the process) Establishment & operation of Central RE Fund (in the process)

NEW INITIATIVES AND APPROACH PROJECT BASED APPROACH TO SINGLE FRAMEWORK MODALITY APPROACH SECTOR WIDE APPROACH (SWAP) Programme Name: National Rural and Renewable Energy Programe(NRREP), July 2012- July 2017

National Rural and Renewable Energy Programme Single Program Modality Starting Date: 16 July 2012 Duration: 5 years Budget: USD 170 Million Support: UNESCAP

NRREP Components Institutional Support Technical Support MICRO HYDRO AEPC/ NRREP Gender Equality and Social Inclusion Carbon and Climate Change Productive End Use Central Renewable Energy Fund Monitoring and Quality Assurance

MICRO HYDRO TREND IN NEPAL AEPC/NRREP Target ~25000 kW Total ~36000 kW ~28000 kW (AEPC) AEPC ESTABLISHED IN 1996 NRREP Year 2013 2014 2015 2016 2017

Institutions for Development of M/MHPs AEPC / NRREP Users / Developers RSCs, DEECCUs Financial Institutions Consulting Firms Installer Companies

Roles & Responsibilities of the key stakeholders Create Enabling Environment Demand generation and Quality Service delivery Govt/AEPC Policy Planning Resource Mobilization Funding Monitoring Private Sector Service Delivery Survey/Design Fabrication Installation After Sales USERS Construction Operation Management and Ownership DDC/DEECCSs Coordination (Line Agencies/Programs/Private sector and stakeholders) Local Fund Mobilization (DEF) Information Dissemination (Awareness on technology and quality, Demand Generation) Monitoring Regional Offices/Service Center Community Mobilization Project Development and Processing for Funding Construction Supervision Building Bridge between Pvt sector , Local Agency and Users Awareness on adoption Demand generation Building bridges between users and PSOs, DDC Facilitation and coordination

Mini/Micro Hydro Project Approval Cycle Demand Collection Preliminary Survey Detail Feasibility Study TRC / Conditional Approval Contract Award Final Approval Const. & Installation T & C / POHV OneYear Guarantee Users / RSCs / DEECCUs REF RSCs / DEECCUs Existing MHP Approval Cycle Installer / MQA (POHVI) Consulting Firm AEPC / CESC / REF Users / Installer REF Users / Developers

Key Challenges in Micro/Mini Hydro Ever increasing cost of installation(raw material cost, transportation etc) Longer project completion period Lack of productive energy use (Low Plant Factor) Inadequate revenue stream to cover operation and maintenance expenses Installations not immune to natural disasters like floods and landslides Private financial institutions skeptical by and large

Generating Social Capital through CM Community Mobilization (CM) Organization Development Skill Enhancement Environment Management Capital Formation Community Mobilization (CM) Technology Promotion Women’s Empowerment

Key TO Success 1- Favorable Policy Environment Promulgation of Rural Energy Policy 2006 Reduce dependency on traditional energy & conserve environment by increasing access to RETs. Increase employment and productivity through RETs. Increase living standard of rural population by integrating RETs with social and economic activities. 11/19/2018

Key TO Success 2- Strong Quality Assurance System Guidelines Pre feasibility study Guidelines Detail feasibility study Guidelines Tariff Setting Guidelines Model Biding Document Technical Standards Biogas, Solar and Micro Hydro Renewable Energy Test Station (RETS) to test and verify the quality standard Pre qualification: Consulting Firms Manufacturers, Fabricators & Installers Quality Supervisor, POV inspectors 11/19/2018

Key TO Success 2: Quality Control, Monitoring & Evaluation Beneficiaries’ direct involvement from the beginning Third party monitoring and verification Penalty system for non-compliance up to the disqualification of the companies Mini/ Micro hydro – 100% checking and verification Biogas/ solar systems/ metallic ICS- sample checking

Key TO Success 3- Appropriate Institutional Mechanism Centre Autonomous AEPC Centralized Capacity Building Centre and Service Providers; CRT/N,BSP/N,NMHDA,SEMAN,NBPA Prequalified private sector organizations District DEES Regional service centers and support organization Branch offices of qualified private companies Users network Community Community Based Organizations, Cooperatives and functional groups

Success: A Long Journey Pilot In few places Lessons learned (1996-2003, 5 districts) Expansion Based on lessons learned expansion in 2003-2007 25 districts Replication In other districts and region and neighboring countries Mainstreaming Policy formulation, government commitment (2006 RE policy) Up-scaling

Possible Insights for Myanmar Dedicated Ministry/Institute mandated for development of off grid electrification from various renewable energy sources Financial support Technical Assistance Careful design of the program, with all stakeholders in mind on their roles, responsibilities, core competence and limitations Suitable package for training, orientation, capacity building and exposure to relevant institutions/scenarios. Effective team building with competent members having previous similar experience Identifying roles for the development partners(Donors) Money(for subsidy etc) Policy level support Robust selection mechanism of partner organizations with clearly defined exit plan

Thank you very much for your kind attention !!! Ram Prasad Dhital Email: ram.dhital@aepc.gov.np Phone: 01-5539390/9851076005 www.aepc.gov.np