Final Report

on
Study on Role of Renewable Energy Technologies in Climate Change
Mitigation and Adaptation Options in Nepal

4,500,000

4,174,940

4,000,000
Total GHG Mitigation
Potential per year

37,308

15,300

500,000

Solar home
System

1,000,000

Stand alone
MHP

Cumulative GHG
Mitigation Potential
per year
417,659

1,500,000

154,893

2,000,000

113,613

2,500,000

2,009,312

(ton CO2e)

3,000,000

1,426,855

3,500,000

IWM

Mini-grid
MHP

Mud-ICS

Metal-ICS

Biogas

Submitted to:

Alternative Energy Promotion Centre (AEPC)

National Rural and Renewable Energy Programme (NRREP)

Climate and Carbon Subcomponent

Khumaltar, Lalitpur, Nepal

Submitted by:

Tribhuvan University, Institute of Engineering

Center for Energy Studies (CES)
Pulchowk, Lalitpur, Nepal

September, 2013

Executive summary
The traditional energy system is the main contributor to greenhouse gases (GHGs) emissions and,
therefore, to climate change whereas renewable energy (RE) emits no or help to reduce the GHGs
emission. In addition to this benefit, renewable energy technologies (RETs) provide multiple socioeconomic benefits in many development deficit (rural) areas and may serve as a good reliable option for
adaptation to climate change. Now, the central question is whether RETs can be a triple win-win strategy to
address mitigation adaptation development nexus, without or little trade off of development needs of
people; therefore, can it be a foundation on which a climate resilient development path can be based on?
There are some studies carried out to document impacts of RETs but their contribution on adaptation to
climate change has been shortchanged.
This study tried to answer this central question. The study carried out meta-analysis, to the extent possible,
of RETs related studies, both at national and international level. By drawing some theoretical derivations
and used to link with adaptation and development processes.
Adaptation is being defined in different ways and various typologies of adaptation are available in literature.
Despite various dimensions of adaptation proposed, most of the studies revealed that RETs provide energy
services to meet basic human needs (e.g., lighting, cooking, space comfort, mobility and communication)
and to serve productive processes (e.g. irrigation, food processing) in addition to reducing the GHGs
emission.
The study reviewed a dozen of case studies which showed RETs provide socio-economic and
environmental benefits to people that contribute for adopting and ensuring better adaptation to climate
change based on the local context. The analysis showed that RETs contribute to adaptation processes by
contributing on reducing drivers of vulnerability of people, improving adaptive capacity and addressing
climate change risk. The analysis also showed that existing RETs contribute more on reducing vulnerability/
increasing adaptive capacity than climate risk. RETs are very effective options to address many climate
change and development challenges, and can, at the same time, provide the adaptation and development
benefits.
But, these are not without challenges either. Financial, technical, institutional, policy and legal issues are
major challenges to promote RETs. For example upfront cost, cost of systems change (from traditional
energy to renewable) and policy failures are major shortcoming in our context. Hence, it is important to be
proactive for improving policy framework, reducing cost of technology, providing financing opportunities and
creating robust regulatory framework for effective monitoring and learning. There is no liberty of inaction so
renewable energy can be good base for a triple win strategy for climate compatible development in Nepal.
On the mitigation side, this study analyzed the GHG mitigation potential from the installation of different
RETs after 2012 in Nepal by using accounting method. It shows that altogether 4.17 million tons of CO2e of
the GHG emission can be mitigated by deploying seven major RET technologies consisting of biogas,
1

improved water mill (IWM), stand-alone micro-hydro plants, mini-grid micro-hydro plants, solar PV home
systems, mud-ICS and metal-ICS after 2012. In terms of shares of the RETs in GHG mitigation, biogas can
contribute the most with GHG mitigating potential of 2 million tons of CO2e (48.1% of the total GHG
mitigation potential from selected RETs) with the installation of 722,774 number of biogas plants after 2012.
This is followed by the installation of 898,487 number of both mud and metal ICSs with the GHG mitigation
potential of 1.8 million tons of CO2e (share of 44.2%). The stand alone and mini-grid micro-hydro plants can
contribute 170 thousands ton of CO2e (4.1% of the GHG mitigation potential) by installing 73.2 MW of their
combined capacity. IWM and Solar PV home system can contribute 114 thousands ton of CO2e (share of
2.7%) and 114 thousands ton of CO2e (share of 0.9%) of the estimated GHG mitigation potential from
selected RETs by installing 22.7 kW of IWM and 215,903 solar PV home system respectively.
In terms of initial technology investment required for implementing above mentioned RET options to
mitigate GHG emission, ICS requires annualized initial technology investment cost below NRs 63 per ton of
CO2e mitigation. Biogas and IWM would require annualized initial technology investment cost of NRs 71.66
per ton of CO2e and NRs 276.94 per ton of CO2e mitigation respectively. The annualized technology
investment cost for mitigating GHG emission from stand alone and mini-grid micro-hydro plants are
estimated as NRs 1,180.22 per ton of CO2e and NRs 1,549.79 per ton of CO2e mitigation respectively.
Solar PV home system would require the annualized initial technology investment of NRs 1,258.50 per ton
of CO2e mitigation.
This indicates that though moderate level of initial investment is required for promoting RETs, the GHG
mitigation potential seems to be quite promising. Keeping in views of these benefits of GHG mitigation,
government should focus on creating an enabling environment to invest in RETs for harnessing domestic
energy resources, improve energy securities, maintain sustainable ecosystem and follow towards low
carbon economic development path.

Key words: adaptation to climate change, mitigation potential, renewable energy, socio-economic
development, vulnerability, climate risk, technology investment cost

Acknowledgements

We take this opportunity to thank the National Rural and Renewable Energy Programme (NRREP) Climate
and Carbon Subcomponent for trusting us to carryout this very important study.
Our sincere thanks go to Prof. Dr. Govind Raj Pokharel, Executive Director of Alternative Energy Promotion
Centre (AEPC) for his kind help and support in completion of this project. My special thanks go to Mr. Raju
Laudari, Assistant Director and Programme Manager, National Rural and Renewable Energy Programme
(NRREP) Climate and Carbon Subcomponent for his continuous valuable guidance, suggestions and
support. Similarly thanks also goes to Mr. Surya Kumar Sapkota, Assistant Director of Alternative Energy
Promotion Centre and Mr. Prem Kumar Pokhrel, Program Officer- Climate Change for their valuable input.
Many-many thanks go to the participants of the stakeholder workshops for their valuable comments and
suggestions which make this study at present state.
My sincere thanks go to study team members; Dr. Shree Raj Shakya, Mr. Ram Chandra Khanal and Mr.
Mr. Krishna Adhikari who have contributed as expert in respected fields.
And lastly I am very thankful to those who directly and indirectly helped us in completion of this project.

Prof. Dr. Tri Ratna Bajracharya

Team Leader

Study Team
1.

Prof. Dr. Tri Ratna Bajracharya

Team Leader

2.

Dr. Shree Raj Shakya

Climate
Change
Mitigation Expert

3.

Mr. Ram
Khanal

Chandra -

Climate
Change
Adaptation Expert

4.

Mr. Krishna Adhikari

Media and Publication

Expert

Abbreviations and Acronyms

AEPC
NREEP
CBS
CO2e
CES
EIA
FEC
GHG
GoN
GWh
ICS
IEA
IWM
kW
kWh
MW
MWh
NEA
PV
PJ
RE
RET
TPES
WECS

Alternative Energy Promotion Centre, Nepal

National Rural and Renewable Energy Programme
Central Bureau of Statistics
Carbon Dioxide Equivalent
Centre for Energy Studies, TU, Nepal
Energy Information Administration
Final Energy Consumption
Green house Gas
Government of Nepal
Giga-Watt Hour
Improved Cook Stove
International Energy Agency
Improved Water Mill
Kilo-Watt
Kilo-Watt Hour
Mega-Watt
Mega -Watt Hour
Nepal Electricity Authority
Photo Voltaics
Peta Joule
Renewable Energy
Renewable Energy Technology
Total Primary Energy Supply
Water and Energy Commission Secretariat

List of Tables
Table 5.1:

Continuum of adaptation (vulnerability to impact approach)

Table 5.2:

Adaptation based purpose

Table 5.3:

Benefits of rural electrification to MH connected households

Table 5.4:

impacts of RETs on Poverty Reduction Indicators

Table 5.5:

Likely impacts of scaling up the REDP MHS project in Nepal

Table 6.1:

Socio-economic and Energy-environmental Indicators of Nepal

Table 6.2:

GHG Mitigation Potential of Renewable Energy Technologies in Nepal

Table 6.3:

Investment Requirement of Renewable Energy Technologies for GHG Mitigation in Nepal

List of Charts and Figures

Figure 4.1:

Methodological steps for the study

Figure 5.1:

Sustainability dimensions and their interrelationships

Figure 5.2:

A heuristic model of relations of RETs, adaptation and development

Figure 5.3:

Conceptual framework of nexus of RETs, adaptation and development

Figure 5.4:

Impacts/role of RETs on economic, social and environmental aspects

Figure 5.5:

Potential impact of RETs on Millennium Development Goals

Figure 5.6:

A heuristic mapping of the role of selected RETs for adaptation to climate change

Figure 6.1:

Primary Energy Supply in Nepal during 1995/1996 to 2008/2009, PJ

Figure 6.2:

Fuel Share in the Primary Energy Supply, %

Figure 6.3:

Sectoral Energy Consumption in Nepal during 1995/1996 to 2008/2009, PJ

Figure 6.4:

Sectoral Share in Energy Consumption, %

Figure 6.5:

Sector wise GHG Emissions in the Base Case, million tons CO2e

Figure 6.6:

Sectoral Shares in GHG Emission in the Base Case, %

Figure 6.7:

GHG Mitigation Potential of Renewable Energy Technologies in Nepal, ton CO2e

Figure 6.8:

Annualized Technology Investment Cost @ 10% interest rate, NRs/ ton CO2e

Table of Contents
Executive Summary ....... 1
Acknowledgements ........ 3
Study Team ..... 4
Abbreviations and Acronyms .....5
List of Tables ....6
List of Charts and Figures ......7
1. Introduction ...9
2. Rationale ....9
3. Objective
4. Methodology

....10
....11

5. Climate Change Adaptation Analysis.. ....14

5.1. Climate change adaptation policy and programme ...14
5.2. Review and assess the contribution/role of renewable energy to climate change adaptation
...17
5.3. Major findings from the literature ......19
5.4. Role/contribution of RETs in adaptation and development Examples/cases ......24
5.5. Barriers for integration of RETs and adaptation ......35
5.6. Way forward .....37
6. Mitigation Analysis ......38
6.1. Relationship between Renewable Energy and Climate Change ..38
6.2. Energy System Development in Nepal......39
6.3. Greenhouse Gas Emission Evolution in Nepal ....43
6.4. Role of RET in GHG Mitigation Potential and Cost in Nepal .....45
6.5. Co-benefits of RET based GHG Mitigation ..52
References
Appendix

1.

Introduction

Alternative Energy Promotion Centre (AEPC) was established in 1996 with the objective of developing and
promoting renewable energy technologies with focus in rural areas of Nepal. Since then, AEPC has been
successfully implementing/executing several renewable energy programme/activities in Nepal. Nepal, along
with over 150 other nations, signed the United Nations Framework Convention on Climate Change
(UNFCCC) at the United Nations Conference on Environment and Development (UNCED) in Rio de
Janeiro in June 1992. Nepal ratified the Convention on 2 nd May in 1994, and this convention came into
force in Nepal on 31st July, 1994. Subsequently, Nepals Initial National Communication was prepared in
2004 and shared with the Parties through the Convention Secretariat. Between 1996 and 2006, the then
Ministry of Population and Environment (now the Ministry of Environment, Science and Technology) was
designated as focal point to implement the provisions of the UNFCCC.
In 2011, the Climate Change Policy was formulated which specifically points the need of assessment of
ongoing and likely impact of climate change in natural resources, including water resources and other
economic sectors. One of the targets of the policy is to formulate and implement a low carbon economic
development strategy that supports climate-resilient socio-economic development by 2014. Similarly, the
Ministry of Science, Technology and Environment was entrusted as the Designated National Authority
(DNA) to promote Clean Development Mechanism (CDM) projects in the country. In July 2010, a Carbon
and Climate Unit (CCU) was established in AEPC with responsibility to carry out the activities related to
climate change and to tap carbon trade opportunities while promoting Renewable Energy Technologies
(RETs) in Nepal including provide technical support to the ministry on climate change mitigation as well as
adaptation.
From July 16, 2012 AEPC is executing a five years National Rural and Renewable Energy Programme
(NRREP) which has a single programme modality. It is envisaged that no other programmes or projects
related to renewable energy promotion in Nepal will be supported or executed outside the NRREPs
framework. The AEPC/NRREP is further committed to updating knowledge on Climate Change mitigation
and adaptation options; further development a well diversified portfolio of RETs projects using different
instruments and establishing high quality performance assurance and monitoring systems.

2.

Rationale

Despite having only 0.4 percent of the total global population and being responsible for only 0.025 percent
of total GHG emissions in the world, Nepal is one of the most vulnerable countries in the world in context of
climate change. Nepal has experienced an average maximum annual temperature increase of 0.06 0C.
It has been identified that climate change has impacts on different areas including natural resources. On
the broad impact areas, vulnerabilities to energy resources can also be observed, for e.g. to the supply
potential of biomass energy resources (due to degradation in land use pattern, agriculture productivity,
9

migration, loss of lives etc). It means that climate change has implications to the current and future energy
demand and supply chain of the country as well.
On the other hand, the reinforcement of adaptation and mitigation to climate change needs a strong effort
to shift toward a low-carbon energy pathway both in terms of the energy infrastructure and the energy
production and consumption patterns that would support continued countrys sustainable development
while lessening the level of its GHG emission increases. In this context, RETs may represent an important
way for the country to support adaptation and enhance development, representing a more ecological
mitigation pathway with emphasis on the introduction and use of clean and resource-efficient technologies,
social and environmental sustainability and improved social equity.
Given the high potential of RETs in Nepal to contribute to both climate mitigation and adaptation, it is
increasingly important to understand clear role of these technologies in addressing both issues. Energy
linkages with promotion of RETs are not explicitly defined but it is a fact that energy acts as a cross cutting
tool in every social and economic development. Role of energy hence should be identified both for
mitigation and adaptation processes and therefore contributing to building a resilient national capacity.
The NAPA, endorsed by the GoN in 2010, lists a priority adaptation options for Nepals Energy Sector.
However, to ensure effectiveness of the proposed options, it is imperative to have an understanding on how
RETs can and could contribute to climate change issues both in energy and other sectors. So,
AEPC/NRREP intending to conduct the study on role of renewable energy in climate change adaptation
and mitigation in Nepal has awarded the task to Centre for Energy Studies (CES)/ Institute of
Engineering/Tribhuvan University. It is envisaged that this study will further support the GoN in
implementing climate change policy, NAPA and existing and future relevant strategy and plan based on
quantified data on potential role of RETs in both mitigation and adaptation options.

3.

Objective

The general objective of the task is to conduct research study to place Renewable Energy Technologies
(RETs) within the broader framework of climate change mitigation and adaptation options in the context of
Nepal.
The specific objectives of this task are to assess, identify and formulate suitable RETs adaptation and
mitigation interventions, innovations and technologies including potential regulatory and investment
mechanism in Nepal.

10

4.

Methodology

This study followed the standard framework as showed in Figure 4.1 for analyzing the role of renewable
energy technologies in climate change mitigation and adaptation options in Nepal. It involves intensive
literature review, conceptual model development, impact analysis, inception meetings and interaction with
stakeholders, presentation, review and documentation of the findings from this study.
4.1.

Methodology for Mitigation Analysis

The mitigation analysis was focused on determining the role of RETs in GHG mitigation, quantitative
potential of GHG mitigation from selected RETs, technology investment cost and other co-benefits
associated with GHG mitigation options through deployment of RETs in Nepal. The study follows the
following steps for mitigation analysis.
a. Literature review on role of RET in climate change mitigation
An intensive literature review has been done on the evolution of energy consumption and GHG emission in
the past in the country, interrelationship between RETs and climate change mitigation, methodologies
followed by other studies for determining the GHG mitigating potentials, documentation of mitigation
potentials and values of the relevant parameters used in existing studies, and integrated relationship of
RETs and climate change mitigation with other socio-economic and energy environment effects.
b. Assessment of GHG mitigating potential from RETs
Based on the literature review, a standard accounting model was developed to analyze the GHG
mitigation potential and technology investment cost associated with it. Data collected from literature
review were used to determine the techno-economic potential of introducing different RET options for
GHG mitigation and investment cost requirement.
c. Documentation and Finding of the Analysis
The results obtained from the analysis were cross verified with other studies for maintaining the realistic
picture and thus help the policy makers during development, revision and implementation on the policy
related to the RETs and climate change the country. Documentation with detail analysis of the study has
been done and share among the stakeholders for getting feedbacks to be incorporated in the final version
of the report.

4.2.

Methodology for Adaptation Analysis

Renewable energy technologies have a large potential to contribute to adaptation to climate change by
providing with a wide variety of socioeconomic and environmental benefits. However, the existing literature
has put much emphasis on the environmental benefits (including the reduction of GHGs), while
socioeconomic impacts have not received a comparable attention. These impacts include reduce work
11

load, diversification of energy supply, enhanced development opportunities, creation of a small and cottage
industry, employment opportunities, enhance human health and increase efficiency in their day to day work.
These benefits have usually been mentioned, but their analysis has been too general and a focus on its
contribution on adaptation to climate change (both adaptation actions and adaptive capacity) has been
lacking. Hence, there is a need to explore further on an integrated conceptual framework to analyze the
relation between RETs and adaptation to climate change and generate as evidences for policy influence
and action. The study has employed following processes.
a. Review existing literature and develop an integrated conceptual framework
This study developed an integrated conceptual framework which allows a comprehensive analysis of the
impact of renewable energy on climate change adaptation and also document some evidences how these
technologies have been instrumental for adaptation to climate change.
The study served as a starting point for the development of a more in-depth and comprehensive analysis of
RETs and climate change adaptation in Nepalese context that is useful for defining a critical role of RETs
not only to mitigation but also for adaption to climate change.
b. Impact assessment of RET
Impact assessments are an existing tool which is being used widely. The same methods has been used to
assess the RETs development benefits and adaptation services. The assessment was mainly based on
secondary information/literature - stocktaking of current situations through extensive review of relevant
documents. Various literature at national and international level were gathered to review role/impact of
RET on peoples livelihoods (social and economic) and natural resources (environmental) management in
order to draw a conceptual framework. The study reviewed the role of RET on various aspect of people
livelihoods such as employment generation, household income generation, demographic impact,
educational / knowledge impacts, social cohesion and human development, income distribution, tourism
and endogenous resource at household and/or community level. The review also analyzes actors
involvement and contribution on national economy. The review also explore how these impacts at local
level will enhance the adaptive capacity of at community and household level and major components of
adaptive capacity may include, creation of asset based, support in developing institutions and entitlements,
generation of knowledge and information, supporting innovation, and maintaining flexible forward-looking
decision-making (based on the findings of ACCRAs consultative process).
In addition, some specific expert interviews have been carried to capture some the specific evidences and
critical assessment of RETs on climate change adaptation. These analyses were used to develop a
conceptual framework as well as impact assessment of RETs on development benefits and adaptation
services.
c. Analysis considering Nepalese context and generate learning
Based on the conceptual framework and impact assessment, some lesson has been drawn and some
recommendations were made which would be useful for decision and policy makers.
12

The detail methodological steps/processes followed in this study is shown in Figure 4.1.

Signing of Agreement between AEPC and CES

Inception Meeting

Review Relevant Literature

Preparation and Submission of

Inception Report

Identification of Key Components/aspects of the RET in

terms of synergies among RETs and Climate Change
Mitigation and Adaptation efforts, RET development providing
both development benefits and adaptation services,

Prepare a theoretical framework strategy for adaptation

analysis
Prepare accounting model for mitigation analysis
Generate evidences on how RETs contribute to Climate
Change Mitigation and Adaptation

Draft report and sharing of key findings

Sharing of the Draft Reports for Comments

Revision and submission of final reports

Figure 4.1: Methodological steps for the study

13

Case studies

5.

Climate Change Adaptation Analysis

5.1

Climate change adaptation policy and programme

The Interim Constitution of Nepal of 2007 brings two articles on environment, related to the rights of citizens
and also the responsibility of the State. They include Article 16 Right relating to environment and health:
(1) every person shall have the right to live in a healthy environment and Article 35 (5) The State shall
make such arrangements as may be required to keep the environment clean. The State shall give priority to
the prevention of adverse impacts in the environment from physical development activities, by increasing
the awareness of the general public about environmental cleanliness.
There are a number of strategies, plans and policies relevant to climate change. Those include national
plans, climate change plan, sustainable development plan, environmental plan and other sectoral plans.
Some of the important plans and policies are discussed as below.
The National Conservation Strategy of Nepal (1988): This was the first important national strategies
which provided a new conservation friendly development processed and aimed to satisfy the basic needs of
the people of Nepal (whether material, spiritual or cultural); to ensure the sustainable use of Nepal's land
and renewable resources; to preserve the biological diversity of Nepal in order to maintain and improve the
variety and quality of crops and livestock and to maintain the variety of wild species both plant and animal;
and to maintain the essential ecological and life-support systems such as soil regeneration, nutrient
recycling and the protection and cleansing of water and air. The strategies had emphasized the role of
renewable resources including energy in development process.
Sustainable Development Agenda for Nepal (SDAN) (2003): The SDAN provides a national vision for
integrating the environment and development into the national policy- making and planning framework, and
which also identifies environmental conservation as an integral component of poverty alleviation and of
sustainable social and economic growth. The agenda was formulated to guide and influence national level
planning and policies up to 2017. The agenda draws upon and is in conformity with the longer term goals
envisaged in the Ninth and Tenth Plans, Poverty Reduction Strategy Paper, the Millennium Development
Goals, and commitments made by the country in various international instruments including the United
Nations Framework Convention on Climate Change (UNFCCC).
The Three Year Approach Papers for 2010/11 to 2012/13 identified policy priorities on environment and
climate change, with emphasis on environmental management, through a series of decentralised
programmes and collaborations between the GoN and NGOs. It also looked to strengthening institutional
capacity and to internalising environmental management issues in development planning. The Plan had a
target to provide electricity access to rural people by producing an additional 15 MW capacity from microhydro schemes.

14

The Climate Change Policy of 2011 (GoN, 2011) was the most important documents that helped to
institutionalized and provided overall guidance for climate change concerns (mitigation and adaptation).
The policy has been formulated to integrate and mainstream activities in development and poverty
alleviation alongside climate change.
The goal of adopting this policy was to improve livelihoods by mitigating and adapting to the adverse
impacts of climate change, adopting a low-carbon emissions socio-economic development path and
supporting and collaborating in the spirits of country's commitments to national and international
agreements related to climate change. Alongside enactment of this Policy the GoN also intends to
formulate and implement by 2014 a low carbon economic development strategy supporting climate-resilient
socio-economic development. The policy has emphasized to promote renewable energy for adaptation and
mitigation. The policy also highlighted a need to work on technology development to moderate impact of
climate change.
National Adaptation Programme of Action (NAPA 2010): The National Adaptation Programme of Action
(NAPA) was submitted to the UNFCCC in November 2010 once it is approved by the government. It was
designed in consideration of national development goals in which the priorities were in the areas of
agriculture and food security, water resources and energy, forests and biodiversity, public health, urban
settlements and infrastructure, and climate-induced disasters.
The intensive work of the NAPA TWGs along with the vulnerability assessments resulted with a long-list
of adaptation options under each theme. Based on a multi-criteria analysis, most urgent and immediate
climate adaptation actions were identified also considering the national needs. Realizing a strong
convergence between several of the most urgent and immediate priority projects identified by individual
TWGs, nine combined project profiles were priortized. Although the energy issues was important
component of the plan, the potential role that RETs that can play in adaptation and resilience was not
adequately explored during the plan preparation and designing stage. Hence promotion of renewable or
alternative energy however, did not get adequate attention in NAPA.
Local Adaptation Plans of Action (LAPA 2011): Local Adaptation Plans of Action (LAPA) framework
have been approved by the government of Nepal (in Nov 2011) aiming to connect the national perspective
of the NAPA to communities. The main purposes of LAPA are to enable communities to understand the
changing and uncertain future climatic conditions and engage them effectively in the process of
developing adaptation priorities; implement climate-resilient plans that are flexible enough for
responding to changing and uncertain climatic conditions; and inform sectoral programmes and
catalyse integrated approaches between various sectors and sub-sectors. The LAPA has considered the
role of renewable energy both for mitigation and adaptation and the local plans have considered renewable
energy sources as important mechanism for local level climate resilient intervention.
The approach paper of the thirteen plan (2070/71 to 2072/73) has also prioritized climate change
adaptation as one of the important aspect of development. Hence, the paper has emphasized to adopt
15

green development approach to make human activities and development process environment friendly, and
to make them climate adaptive. One of the strategies proposed to achieve this objective was to carry out
climate change adaption while ensuring disaster risk reduction and poverty reduction.
The plan has prioritized energy as an important component for development. Renewable energy has been
as important vehicle for development especially in the rural area where emphasized to a) research and
technology transfer; b) manage resources (internal and external including resources from carbon trade) to
promote RETs; c) promote research and development based on energy efficiency approach. The plan has
proposed to continuous promotion micro-hydro, solar, bio-energy and wind energy, support to local
government instuitions to plan, implement, monitoring and evaluation for effective management of RETs,
promotion of bio-gas, ICS, bio-briquette, promotion of wind energy to lift water in Tarai among others. It is
expected that during the planning period about 15 MW energy will be produced from micro-hydro whereas
6 MW and 1 MW energy will be produced from solar and wind respectively. During this period, about
11,000 additional employments will be created through RETs and RETs related enterprise.
There are other policies and strategies which are related to climate change issues. Some of them the
National Conservation Strategy of 1988, the Master Plan for the Forestry Sector of 1989, the
Environmental Policy and Action Plan (1993), the Agriculture Perspective Plan (1995), the Water
Resources Act (1992), Water Resources Strategy (2002), National Agriculture Policy (2004), the Forest
Sector Policy of 2000, biodiversity strategies (2002). Some of the important policies are briefly described as
below. Although Nepal became party to the UNFCCC in 1994, these plans and strategies have not
categorically paid necessary attention on the issues of climate change.
Climate Resilience Framework (2011): The NPC (March, 2011) has proposed a climate resilience
framework for government adaptation and mitigation planning, within which it has developed a
screening approach for projects. The climate resilient plan a long term planning tools for adaptation
(2011) was developed by NPC with a vision of achieving a society and economy that is resilient to a
changing climate. The framework broadly recognizes various issues of climate change, including its drivers
(energy, transport, land use, forestry, agriculture and waste) and impact vulnerability (ecosystem,
biodiversity, food security, human health), and outlines mitigation and adaptation measures to achieve its
fundamental goal of sustainable development under the felt and anticipated climate scenarios. The
framework also identifies cross-cutting issues (knowledge management, capacity building, gender,
research and development) that are crucial for the effective implementation of climate-resilient development
interventions in order to realize the nations development vision.
As a part of the commitment to UNFCCC to share information with other members, Nepal has submitted
first national communication in 2004 and the second national communication is in the process of
finalization. These communications showed very less per capita GHGs from Nepal and highlighted the
need for adaptation. There are some initiatives on going or in the process of preparation which have some
link with climate change adaptation and renewable energy management. They include REDD plus, national
16

conservation, revision of National Biodiversity Strategies and Low carbon economic development
strategies. The MoSTE is currently engaged in preparing a Technology Need Assessment.
Energy Policies
Nepal, currently have the following sets of documents related to the RET:
Rural energy policy
Rural energy subsidy policy and subsidy delivery mechanism
Renewable energy perspective plan (REPPON) 2000-2020 (Draft)
There is no Renewable Energy (RE) Policy in Nepal. Nepal has only Rural Energy (RE) Policy (2006), that
is just to address the rural need and rural energy demand and thus it is only reason specific. It has no
linkage for addressing renewable energy as a whole for meeting energy demand also of industries and
commercial sector beside domestic application.
The Rural Energy Policy (2006) intends to streamline energy supply to the rural areas through rationale use
of RETs. This document is again a set of general statements without any specific targets, goals and
approaches.
The policy specifically targets the installation of improved biomass technologies to meet cooking and
heating needs, off-grid micro-hydro for rural electrification capable of being grid-connected when the grid is
extended, solar PV home systems (10 Wp and above) and white-LED and photovoltaic-based solar lights
replacing kerosene lamps. The approach is to move away from per-kW subsidy to per-household subsidy.
The program of small solar systems, based on small photovoltaic and white-LED as an immediate and
intermediate solution will be more affordable to the poor. The policy recognizes solar PV home systems as
a mainstream electrification option for many rural areas, where grid connection and micro-hydropower are
not an option for the foreseeable future.
But policies related to energies did not consider climate change adaptation issues despite some obvious
linkages.

5.2.

Review and assess the contribution/role of renewable energy to climate change adaptation

Background
Climate change has multi-dimensional impacts on human society, ecosystems and development and they
can be direct and indirect, short term and long term. Temperature rise and precipitation pattern change and
other climate variability affect both peoples livelihoods and ecosystems. Various studies including NAPA
and SPCR showed that the impacts are mounting over the years, and adaptation to climate change is now
an urgent development need globally. Of the 16 countries listed globally as being at extreme risk from
climate change over the next 30 years, Nepal falls in fourth position based on the Climate Change
17

Vulnerability Index, compiled by a British-based global risks advisory firm, Maplecroft1, with poverty and
adaptive capacity being some of the key determining factors in the ranking2. Due to high level of climate
risk exposure and low adaptive capacity in Nepal necessitate climate change adaptation actions to
moderate climate change impacts.
It is unequivocal that renewable energy contributes to managing climate change. Renewable energy
technologies that do not emit GHGs [greenhouse gases] are an important and viable source for climate
change mitigation. Recent studies also suggested that the renewable energy technologies are better
source for adaptation to climate change and reducing the multi-dimensional aspects of poverty. But, so far
emphasis is given, especially at international level, on the contribution of RETs on mitigations and all
international financing are geared toward mitigation whereas the role RETs for adaptation are consistently
shortchanged.
Adaptation is a priority for developing countries and the role of RETs on adaptation and poverty alleviation
has been recognized. The Eighth Conference of the Parties (COP-8) to the United Nations Framework
Convention on Climate Change (UNFCCC) in New Delhi in November 2002 provides a useful starting point
for examining the critical role RETs that can play in addressing poverty alleviation and sustainable
development aspirations of developing countries.
The contribution of RETs on global development agenda, i.e. MDGs, is also being examined. For example,
the International Energy Agency (IEA) described energy as the essential ingredient of all three pillars of
sustainable development: economic, social and environmental and it is key to the realisation of the MDGs
(IEA: 2008, 6) where as a United Nations report argued that access to energy services, especially for the
poorest communities, is essential to achieve all of the MDGs and should be integrated into all national
poverty reduction strategies (UN: 2005).
In Nepal, the relations between RETs and adaptation have not been studied properly, there are, however,
some studies carried to document impacts of RETs on various aspects of peoples livelihoods and poverty
which are directly or indirectly connected with the attributes of adaptation, adaptive capacity and
development. Hence, this study aims to explore linkages and document contribution of RETs on adaptation
and poverty reduction in Nepal. It is expected that the finding will provide an agreeable framework to study
further and furnish broader understanding on how RETs can be an instrumental option to design and
implement effective adaptation measures in Nepal.

http://www.maplecroft.com/about/news/ccvi.html/
The Climate Change Vulnerability Index evaluates 42 social, economic and environmental factors to assess national
vulnerabilities across three core areas. These include: exposure to climate-related natural disasters and sea-level rise; human
sensitivity, in terms of population patterns, development, natural resources, agricultural dependency and conflicts; thirdly, the
index assesses future vulnerability by considering the adaptive capacity of a countrys government and infrastructure to combat
climate change. According to Maplecroft, the countries with the most risk are characterised by high levels of poverty, dense
populations, exposure to climate-related events; and their reliance on flood and drought prone agricultural land.
2

18

5.3.

Major findings from the literature

Conceptualizing the relations

Assessing contribution of RETs on climate change adaptation and sustainable development are in evolving
stage in Nepal so it is important to understand the conceptual basis of adaptation, sustainable development
and renewable energy. A brief conceptual analysis is presented below.
Adaptation
Adaptation is a term that is understood differently by different practitioners. Adaptation in the context of
human dimensions of climate change can be defined as a process, action or outcome in a system
(household, community group, sector, region or country) in order for the system to better cope with,
manage or adjust to some changing conditions, stress, hazard, risk or opportunity (Smith & Wandel 2006).
The IPCC definition of adaptation elaborates further: adaptation describes the adjustment in natural or
human systems in response to actual or expected climatic stimuli or their effects, which moderates harm or
exploits beneficial opportunities (IPCC, 2007).
McGray et. al. (2007) has identified a continuum of ways in which climate adaptation has been addressed
by different actors. They placed all adaptation measures on a continuum where the impact- and
vulnerability approach represent the two extremes. On the one side of the continuum, the most
vulnerability-oriented adaptation efforts overlap almost completely with traditional development practice,
where activities take little or no account of specific impacts associated with climate change. On the other
side, highly specialized activities exclusively target distinct climate change impacts, and fall outside the
realm of development. In between lies a broad spectrum of activities with gradations of emphasis on
vulnerability and impacts. The continuum can be roughly divided into four types of adaptation efforts and
they include:
Table 5.1: Continuum of adaptation (vulnerability to impact approach)
Continuum
Examples

Addressing drivers of
vulnerability
activities that increase
human development and
address
drivers
of
vulnerability, e.g.
diversification
of
livelihoods

Building response capacity

Managing climate risk

activities that aim at building

response capacities through
capacity building (knowledge
and skill), integration in
planning
e.g.
adaptive
management, monitoring and
DRR

activities that reduce

climate risks in affected
sectors,
e.g.
reforestation and other
measures related to
natural
resource
management

Confronting
climate
change
activities that confront
climate change by
addressing concrete
impacts, e.g. reducing
the risks from GLOF
from Tsho Rolpa lake

Climate risk: Climate risk has been defined as any added risk to current ways of securing well-being
resulting from climate change (Eriksen & OBrien 2007). Climate risk is related to the direct physical
impact of climate variability and change on individuals and communities, through the exposure to stress
19

and crisis as a result of climatic challenges, as storms and drought. Other examples are changes in rainfall,
increased tropical cyclone activity and instability of winds.
Vulnerability: The second dimension of climate adaptation is vulnerability reduction. Vulnerability can be
defined as the social and ecological contextual conditions that result in inability to cope or secure wellbeing in the face of climate variability and change (Eriksen et al. 2007). Vulnerability can be generated by
several processes and factors, such as social relations of resource access, political and economic
marginalization, loss of employment opportunities, and weakening social networks (Eriksen et al. 2007).
The consequences of climatic challenges are influenced by the vulnerability of the people affected and the
vulnerability context is closely related to environmental, social and economic possesses. Examples of
processes or factors leading to vulnerability to climatic challenges can be lack of alternative incomegenerating activities, poor health facilities and lack of sufficient infrastructure.
Adaptive Capacity
The third dimension of adaptation included in this framework is increased adaptive capacity. It generally
refers to the degree to which individuals or groups can adapt to risk at any given time. It is considered that
one way to enhance adaptation is by building adaptive capacity. According to IPCC, adaptive capacity is
the ability of a social-ecological system to be robust of the disturbance faced by the systems and the ability
of a system to adjust to climate change (including climate variability and extremes) to moderate potential
damages, to take advantage of opportunities, or to cope with the consequences (IPCC, 2007). Adaptive
capacity is related to resources that people both have within themselves such as skills and knowledge and
resources they have access to, including peoples access to resources, power, information, education,
technology, social networks and insurance.
Adaptive capacity is shaped by multiple factors. Determinants for adaptive capacity are also categorized
based on their nature of origin. They are generally categorized as asset based and process/functions
based (WRI, 2009). The assets based includes different kinds of assets that people or community may
have such as physical, financial, human, natural and social (related to substantive sustainability) where as
functions based include different processes such as planning process, learning and governance
(procedural sustainability).
According to OECD (20093), adaptation can mean one or a number of the following (table 2) based on their
strategy/purpose of adaptation:

OECD Organisation for Economic Co-operation and Development 2009: Integrating Climate Change Adaption
into Development Co-operation.

20

Table 5.2: Adaptation based on purpose

Strategy
Example
Share losses
Support from extended family, insurance, or social programmes
Modify threat
Change in the management of dykes and dams to modify flood patterns
Prevent impacts
Redistribution of water to avoid scarcity
Change use
Change crops or soil management
Change location
Relocation of settlements or economic activities
Research
Improve seed research
Change behaviour and rules Rainwater harvesting; conservation
(Source: OECD 2009)

Sustainable development
The concept of sustainable
development, which first entered
(in 1987) into political debates
after the World Commission on
Environment and Development
(WCED) had released a report
on Our Common Future. The
Commission
defined
Sustainable Development as
development that meets the
needs of the present without
compromising the ability of future
generations to meet their own
needs.

Figure 5.1: Sustainability dimensions and their interrelationships

A plethora of literature is
available
on
sustainable
Source: Munshinge & Shearer (1995)
development. Munshinge &
Shearer (1995) proposed a
simplified figure to understand the sustainable development (Figure 5.1). The figure showed main
dimensions of sustainability and their interrelationships.

21

Sustainable development and adaptation

Sustainable development and climate change are closely linked with each other. The adverse impacts of
climate change are among the contributory factors why sustainable development efforts of the developing
countries are not successful as expected. This challenge, however, can be addressed if climate change
adaptation strategies are mainstreamed in sustainable development plans of the country (Huq et al., 2003).
Following the release of the IPCCs Fourth Assessment Report, it has become increasingly apparent that
climate change will have far reaching consequences for poverty reduction efforts including the achievement
of the Millennium Development Goals (MDGs).
There are two distinct perspectives on how to approach adaptation in developing countries: one focuses on
responding to specific predicted climate impacts and managing risk (for detail see Schipper, 20074 and
McGray et al. (2007)). The other is more concerned with reducing vulnerability and building resilience and
adaptive capacity. Between these two extremes is a continuum of interventions from pure adaptation
measures on the one hand to pure development activities on the other. In practice, most interventions fall
somewhere between these two extremes. It is increasingly recognised however that successful adaptation
will require interventions which address the range of challenges along the whole spectrum i.e. all three
dimensions of sustainable development to be effective and moderate the impact of climate change both in
short and long term5.
Renewable energy and its role in development /adaptation
The literature provides several definitions of RE. Twidell and Weir (20066) define RE as energy obtained
from the continuing or repetitive currents of energy occurring in the natural environment. The Dictionary of
Energy edited by Cleveland and Morris (20067) says renewable energy is any energy source that is
naturally regenerated over a short time scale and either derived directly from solar energy (solar thermal,
photochemical, and photoelectric), indirectly from the sun (wind, and photosynthetic energy stored in
biomass), or from other natural energy ows (geothermal, tidal, wave, and current energy).
The most important RETs in the context of Nepal are related to micro hydropower, biomass energy (biogas,
briquettes, improved cook stoves), solar energy (solar water heaters, dryers, cookers, generators and
pumps), wind energy (wind turbines, windmills). These RETs have a large potential to contribute to the
sustainable development (SD) of specific territories by providing them with a wide variety of socioeconomic
and environmental benefits (Rio and Burguillo, 2008). The IPCC (2012) revealed that RETs offer the
opportunity to contribute to a number of important SD goals: (1) social and economic development; (2)
energy access; (3) energy security; (4) climate change mitigation and the reduction of environmental and
4

Climate Change Adaptation and Development: Exploring the Linkages Tyndall Centre for Climate Change Research Working
Paper 107
5
http://www.gsdrc.org/go/topic-guides/climate-change-adaptation/understanding-climate-change-adaptation-as-adevelopment-issue#development
6
Twidell, J., Weir, T., 2006. In: Renewable Energy Resources. Taylor & Francis 601pp.
7
Cleveland, C.J., Morris, C. (Eds.), 2006. Dictionary of Energy. Elsevier 502pp.

22

health impacts. According to Rio and Burguillo (2008), RETs can be a good approach for contributing local
sustainability. RETs can contribute to reduction of local and global pollutions (GHGs emissions), increasing
employment, improving asset base (i.e. social/cultural and human) at household level, improving quality of
life, increase household income and reducing vulnerability, among others.
Based on the analysis, RETs have following characteristics which are becoming an inevitable for
adaptation and sustainable development. They include:
1. They produce less or no GHGs.
2. Most of the RE technologies can be deployed at the point of use (decentralized) in rural and urban
environments. These technologies serve the local needs especially the need of women and
vulnerable groups.
3. Most of RETs are technically mature, proven and manageable. Deployment of RETs has been
increasing rapidly.
4. RETs benefits are helpful to reduce households and community vulnerability.
5. RETs benefits are effective tools that is very likely to contribute to enhance adaptive capacity of
people
6. RETs can be directly used for adaptation activities
7. RE technologies, in particular non-combustion based options, can offer benefi ts with respect to air
pollution and related health concerns
Conceptual framework role of RETs for climate change adaptation and development
Three theoretical directions (i.e. climate change, sustainable development and renewable energy) have
been used to constitute the conceptual framework, since they are found to be complimentary so that they
can work together as tools for analyzing different aspects the role of RETs on adaptation (Figure 5.2).

Source: authors analysis (adapted from many sources)

Figure 5.2: A heuristic model of relations of RETs, adaptation and development

23

Sources: authors own elaboration based on different sources

Figure 5.3: Conceptual framework of nexus of RETs, adaptation and development
For instance, RE provides energy for water pumping and post-harvest processing, which in turn provides
new water resource management options and livelihood opportunities. Better lighting expands educational
opportunities, improved health condition of human being, reduced exposure to indoor air pollution, reduced
the drudgery of women and enhance livelihood options. Collectively these interactions contribute to poverty
reduction and increased adaptive capacity for climate change. Adaptive capacity also reflects the resilience
of communities to variability, and change (including but not limited to climate change) and is a function of
environmental, social and financial assets and the ongoing capability to transform these assets into human
well-being (Figure 5.3).

5.4.

Role/contribution of RETs in adaptation and development Examples/cases

RETs support to adaptation climate change and sustainable development. Literatures reviewed during the
study provide following examples.
Impact on Environmental services
The exact type and intensity of environmental impacts varies depending on the specific technology used,
the geographic location, and a number of other factors. By understanding the current and potential
24

environmental issues associated with each renewable energy source, RETs can effectively avoid or
minimize these impacts of reducing pollutions (GHGs and others) and provide other environmental benefits
such as reducing indoor air pollution and toxic materials. The sun, for example, provides a tremendous
resource for generating clean and sustainable energy sources (which can be used for electricity, cooking,
water and space heating) and soalr based technologies produce no GHGs and other toxic materials. Use of
solar energy for cooking will help to manage the bio-resources sustainably.
Some of the specific examples are documented by IISD (2004).

REs contribute to the management of biodiversity and ecosystems by lessening pressure on

natural forests in several important ways. For example: REs improve agricultural productivity by
providing energy for irrigation pumping and postharvest processing. These productivity
improvements can in turn reduce pressure to convert forest to agricultural land otherwise required
to maintain or increase productivity.

REs such as renewably-generated electricity for household lighting or the introduction of improved
cook-stoves/bio-gas to make more efficient use of traditional biomass all limit the exposure to the
air pollution and toxic products of traditional biomass combustion. In the rural areas, traditional
biomass provides almost all primary energy demands, the largest use of which is for cooking.
Despite the widespread perception that the worst air pollution occurs outdoors in urban areas, the
most severe chronic exposure to airborne pollutants occurs among rural women and children from
indoor sources due to biomass combustion in primitive, inefficient stoves.

REs reduce and mitigate climate variability and change. REs do not emit greenhouse gases, or in
the case of sustainably harvested bioenergy is carbon-neutral; the next generation of biomass
sequesters CO2 equivalent to that released on combustionbut still permanently displaces
competing fossil fuels.

The carried out by UNDP (2008) and AEPC (2009) also suggested that RETs are contributing to
environmental services. An evaluation study carried out by Khanal (2012), for example, in Ladakha India
showed a positive contribution on environment. The project also played an important role in conserving
environmental/natural capital. The reduction of biomass consumption, both for cooking and heating, has
had a positive impact on the environment as it reduced carbon dioxide emission. The project report
revealed that about 1.37 MT of biomass was saved by one household each year. In addition, the project
also helped to reduce carbon dioxide emission. The record showed one household helped to sink 2.16 MT
of CO2 per year.

25

Impact on socio-economic development

A UN organization report on Energy for Sustainable Future (2010) argued that clean, efficient, affordable
and reliable energy services are indispensable for global prosperity. Developing countries in particular need
to expand access to reliable and modern energy services if they are to reduce poverty and improve the
health of their citizens, while at the same time increasing productivity, enhancing competitiveness and
promoting economic growth. Another report published by UNDP and the World Bank (Modi et al., 2005)
also argued that Energy services are essential to both social and economic development and that much
wider and greater access to energy services is critical in achieving all of the Millennium Development
Goals.
Recent studies showed positive impacts on various socio-economic aspects that are necessary to
improvement of peoples livelihoods. Following cases showed positive contribution of RETs on income
generation, health, hygiene, education, soil water conservation, environment, gender, human capital,
social capital, local employment, endogenous technology, social/community work, food security and energy
security (see following case studies). These services helped to reduce the vulnerability, enhance adaptive
capacity, improve livelihoods, and enhance ecosystems health and resilience.
Case no. 1: Reddy et al. (2006) analysed the impact of small hydro on the local sustainability of regions in
the North of India and identified the impact of RES on the different components of local capital which make
up their sustainability framework: financial, natural, social, physical and human. Among the socioeconomic
benefits resulting from the deployment of RES, they find the reduction of migratory flows from rural to urban
areas, the creation of local employment opportunities (by improving access to electricity) and local capacity
building. However, there are positive but modest impacts on local income.
Case no 2: A case study (DA, n.d.8) conducted by Development alternatives in Uttar Pradesh, Rajasthan
and Bihar in India related to Impacts of RET/Solar power innovation model showed various positive impacts
in education and skill development, gender concerns, renewable energy based enterprises. The result
showed that a flour mill of 3 horsepower was operating from electricity generated from the solar power plant
which helped to improved health and sanitation in the village contributing to enhancing the livelihoods of
participating communities. Environmental benefits are also very much evident. The power generated from
the biogas plant is used to provide energy services to supply drinking water, irrigation and running of microenterprises like milk chilling plant, flour mill, oil expeller and spice grinding which were otherwise operated
by diesel/coal.
Case no 3: The case study in Bhumlichok, VDC Gorkha Nepal by Shrestha (2012) showed that improved
access to clean and renewable sources of lighting and cooking energy have positive health impacts on
communities and reduced expenditure on fossil fuels. It is found that on average, a project participant
8

Development Alternative (n.d.) MITIGATION AND ADAPTATION INFORMATION NETWORK FOR SUSTAINABLE COMMUNITIES
DECENTRALIZED RENEWABLE ENERGY IN INDIA, A Compendium of Case Studies (available at
http://www.grida.no/files/activities/greeneconomy/case-studies-da-india.pdf)

26

household annually saves 44 liters of kerosene for the household lighting, which means annually the
household members, especially mothers and children are less exposed to carbon dioxide emission by 110
kg CO2, as compared to the non-participant households. In terms of money, annually a project participant
household saves an average amount of NPR 4,111 (40 Euro) by reducing the consumption of 44 liters of
kerosene, 187 numbers of wax candle and 16 numbers of dry cell batteries. The survey results indicated
that the majority of project participant households use improved cooking stoves (71%). It has provided
access to gravity goods ropeways for the same purpose. That means, improved access to renewable
energy technologies helped the project participant households to reduce labor burden and increase the
availability of free time to engage in household and agricultural activities.
Case 4: Case studies from East Africa (Kenya) and other parts of Sub-Saharan Africa (Niger, Zambia and
Zimbabwe) (AFREPREN, 2011) showed that, by using animate energy-driven treadle pumps instead of
bucket irrigation, farmers can increase irrigated land, reduce work time, improve crop quality, grow new
crops and increase the number of cropping cycles. Treadle pump technology has enabled poor rural
farmers, especially women, to increase their incomes by selling surplus produce in the local market. As
treadle pumps usually reach water only within seven meters, they do not deplete valuable groundwater
resources. If pumps are produced locally, they can also create jobs and income.
Case 5: Micro-hydro Energy to fight poverty: In Pinthali, Mangaltar VDC, Kavre an improved water mill used
for milling grain also produces up to 12 KW of electricity for lighting 120 households. The scheme is run by
a cooperative, which collects a fee from each household and invests its profits in education, agriculture and
to promote small businesses, such as poultry farming. Women literacy was also possible due to availability
of electricity during the night time.
Case 6: Solar Energy (in Humla, Nepal): Solar greenhouses for community or family use offer a real
prospect for improved food security and nutrition. The intervention has also helped to improve family
income. The overall outcome of introducing solar greenhouses into the isolated villages of Humla, found
that food security and quality of life of the participating people were enhanced (Fuller and Zahnd, 2012).
Case 7: Passive Solar energy project in Ladakh, India: An evaluation of passive solar energy project in
Ladakh India (Khanal, 2012) showed that solar technologies helped to improve the quality of life of people,
increase energy access and reduce the vulnerability of communities especially women group. The main
outcome was improving room temperature in winter. The average minimum indoor temperature in a
(passive) solar house was reached to 5C when temperature outside the house was -15C so creating a 20
C temperature difference. Household fuel consumption was reduced on average by 50%. The fuel
collection time was reduced by half and some villagers used - saved time for productive activities such as
daily wage labor or social networking. The health risks related to cold and indoor air pollution were found to
be reduced significantly. Diseases like arthritis and cough, for example, were reported to be less prevalent
and number of visits to doctors and/or Amchi was reduced after the introduction of the solar technology.
Women, who spent most of their time within the house, were mostly benefitted. The solar technology
27

intervention helped to reduce buying traditional fuels (timber, LPG gas) and saving about 50 Euros annually
per household.
Table 5.3: Benefits of rural electrification to MH connected households
Outcome variable

Economic
Non-farm income
(Rs/capita/month)
Expenditure
(Rs/capita/month)
Education
Schooling
years
completed
Girls
completed
schooling years
Evening
study
(mins /day)
Boys time spent in
evening
study
(mins/day)
Girlss time spent in
evening
study
(mins/day)
Health
Adult
womens
respiratory
problems
Boys respiratory
problems
Girls respiratory
problem
Girls
gastroinstestinal
(GI) problems

MH-Connected
HHs

Nno-MH HHs

Difference

Propensity
Matched
Difference

865.2

629.2

1456.2

1263.1

0.353
(2.53)**
0.039 (1.92)*

0.112
(1.91)*
0.090 (3.26)**

4.28

3.73

0.551
(1.97)*

0.240
(1.65)**

50.1

33.9

16.2 (3.63)**

7.7 (2.32)**

39.7

30.0

9.7 (2.19)**

12.0 (5.06)**

5.1

9.7

-4.62
(2.19)*

-3.4 (-3.22)*

1.4

5.1

- 3.63 (-1.75)*

- 1.6 (-2.28)**

1.3

8.2

-6.90 (-1.93)*

-6.1 (-2.82)**

0.3

1.7

- 1.40 (-0.87)

- 1.43 (-1.71)

28

Score

Outcome variable

MH-Connected
HHs

Womens fertility and empowerment

Contraceptive
0.744
prevalence rate
Time-use in
5.81
Income generating
activities
(hours/day)
Study
time 0.96
(hours/day)
Independence in 0.569
mobility
Type 1
Independence in 0.844
decision making in
fertility issues
Independence in 0.942
decision making in
childrens issues

Nno-MH HHs

Difference

Propensity
Matched
Difference

Score

0.718

0.026 (0.59)

0.038 (2.78)**

5.54

0.27 (1.99)**

0.19 (1.97)*

0.79

0.17 (1.13)

0.20 (1.86)

0.354

0.215 (4.12)**

-0.013 (- 0.36)

0.726

0.117 (2.44)**

0.042 (1.85)*

0.921

0.021 (0.70)

0.027 (2.40)**

Table 5.4: impacts of RETs on Poverty Reduction Indicators

Poverty
Reduction PRI in Household PRI in Industrical PRI
in PRI in Social
Indicators (PRI)
sector
Sector
Commerical
Sector
Sector
Security
(income MH, Solar, BT, MH Solar, BT
MH Solar, BT
MH, Solar, BT,
emplyment credit)
ICS,
ICS
Knowledge
and MH, Solar
MH, Solar, BT,
information
ICS
Health
MH, Solar, BT,
MH, Solar
ICS
Drudgery reduction
MH, BT,
MH
Empowerment/inclusion MH, BT, ICS
MH, ICS
Gender equity
MH
MH, Solar, ICS
Access to services
MH
Environmental
BT, ICS
sustainability
Source: Nepal (2005)
29

Case 8: Power and People the World Bank study in Nepal: A study on micro-hydro by the World Bank
(20119) carried out reported that households having MH have got a wide range of benefits and they include
economic, education, health and womens empowerment. MH access increased households non-farm
income by 11 percent and consumption expenditure by about 6 percent. Girls completed schooling years to
up to 0.24 grades because of MH connectivity. Women and children from the MH households suffer less
from respiratory problems than their counterparts from non-MH households. Womens contraceptive
prevalence, involvement in income generating activities, and decision-making independence all go up
because of the MH connectivity. The table 5.3 below provides impact of micro-hydro on peoples socioeconomic aspects.
Case no 9: Role of RETs on Poverty Reduction: A study carried out by Nepal (200510) also showed a link of
RETs with poverty reduction in Nepal. He reviewed the contribution of selected RETs against poverty
reduction indicators. A brief sysnopsis of RETS i.e. micro hydro (MH), Solar power (solar), Biogas
technology (BT), and improved cook stove (ICS) (Table 2.4).
Case 10: Impact of Solar PV Home System: The impact study carried oub by AEPC (201011) with the
support from Samuhik Aviyan estimates of solar house systems (SHS) on access to information, it is
evident that SHS has had an important role in increasing access to information for rural households where
there is no regular supply of electricity. This helps in the empowerment of the rural people. Education is
another sector where SHS has had significant impact. Students with Solar PV Home System are 15
minutes more likely to study every day than without SHS, with the magnitude of the impact different for
male and female students. This figure justifies the 2 more percentage secured by students in their exams.
Findings show that with Solar PV Home System, passing rate increases and school dropout rate
decreases. Impact on farm income and income through own business is estimated separately. SHS is likely
to increase the probability of initiating own business by 3 percent.

Banerjee, S. G., Singh, A., and Samad, H (2011). Power and People The Benefits of Renewable Energy in Nepal.
The world Bank. Kathmandu (http://www-wds.worldbank.org/)
10
11

Study on Analysis of Rural Energy Programms with Respect to Their Linkages with Poverty Reduction, 2005
Socio Economic Impact Study of the User of Solar Home System

30

Sources: mainly authors interpretation

Figure 5.4: Impacts/role of RETs on economic, social and environmental aspects
Case 11: Impact on Gender: Mahat (2004) and Mahat (2006) analysed the role / impact of the RETs on
gender issues. The studies showed a positive implication of the Micro Hydro Plant (MPH) for the
households in terms of saving womens labor and time. There was a good family atmosphere in many
households because of the positive attitudes of men and women towards womens mobility, empowerment
and development. She also reported, biogas plants have more positive implications such as a reduction in
womens work load in collecting firewood and cleaning up the house after getting a biogas plant.
Case 12: Impact on Inclusion: RETs is a small form of investment and technologies attract or provide
enabling environment for income and employment generation of less-favoured (poor) individuals. So, by
default decentralized RETs favors poor people. This help to reduce the income differentials which has a
positive impact on local sustainability. Therefore, it is desirable that the project leads to income and
employment generation of less-favoured individuals.
The case studies showed that RETs can provide various benefits or impact on human and ecosystems. An
example of solar based irrigation and food processing through RETs is depicted in the following Figure 5.4.

31

Impact of RETs on MDGs

The provision of renewable energy services is described by the International Energy Agency (IEA) as being
the essential ingredient of all three pillars of sustainable development: economic, social and environmental,
it is key to the realisation of the MDGs (IEA: 2008, 6) while a United Nations report argues that access to
energy services, especially for the poorest communities, is essential to achieve all of the MDGs and should
be integrated into all national poverty reduction strategies (UN:2005, 2). The IEA (2008) estimates that
modern energy services will need to be provided to an additional 700 million people worldwide in order to
meet the Millennium Development Goals for poverty reduction in 2015.

Table 5.5: Likely impacts of scaling up the REDP MHS project in Nepal
Area
Poverty

MDG
1

Education

Gender
Health

3
4, 5 & 6

Environment

Global
8
Partnership
Source: GoN/UNDP (2011)

Likely impacts
About 1.2 million households in rural and remote areas could earn an
additional $0.33/day
The chance of children entering secondary school increases more than
fourfold
The chance of girls entering secondary school increases more than sevenfold
Enhances household sanitation and increases number of health staff available
in health centres who can provide more and better quality health services to
the population
Reduced pollution due to 80 per cent reduction in kerosene consumption and
85 per cent reduction in use of dry-cell batteries
Increases access to information and communications technologies that can
facilitate development of partnerships and dialogue

Nepal is making notable progress on the Millennium Development Goals (MDGs), yet disparities between
social and economic groups and regions remain significant. It has been difficult to reach the poor and those
living in remote and inaccessible areas, where delivering services is especially difficult. GoN has accorded
importance. Energy as one of the driving factors for development, Nepal has promoted using decentralized
off-grid RETs (micro hydro, solar) to expand access to modern energy services, in particular electricity. A
study carried out by GoN/UNDP (2011) Nepal illustrated positive development benefits of rural
electrification through micro-hydropower in improving the quality of life of people in rural and remote areas
of Nepal. Such benefits of access to electricity have made a profound contribution to multiple aspects of
human development, from poverty to health, education, gender equality, access to information and
communication and environmental sustainability. GoN/UNDP (2011) studies showed the following benefits,
beside others, of micro- which can be lined with MDGs (Table 5.5)

32

Based on impact of RETs on socio-economic aspects and review of literature on MDGs, following impact
relations can be established (Figure 5.5).

Source: authors own analysis

Figure 5.5: Potential impact of RETs on Millennium Development Goals
Role/contribution of RETs on adaptation process
From the analysis of the literature, it is evident that RETs and its services can serve as the foundation for
adaptation. Based on the GcGray et al. (2007) framework and dimensions for sustainable development, the
role of RETs in adaptation can be mapped as below (Figure 5.6). The figure shows contributions of RETs
for various categories of adaptation options, as suggested GcGray et al (2007), and dimension of
sustainable development. It is noticed that the RETs contribute more on the issues related peoples
vulnerability and building adaptive capacity (vulnerability focus) than actually addressing the impact of
climate change (impact focus). So, RETs are useful options to improve adaptive of people in order to
enhance climate compatible development by providing social and economic benefits of targeted
communities.

33

Source: authors analysis

Figure 5.6: A heuristic mapping of the role of selected RETs for adaptation to climate change

34

5.5.

Barriers for integration of RETs and adaptation

Development initiatives at national and international level have been considering the opportunities of
integrating renewable energy systems in adaptation to climate change. Nepal NAPA and the thirteen
development plan has recognized role of renewable energy in adaptation to climate change. The literature
review, however, showed some challenges and barriers while integrating RETs for adaption to climate
change.
According to Verbruggen et. al. (2009), organizing the energy transition from non-sustainable to renewable
energy is often described as the major challenge of the first half of the 21st century. Technological
innovation, the economy (costs) and policies have to be aligned to achieve full renewable energy
potentials, and barriers impeding that growth need to be removed. Similarly, Nepal (2005) also identified
technical, financial and policy issues to promote RETs for adaptation and sustainable development. There
are some technology specific barriers and challenges which also affected easy promotion and scaling up of
RETs. The major barriers can be grouped as below.
Perspective and existing development paradigm:
Although renewable energy is recognized as a critical input to development (TTP, 2013, MoE, 2011), the
traditional development paradigm has dominated on development plans and programmes to support
economic growth. Nepal also followed the development model of developed countries which has been
fossil fuel based. Although there have been some changes in thinking of integrating new, clean and efficient
technologies, existing structure, institution and mindset are basic barriers to go ahead for integrating
renewable energy in development process.
Weak awareness/ knowledge
The nexus of RETs and adaptation to climate change is in nascent stage. There are some studies to show
the linkages but there is still a huge knowledge gap to substantiate the potential contributions to sustainable
development. Policy makers do not have sufficient information resulting an inadequate priority in national
level energy planning and management process. The literature review also revealed that there has been a
lot of support available on RETs and mitigation research and less priority has been given on RETs,
adaptation and development.
Policies and harmonization
Although the responsibility of managing renewable energy in Nepal rests on a specific ministry, there are
many other sector which are directly and indirectly involved in promotion, use and management of
renewable energy technologies and services. Sectoral policies have often different goals in using energy so
it has been difficult to get consistence renewable energy interventions across the sector. There has been
very weak collaboration and coordination with other sectoral ministries such as agriculture, irrigation,
35

energy and local development. Climate change Policy (2011) has emphasized a need for a renewable
energy but the policy is still to be integrated in other sectoral policies. The recent thirteenth plan (2070/71 to
2072/73) has also emphasized energy as the main building block of the development but, from the past
experience, implementation would be questionable.
These policy and practiced challenges are also resonated by other renewable programmes. For example,
SREP (2011) (with the support from CIF) has identified legal, policy, regulatory, and institutional barriers.
Similarly, a study carried out by Solar Energy Foundation (2011) also identified various policy gaps
including a lack of Renewable Energy Act or similar legal framework to promote RETs. There is no clear
policy guidelines, frameworks, methods and tools to integrate RETs in climate change adaptation planning
and management. Neither there are viable strateg that consider emerging market regime, investment (both
on research and enhancing capacities of stakeholders) and introduction of low- GHG emitting technologies.
Cost of technology and technology innovation
Technological innovation in renewable energy is a pre-requisite to transform a high fossil fuel based
development path to clean and renewable energy based development path. Major technological advances
are needed for conditions such as making renewable energy technologies cost competitive. The biggest
challenge to promote RETs is upfront establishment cost. There are also other types of cost for the
promotion of RETs. They include increased transaction of due to decentralized mechanisms, remoteness
and dispersed settlements. Other cost may also include potential damages to the economy and other social
costs i.e. loss of jobs and livelihoods. According to ESCAP Asia (2010), there is some degree of uncertainty
around the costs associated with the wider deployment of RE technologies. The risk of deployment with RE
technologies entails longer payback periods, fluctuation or risk in carbon price and the future direction of
the carbon market.
Finance and innovative financial mechanisms
Another important barrier is considered as financing especially accessing and allocating sufficient financing.
To promote new and innovative approaches/technologies, up front support is prerequisite. In Nepal, most of
the people who need immediate supports and where RETs can be promoted are in remote areas and with
weak financial condition. For to support this initiative, a combination of financial support mechanisms and
finance is needed. There has been a public-private partnership (PPP) model practiced by AEPC to bring
private sector, NGOs, local government institutions, micro-finance institutions and end user together. But,
this mechanism is constrained by large scale financing, higher transaction cost and weak risk sharing
mechanism (insurance). Besides these, local government institutions (DDC, Municipality and VDC) were
not able to discharge their oversight role and appropriate monitoring, evaluation and learning mechanisms
have to be fully developed.

36

5.6.

Way forward

Addressing climate change impacts is one of the most important challenges of the twenty-first century.
There is no liberty of inaction. Studies, including Stern (2006) suggest that the cost of inaction is even
costlier. As energy being a major source of GHG, the costs of inaction on reducing the consumption of
fossil fuels would be many times the costs of action (ESCAP, 2010). Similarly, reducing the consumption of
fossil fuels, the main source of climate change, and increasing RETs are better and win-win strategies that
help to reduce global development cost in longer run.
Literature review showed that RETs, in addition to reducing the GHGs emission, would positively contribute
to socio-economic and environmental aspects that are central to improving the livelihoods of people and
ensuring the sustainable development. The analysis showed that RETs contribute to adaptation processes
by contributing on reducing drivers of vulnerability of people (for example increasing energy security and
access, improving maternal health) , improving adaptive capacity (for example contribution on education
and employment) and addressing climate change risk (example improving family income and improving soil
fertility, soil and water conservation). It is generally agreed that RETs can address many climate change as
well development challenges and can provide the adaptation and development benefits. Hence, it is
important to make a clear road map to address climate change while supporting in attaining sustainable
development and green growth through appropriate adoption of RETs in adaptation and development. But,
these are not without challenges. It is important to proactively engage on improving policy framework, work
on reducing cost of technology, providing financing opportunities (for service providers and end users) and
create robust regulatory framework for monitoring and learning.
The following recommendations are made based on their practical relevancy.
Policy improvement/strategies:
It is important to review the existing opportunities and constraints that exist among climate change policies
(2011), the thirteen development plan (2013), Rural Energy Policy, RE subsidy policy and other relevant
policies. The learning can be integrated in existing strategies being formulated by the government of Nepal
i.e. LCEDS, Nepal Biodiversity Strategy, Forest strategy, REDD+ strategies and National Conservation
Strategies. The learning from this study could be directly used in integrating in LCEDS process and
developing a national framework on climate compatible development.
Besides, incentive mechanisms for promotion of RETs are important. AEPC is currently employing a Public
Private Partnership (PPP) model in RE. Based on the assessment and learning from thi,s model
appropriate incentive mechanism for private, micro finance institutions and other stakeholders can be
devised. A risk sharing mechanism for major investment would be required.

37

Creating knowledge, learning and sharing

Managing knowledge on climate and development is very important. The nexus between RETs and climate
change adaptation is at primitive stage. Nepal has received a good amount of adaptation fund from various
development partners and some of them are being piloted in Nepal to showcase around the world. In
addition, there are so many projects and programme working on RETs and climate change. So, it is very
relevant and strategic to assess the nexus between RETs and adaptation and how the learning can be
used to improve policies and practice both at national and international level.
A national level result based monitoring and evaluation framework is required that helped to systematically
document good and failure cases, and review the performance of the initiative. Learn from these cases are
instrumental for future improvement.
Financial incentives and access to finance
There are some arguments on reducing subsidy, but due to the nature of interventions (remote areas with
weak adaptive capacity) and a big push is needed to ensure financial incentive unless their benefits are
well known. This needs good processes for managing incentives in order to use the resources for the right
reasons. The incentive mechanisms should follow, beside others, the real need of the people and should
follow performance based approach. Existing MFIs performance may need to enhance and new financial
opportunities need to be introduced to serve the target and purpose of RETs promotion.
Institutional capability and capacity development
Integrating RETs on adaptation and development process is new area of work for many organizations, and
their existing capacity is not sufficient. Hence, proper capacity building is needed for stakeholders. A
capacity need assessment (CAN) is required that helped to develop capacity across a variety of public and
private sector stakeholders, including policy makers, regulators and enforcement officials, utilities, and
implementers.

6.

Mitigation Analysis

6.1.

Relationship between Renewable Energy and Climate Change Mitigation

Though climate change is one of the great challenges of the 21st century, its most severe impacts may still
be avoided if efforts are made to transform current energy systems (IPCC, 2012). Renewable energy
sources have a large potential to displace emissions of greenhouse gases from the combustion of fossil
fuels and thereby to mitigate climate change. If implemented properly, renewable energy sources can
contribute to social and economic development, to energy access, to a secure and sustainable energy
supply, and to a reduction of negative impacts of energy provision on the environment and human health
(IPCC, 2012).
38

In case of Nepal renewable energy technologies like biogas, solar, pico/micro/mini hydro, improved cooking
stoves, improved water mills have been contributing in reducing emission and also have good potentiality of
carbon mitigation in future as well (Chaulagain and Laudari, 2010). The biogas replaces firewood for
cooking hence avoids deforestation and also produces organic fertilizer as its byproduct. The improved
cooking stoves (ICSs) lead to reduced GHG emission, mainly CO2 by replacement of non renewable
biomass used for cooking. Pico/micro/mini hydro plants produce electricity which helps to replace and
reduce the use of petroleum products used in rural areas of Nepal for lighting and agro-processing
activities. Solar PV home systems also replace petroleum products used for lighting at rural household.
Similarly, improved water mills (IWMs) avoids possible establishment of diesel mills for agro-processing.
There are limited studies that have analyzed the GHG mitigation potential from RETs in Nepal (Chaulagain
and Laudari (2010); Dhakal and Raut (2010); Pokharel (2007); Shakya (2005); Shakya and Shrestha
(2006); Shrestha et al. (2013)). Chaulagain and Laudari (2010) estimated the GHG mitigation potential after
2010 from selected RETs by using simple accounting approach, Dhakal and Raut (2010) studied the
potential of GHG mitigation from the application of full potential of selected RETs using accounting method,
and Pokharel (2007) also used the simple accounting approach to estimate potential GHG mitigation from
selected RETs between 2000 to 2012. But they have not considered investment requirement for the GHG
mitigation options. Shakya (2005) studied the GHG mitigation potential from different levels of installations
of solar PV home systems, ICS and micro-hydro plants under the target set by Alternative Energy
Promotion Centre/ Energy Sector Assistance Programme (AEPC/ESAP) during 2004 to 2007. It used the
bottom-up scenario generation energy system (LEAP) model for the study and also analyzed the economic
effect of incorporating carbon traded revenue in the projects considered. Similarly, Shakya and Shrestha
(2006) estimated the GHG emission mitigation due to installation of various twelve RETs till 2005/2006 in
Nepal. However, it did not estimated the technology investment cost required per ton of CO 2e of GHG
emission mitigation. Shrestha et al. (2013) used the bottom-up energy system (MARKAL) model to
estimate GHG mitigation from various options including selected RETs (solar PV home systems, ICS and
micro-hydro plants) for the year 2020. However, it did not consider all the potential RETs for GHG
mitigation and did not estimate the mitigation potential considering full utilization of available potential.
This report is a part of the study conducted to support implementation of Climate Change Policy 2011 of
Nepal. This section of the report analyzes the evolution of the energy system and greenhouse gas emission
in the past and estimated the GHG mitigation potential and the investment requirement for implementing
installation of the twelve different types of RETs after 2012 in Nepal.
6.2.

Energy System Development in Nepal

According to Central Bureau of Statistics, the countrys total population is 26.49 million, compared to 23.15
million in 2001, and the annual population growth rate is 1.35 percent (CBS, 2012). Out of the total
population, 83 percent live in rural areas. In terms of geographic distribution, Terai constitutes 50.27
percent (13,318,705) of the total population while Hill and Mountain constitutes 43 percent (11,394,007)
and 6.73 percent (1,781,792) respectively. Though Nepal is among the least urbanized countries in the
39

world, its urban population is growing rapidly at an annual rate of 3.4%, which is more than 3.5 times the
growth rate of rural population (CBS, 2012).
Biomass and hydropower are the major indigenous energy resources available in the country. Nepal is
endowed with a significant amount of water resources; the theoretical potential of its hydropower is
estimated to be 83 GW while the estimated economical potential is 42 GW (WECS, 2010). So far, Nepal
has an installed electricity generation capacity of only 719 MW (NEA, 2012). Despite the large hydropower
potential, only a small fraction of the hydropower resources (i.e., less than 2% of the economic potential) is
harnessed so far and only 67% of the population had an access to electricity from grid and off-grid systems
in 2011 (CBS, 2012).
Besides hydropower there exist several other locally available renewable energy resources which are
mostly suitable for fulfilling the distributed energy demand in rural communities of the country. These
include solar, wind, geothermal etc. The possible renewable energy technologies, which can generate
power by exploiting the locally available energy resources, includes pico-hydro and micro-hydro power,
biomass (biogas, briquettes, gassifier), liquid bio-fuel, improved cooking stove (ICS), solar photovoltaic,
solar thermal and wind powered plants. Of these technologies, micro-hydro, biogas, improved cooking
stove, solar photovoltaic (PV) home systems, and solar water heaters are becoming popular and are at
varying stages of commercialization. However, technologies such as solar cooker, solar dryer, briquettes,
wind and geothermal are only in the research and demonstration phase, and still need to be
commercialized (Chaulagain and Laudari, 2010). The estimated total potential of biogas plants is about 1.1
million plants of which 277,226 biogas plants of varying capacities (4, 6, 8, 10, 15 and 20 m3) have been
installed as of December 2012. There exist a huge potential for biomass technologies like ICS, small scale
briquetting technologies and gassifier. More than 663,114 ICS have so far been installed through various
governmental and non-governmental organizations. Besides large capacity hydropower, there exist
potential of installing about 110MW of small scale pico-hydro and micro-hydro plants suitable for supplying
electricity to distributed rural population mostly in the hilly and mountain regions of the country. As of 2012
altogether 3.2 MW of pico-hydro and 33.6 MW of mini-grid micro-hydro plants have been installed. There
exist mechanical power capacity of about 33 MW of improved water mill (IWM), of which one third have
been exploited. Nepal receives ample solar radiation with average value varies from 3.66.2 kWh/m2/day,
and the sun shines for about 300 days a year. With national average sunshine hours of 6.8/day and solar
insolation intensity of about 4.7 kWh/m2/day, there is a huge potential for solar PV as well as solar thermal
devices such as solar PV home system, solar PV pumping, solar water heaters, solar dryers, and solar
cookers. About 285,000 units of solar PV home system have been installed till 2012. Presently, solar water
heaters have been fully commercialized and, till 2009, more than 200,000 of them have been installed in
the country. Wind is still an unharnessed energy resource in the country with recently estimated
commercial potential as 3,000 MW (estimated under Solar & Wind Energy Resource Assessment in Nepal
(SWERA) program). A pilot project for demonstration and dissemination is being carried out by various
organizations like AEPC, Practical Action, etc. (Chaulagain and Laudari, 2010).
Total primary energy supply (TPES) in the country was about 292 Peta Joule (PJ) in 2005. As shown in the
Figure 6.1, it increased at the growth rate of 2.46% to reach 400 PJ by 2008/09 (WECS, 2010). The use of
fossil fuels consisting of petroleum products, LPG and coal has increased at the growth rate of 3.93%
mostly due to rapid increase in LPG consumption. Likewise electricity mostly from hydropower increase by
7.82% and other renewable excluding hydropower and traditional biomass increases by 15.19%. In terms
40

of energy mix biomass still dominates with its share of 87.1% in 2008/2009 though its share has been
slightly reduced as compared to 91.7% share in 1995/1996. However, there is an increase in the shares of
LPG (by 1.1%), coal (by 0.9%), electricity (by 9.5%), and other renewable (by 0.5%) as shown in the Figure
6.2.
450
400
Renewable
(6.3)

350

Electricity
(2.7)

250

Biomass
(1.3)

(PJ)

300

200

Coal
(2.5)

150
LPG
(6.2)

100

Petroleum Oil
(1.3)

50

0
1995/1996 1996/1997 1997/1998 1998/1999 1999/2000 2000/2001 2001/2002 2002/2003 2003/2004 2004/2005 2005/2006 2006/2007 2007/2008 2008/2009

Note: Figure in parenthesis indicates the ratio of the values of 2008/2009 and 1995/1996

Figure 6.1: Primary Energy Supply in Nepal during 1995/1996 to 2008/2009, PJ

Electricity
1.0%

Renewable
0.1%

Petroleum
Oil
7.1%

Renewable
0.7%

LPG
0.3%
Coal
1.1%

1995/1996
TPES: 292 PJ

Electricity
2.0%

Petroleum Oil LPG

6.8%
1.4%

Coal
1.9%

2008/2009
TPES: 400 PJ
Biomass
87.1%

Biomass
90.3%

Figure 6.2: Fuel Share in the Primary Energy Supply, %

41

450

(PJ)

400
350

Others
(2.8)

300

Agriculture
(5.3)

250

Commercial
(1.8)

200

Residential
(1.3)

150

Industrial
(1.1)

100

Transport
(2.4)

50
0
1995/1996 1996/1997 1997/1998 1998/1999 1999/2000 2000/2001 2001/2002 2002/2003 2003/2004 2004/2005 2005/2006 2006/2007 2007/2008 2008/2009

Note: Figure in parenthesis indicates the ratio of the values of 2008/2009 and 1995/1996

Figure 6.3: Sectoral Energy Consumption in Nepal during 1995/1996 to 2008/2009, PJ

As can be seen in Figure 6.3, the sector wise energy consumption has grown at the rate of 6.9% in the
transport sector, 4.6% in the commercial sector, 2.2% in the residential sector and 1% in the industrial
sector between 1995/1996 to 2008/2009. The energy consumption in the agricultural sector grew at 13.7%
mostly due to increase in diesel consumption. Over the period, the share of the residential sector shows
decrease from 91.7% in 1995/1996 to 89.1% in 2008/1009. The share of industrial sector shows decrease
from 4% to 3.3%, whereas the share of the transport and commercial sectors indicates increase from 3% to
5.2% and 1% to 1.3% respectively during 1995/1996 to 2008/2009. The share of agriculture and and other
sectors shows increase from 0.2% to 0.9% and 0.1% to 0.2% respectively during 1995/1996 to 2008/2009.

Commercial
1.0%

1995/1996
TPES: 292 PJ

Agriculture
0.2%

Others
0.1%

Transport
3.0%

Industrial
4.0%

Agriculture
0.9%
Commercial
1.3%

2008/2009
TPES: 400 PJ

Residential
91.7%

Others
0.2%

Transport
5.2%

Industrial
3.3%

Residential
89.1%

Figure 6.4: Sectoral Share in Energy Consumption, %

The energy consumption per capita increases by 10.1% from 14.26 GJ/capita in 1995/1996 to 15.71
GJ/capita in 2008/2009. In terms of fossil fuel consumption, the per capita consumption of fossil fuel
increases by 32.4% from 0.12 GJ/capita in 1995/1996 to 0.16 GJ/capita in 2008/2009 indicating growing
42

dependence on the imported fossil fuels. Likewise, economic activities shows improvement in terms of
energy consumption with energy intensity of GDP at constant price changes from 90.04 MJ/100 NRs in
1995/1996 to 67.87 MJ/100 NRs @ 2000 price in 2008/2009. The detail socio-economic and energyenvironmental data is given in Table 6.1.
Table 6.1: Socio-economic and Energy-environmental Indicators of Nepal
Parameters

1995/1996 2000/2001

2004/2005

2008/2009

Energy consumption(TJ)

291827

335421

367208

400506

GHG (1000 tons CO2e)

4147

5516

5587

6149

20459237

22892696

24161739

25501130

GDP (milion constant 2000/01 price )

324096

441518

497739

590107

Fossil fuel consumption(TJ)

24700

38732

36522

40765

Energy per capita (TJ/capita)

0.014

0.015

0.015

0.016

GHG per capita (ton CO2e/capita)

0.203

0.241

0.231

0.241

Energy Intensity of GDP (MJ/100 NRs)

90.044

75.970

73.775

67.870

GHG Intensity of GDP (kg CO2e/100 NRs)

1.280

1.249

1.122

1.042

GHG Intensity of Energy (kg CO2e/TJ)

14.211

16.446

15.214

15.353

Fossil fuel consumption per capita (TJ/capita)

0.0012

0.0017

0.0015

0.0016

Population

Source: WECS(2010), MoF(2012)

6.3.

Greenhouse Gas Emission Evolution in Nepal

Increasing trend of fossil fuels has contributed in an increase in the GHG emission in Nepal. As no time
series GHG emission from the consumption of energy in the country is available from the related national
government agencies, an IPCC default emission factors for individual greenhouse gas (CO2, CH4 and N2O)
as mentioned in 2006 IPCC Guidelines for National Greenhouse Gas Inventories for dedicated economic
sectors were used for estimating the national GHG emission (IPCC, 2006). It has been observed that, GHG
emissions from energy use has increase by 48.3% from 4.1 million tons CO2e (i.e., CO2 equivalent) in
1995/1996 to 6.1 million tons CO2e in 2008/2009 (Table 6.1). Figure 6.5 shows the sector wise GHG
emissions from energy use during 1995/1996 to 2008/2009. The GHG emissions from the transport,
industrial, and agriculture sectors would increase by 138%, 35% and 479% respectively during the period
mostly due to dominance of the fossil fuels in their energy consumption. While the emissions from the
residential and commercial sectors would increase by 23% and 44% respectively. The sectoral shares in
total GHG emission are shown in Figure 6.6. In 1995/1996, residential sector dominates in the share of
GHG emission with over 66.2%, followed by transport sector with 15.6% share and industrial sector with
13.9% share. Remaining sectors constitute about 4.4% in the sectoral GHG emission mix in 1995/1996.
43

However, sectoral contribution of GHG emission changes significantly in 2008/2009, with residential sector
constituting 54.9%, transport sector consisting of 25.1% and Industrial sector constituting 12.6%.
Remaining sectors contributes 7.4% in the sectoral GHG emission mix in 2008/2009.
7

6
Agriculture
(5.8)

Commercial
(1.4)

(million tons CO 2e)

Residential
(1.2)

Industrial
(1.3)

Transport
(2.4)

0
1995/1996 1996/1997 1997/1998 1998/1999 1999/2000 2000/2001 2001/2002 2002/2003 2003/2004 2004/2005 2005/2006 2006/2007 2007/2008 2008/2009

Note: Figure in parenthesis indicates the ratio of the values of 2008/2009 and 1995/1996

Figure 6.5: Sector wise GHG Emissions during 1995/1996 to 2008/2009, million tons CO2e

Agriculture
4.2%
Commercial
3.2%
Agriculture
1.1%
Commercial
3.3%

Transport
15.6%

Industrial
13.9%

Residential
66.2%

1995/1996
GHG: 4.1 million
tons CO2e

Transport
25.1%

Residential
54.9%

Industrial
12.6%

2008/2009
GHG: 6.1 million
tons CO2e

Figure 6.6: Sectoral Shares in GHG Emission in the Base Case, %

The per capita GHG emission increases from 0.20 ton CO2e/capita in 2005 to 0.24 ton CO2e/capita in
2030. This indicates, future life style would be inclined towards carbon intensive fossil fuels mostly due to
44

the limitation in the supply of the biomass energy resources and capital intensiveness of hydropower and
other renewable resources.

6.4.

Role of RET in GHG Mitigation Potential and Cost in Nepal

Intensive literature review on the GHG emission reduction from the RET, installation potential, cost of the
technology, economic life and other parameters were done based on the existing national and international
publications and literatures. Altogether 12 renewable energy related cleaner technology options were
considered for the analysis of their contribution in GHG mitigation and investment requirement associated
with it. The selected RET based on the available data for the estimating the GHG reduction potential in
Nepal constitute, biogas, improved cooking stoves, solar PV home systems, solar thermal systems, solar
PV pumping, wind electric generator.
The study shows that altogether 4.17 million tons of CO2e of the GHG emission can be mitigated by
deploying seven major RET options consisting of biogas, improved water mill, stand-alone micro-hydro
plants, mini-grid micro-hydro plants, solar PV home systems, mud-ICS and metal-ICS after 2012. This
figure is within the range mentioned by other studies by Chaulagain and Laudari (2010), Dhakal and Raut
(2010), Pokharel (2007) and Shrestha et al. (2013). The details on the parameters considered, assumptions
used are mentioned in the Table 6.2. Shrestha et al. (2013) estimated the total GHG mitigation potential
from thirteen different RET and energy efficient options for the year 2020 as 0.83 million tons CO2e. This
figure is quite low mainly due to the limited number of RET options (solar PV home system, stand alone
micro-hydro plants and improved cooking stoves) considered for estimating GHG mitigation potential. The
study used data intensive bottom-up least cost optimization model (MARKAL) for the analysis. Pokharel
(2007) estimated the GHG mitigation potential from RET as 1.42 million tons of CO2 in 2012. It compared
the GHG emission due to the penetration of the selected RET technologies between 2000 and 2012. On
the other hand, Chaulagain and Laudari (2010) estimated the GHG mitigation potential from RET as 4.98
million ton CO2e using accounting approach. Likewise Dhakal and Raut (2010) estimated GHG mitigation
potentials from intervention of full potential of ICS, biogas and solar PV home system as 8.16 million ton
CO2e.
In terms of shares of the RETs in GHG mitigation, biogas can contribute the most with GHG mitigating
potential of 2 million ton of CO2e (48.1% of the total GHG mitigation potential from RET) with the installation
of 722,774 number of biogas plants after 2012 (Figure 6.7). This is followed by the installation of 898,487
ICS with the GHG mitigation potential of 1.8 million ton of CO2e (share of 44.2%). The stand alone and
mini-grid micro-hydro plants can contribute 170 thousands ton of CO2e (4.1% of the GHG mitigation
potential) by installing 73.2 MW of their combined capacity. IWM and Solar PV home system can contribute
114 thousands ton of CO2e (share of 2.7%) and 114 thousands ton of CO 2e (share of 0.9%) of the
estimated GHG mitigation potential from selected RETs by installing 22.7 kW of IWM and 215,903 solar PV
home system respectively. Details of the analysis are given in Table 6.2.
45

4,500,000

4,174,940

4,000,000
Total GHG Mitigation
Potential per year

500,000

15,300

1,000,000

37,308

417,659

1,500,000

Cumulative GHG
Mitigation Potential
per year
113,613

2,000,000

154,893

2,500,000

1,426,855

(ton CO2e)

3,000,000

2,009,312

3,500,000

Stand alone
MHP

Solar PV
home System

IWM

Mini-grid
MHP

Metal-ICS

Biogas

Mud-ICS

Figure 6.7: GHG Mitigation Potential of Renewable Energy Technologies in Nepal, ton CO2e

4820

6000

1258
Solar PV home
System

1550

1180

277
IWM

72
Biogas

239

62
Metal-ICS

Solar Dryer

32
Mud-ICS

1000

143

2000

Stand alone
MHP

2358

3000

2111

4000

Solar Cooker

(NRs/ ton CO2e)

5000

Wind
Generator

Solar PV
Pumping

Solar Water
Heater

Mini-grid MHP

Figure 6.8: Annualized Technology Investment Cost @ 10% interest rate, NRs/ ton CO2e

46

In terms of initial technology investment required for implementing above mentioned RET options to
mitigate GHG emission, ICS requires annualized initial technology investment cost below NRs 63 per ton of
CO2e mitigation (Figure 6.8). Biogas and IWM would require annualized initial technology investment cost
of NRs 71.66 per ton of CO2e and NRs 276.94 per ton of CO2e mitigation respectively. The annualized
technology investment cost for mitigating GHG emission from stand alone and mini-grid micro-hydro plants
are estimated as NRs 1,180.22 per ton of CO2e and NRs 1,549.79 per ton of CO2e mitigation respectively.
Solar PV home system would require the annualized initial technology investment of NRs 1,258.50 per ton
of CO2e mitigation. The details of the investment cost for solar PV pumping, solar thermal water heater,
solar thermal dryer and solar thermal cooker and wind electricity generator are given in Table 6.3.

47

Table 6.2: GHG Mitigation Potential of Renewable Energy Technologies in Nepal

RET

Biogas

Mud-ICS

Metal-ICS

MHP-Stand
alone

Capacity/unit

6 m3 unit

two pot hole

family size
unit

two pot hole

family size
unit

per kW

Life
(year)

20

15

GHG
mitigation
per unit
per year
(tCO2e)

No of
installation
till 2012

Total
Installation
Potential

Remaining
Potential

Total
GHG
Mitigation
Potential
per year
(tCO2e)

2.780

277,226

1,000,000

722,774

2,009,312

Remarks
Considering saving due to substitution of non-renewable
woody biomass as used in CDM PDD of Nepal Biogas
Support Program. Chaulagain and Laudari (2010) used 2.3
ton CO2e figure, Shakya and Shrestha (2006) used 7.6 ton
CO2e figures, Dhakal and Raut (2010) used 8.99 ton CO2e
value and Pokharel (2007) uses 6.6 ton CO2 values. The
assumed potential is around 36% of traditional fuel wood
stove users in 2011.

1,426,855

Considering saving due to substitution of non-renewable

woody biomass as used in CDM PDD of Promotion of the
Improved Cooking Stove (ICS) Nepal. Efficiency of
traditional cook stove and mud-ICS were taken as 10% and
20% respectively. Chaulagain and Laudari (2010) used 1.2
ton CO2e figure, Dhakal and Raut (2010) used 1.09 ton
CO2e value and Pokharel (2007) used 3.8 ton CO2 value

1.898

2.847

2.246

654,639

8,475

3,189

1,406,421

155,179

751,782

146,704

10,000

6,811

48

417,659

15,300

Considering saving due to substitution of non-renewable

woody biomass as used in CDM PDD of Promotion of the
Improved Cooking Stove (ICS) Nepal. Efficiency of
traditional cook stove and metal-ICS were taken as 10%
and 25% respectively.
Assuming estimated rural hh electricity demand for lighting
purpose as 18 KWh per month, considering 1 KW serves 13
hh and emission factor for diesel based generation as 0.8
kg CO2e/kWh as used in CDM PDD for MHP, the annual
GHG mitigation per kW comes out to be 2.33 ton CO2e.
Shakya and Shrestha (2006) reported GHG mitigation per
kW as 1.04 ton CO2e assuming 37.26 liters kerosene being
used for lighting purpose by average rural hh.

RET

MHP-Mini grid

IWM

Solar PV home
system

Capacity/unit

per kW

per kW

35 watt peak
unit

Life
(year)

15

10

15

GHG
mitigation
per unit
per year
(tCO2e)

2.333

4.990

0.173

No of
installation
till 2012

33,602

10,635

284,097

Total
Installation
Potential

Remaining
Potential

100,000

66,398

33,405

500,000

22,770

215,903

49

Total
GHG
Mitigation
Potential
per year
(tCO2e)

Remarks

154,893

Assuming estimated rural hh electricity demand for lighting

and milling purposes as 27 KWh per month, considering 1
KW serves 9 hh and emission factor for diesel based
generation as 0.8 kg CO2eq/kWh as used in CDM PDD for
MHP, the annual GHG mitigation per kW comes out to be
2.33 ton CO2e. Shakya and Shrestha (2006) estimated
GHG mitigation per kW as 2.17 ton CO2e considering 372.6
liters kerosene being used for lighting purpose and 38.2
liters diesel for milling purpose. Pokharel (2007) reported
1.4 tCO2 reduction per kW and Chaulagain and Laudari
(2010) reported 2.3 tons CO2e reduction.

113,613

Considering 1 KW serves 33 hh with milling demand of 9

kWh per month and emission factor for diesel based milling
operation as 1.4 kg CO2/kWh as used in CDMPDD of
Promotion of the Improved Water Mills (IWM) in Nepal.
Chaulagain and Laudari (2010) mentioned the GHG
mitigation per IWM system as 8 tonCO2e per year.

37,308

Assuming estimated rural hh electricity demand for lighting

purpose as 18 KWh per month and emission factor for
diesel based generation as 0.8 kg CO2eq/kWh, the annual
GHG mitigation per system comes out to be 0.173 ton CO2e
. Shakya and Shrestha (2006) estimated annual GHG
mitigation per system as 0.104 ton CO2e assuming 37.26
litres kerosene being used for lighting purpose by average
rural hh . Pokharel (2007) mentions GHG reduction of 1 ton
CO2 in its life time. Chaulagain and Laudari (2010)
mentioned annual reduction of 0.22 ton CO2.

RET

Capacity/unit

Life
(year)

GHG
mitigation
per unit
per year
(tCO2e)

No of
installation
till 2012

Total
Installation
Potential

Remaining
Potential

Total
GHG
Mitigation
Potential
per year
(tCO2e)

Remarks

Solar PV
pumping

1 kW

15

1.780

145

Considering annual diesel saving of 606.7 liters per year

(Shakya and Shrestha, 2006)

Solar Thermal
water heater

230 ltr

10

0.280

60,000

Assuming in 100 liters of kerosene per year being replaced

(Shakya and Shrestha, 2006)

Solar Thermal
dryer

box type unit

0.430

2,396

Considering 750 kg fuel wood being saved for drying

purpose (Pokharel and Munakami, 2006)

Solar Thermal
cooker

concentric
type unit

10

0.860

1,920

Assuming 1500 kg fuel wood being saved for cooking

purpose (Pokharel and Munakami, 2006)

Wind electricity
generator

200 watt peak

unit

15

0.209

21 (13.6
kW)

assuming one HH use 100 watt for lighting application

(Practical Action/Nepal, 2006)

Grand Total

4,174,940

Source: AEPC (2012), AEPC/ESAP (2011), Chaulagain and Laudari (2010), IPCC (2006), Pokharel (2007), Pokharel (2013), Pokharel and Munakami, (2006), Practical
Action/Nepal (2006), Shakya and Shrestha (2006), UNFCC CDM PDD documents.

50

Table 6.3: Investment Requirement of Renewable Energy Technologies for GHG Mitigation in Nepal

RET

Capacity/unit

Biogas

6 m3 unit

Cost
(NRs)

Life
(year)

Post 2012
Installation
Potential

GHG mitihation
potential
(tCO2e)

Unit Technology
Investment (NRs/
ton CO2e/year)

Annulized
Technology
Investment @ 10%
ir (NRs/ ton CO2e)

35,000

20

722,774

2,009,312

12,589.93

71.66

Mud-ICS

two pot hole family

size unit

500

751,782

1,426,855

263.44

32.40

Metal-ICS

two pot hole family

size unit

5,000

146,704

417,659

1,756.27

62.47

MHP-Stand
alone

per kW

315,807

15

6,811

15,300

140,583.63

1,180.22

MHP-Mini grid

per kW

430,646

15

66,398

154,893

184,604.77

1,549.79

IWM

per kW

90,000

10

22,770

113,613

18,037.52

276.94

Solar PV home
system

35 watt peak unit

25,904

15

215,903

37,308

149,907.41

1,258.50

Solar PV
pumping

1 kW

500,000

15

280,898.88

2,358.19

Solar Thermal
water heater

230 ltr

38,500

10

137,500.00

2,111.09

Solar Thermal
dryer

box type unit

2,100

4,883.72

238.52

Solar Thermal
cooker

concentric type unit

8,000

10

9,302.33

142.82

Wind electricity
generator

200 watt peak unit

120,000

15

574,162.68

4,820.18

Source: AEPC (2012), AEPC/ESAP (2011), Chaulagain and Laudari (2010), IPCC (2006), Pokharel (2007), Pokharel (2013), Pokharel and Munakami, (2006), Practical
Action/Nepal (2006), Shakya and Shrestha (2006), UNFCC CDM PDD documents

51

6.5.

Co-benefits of RET based GHG Mitigation

Proper application of RETs not only helps to mitigating GHG emission but also provide multitude cobenefits. The major co-benefits of these technologies can be summarized as follows:
helps to reduce unsustainable use of fuel wood and thus reduces deforestation and preserve local
environment and ecosystem in sustainable manner
results reduction in the use of fossil fuel (kerosene, diesel, LPG) thus improving energy security
and economic vulnerability for net fossil fuel importer country like Nepal
reduces indoor air pollution, related diseases and improves physical environment of surroundings
supports the establishment of micro-enterprises like agro-processing, bakery, saw mill etc. in the
rural communities
helps to provide access to information (TV, Radio, Telephone)
enables saved time to be utilized in income generating and community development activities
brings about saving on regular expenses (energy, health etc.) of HHs
supports women empowerment and provides opportunity for education to girl children
contributes positively to gender and social inclusion
enhances adaptive capacity to climate change through poverty reduction
Mitigation benefits, adaptation benefits and other co-benefits from different small-scale decentralized RETs
are shown in Table 6.3.

52

Table 6.4: Mitigation and adaptation benefits from different small-scale decentralised renewable energy technologies
Types of
Renewable
Efficient use of
Biomass (Cooking
and Heating
appliances)

Application

Mitigative Benefits

Adaptive Benefits

Cooking

Reduced use of charcoal

and wood fuel and less
pressure on natural
resources

Reducing the likelihoods

of deforestation through

continued used of wood fuel

and charcoal

Reduced use of biomass

Adapting to soil erosion,

aridity and environmental
degradation

Water heating
Agro processing

Biogas plants

Cooking
Water heating

Solar Thermal
Systems (Solar water
heater, solar dryer,
solar cooker etc.)

Production of sludge
for fertilizers
Water Heating
Cooking
Agro Processing/Drying

Solar PV Systems
(Solar PV home
system, solar PV
pumping etc.)

Lighting
Water pumping
Water desalination

Micro-hydro,
Improved Water Mills

Reduced consumption of
wood fuel, kerosene, and
diesel
Reduced pressure on the
environment and natural
resources
Improved local air quality
Reduction of GHG and
reduced dependency on
kerosene, wood fuel and
diesel

Lighting

Reduction of GHG

Milling/Agro processing

Protection of land cover

Co-Benefits
Creation of jobs and livelihood opportunities
Reduced drudgery therefore better quality of quality of
live
Reduction of time spent on fuel collection
Reduction of incidents related to indoor air pollution
and respiratory infections prevalent with biomass
Environmental sustainability
Better prospects of agricultural productivity
More chances to generate income

Improved quality of life

Reduced health risks
Improve energy security

Build resilience and coping

strategies of communities
especially during drought
periods

Thus reduced vulnerability

to water shortages

Access to information
technology etc

Source: Christensen et al. (2006) and author own interpretation

53

Improved access to water

Reduced drudgery for women
responsible for water collection
Reduced risks of infected water therefore improved
sanitation and health
Improved food security
Reduced out migratory fluxes
Improved health (indoor air pollution and other
respiratory illnesses ) as kerosene lamps are not no
longer used
Greater school attendance with electrification at
school
Access to internet facilities with electrification

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