Distributed Energy Infrastructures in Nepal Based on Small-Scale Hydropower Technologies

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Case Study

By Beatriz Rivela, Fausto Paulino Washima et al.:

"Small-scale hydropower, or micro-hydro, is one of the most cost-effective energy technologies for rural electrification. It makes use of a local energy resource, which can be usefully harnessed for rural energy demands from small rivers, where there is a gradient of a few meters and the flow rate is more than a few litres per second. It is a clean option based on locally available resources and can be reliable and affordable when appropriate technologies and approaches are used for its implementation, operation and management. It can be economically and socially viable, using local materials and capabilities for installation. It can generate energy 24 hours a day continuously at its full capacity (if needed), the marginal costs are negligible and it can promote job creation and the productive use of energy for income generation and for the social development of communities. There are a large number of successful small hydro projects in various developing countries, which show their adaptability to the local conditions, their sustainability and their positive contribution to local development.

Micro-hydro plants (from 5kW to 100kW) basically divert flowing river water, with no significant dams, and use the forces of gravity and falling water to spin turbines that generate power before churning the water back into the river downstream. In these “run of the river” systems, water is channeled off through small canals and stored briefly in a settling tank to separate sediment, then dropped through a steep pipeline that delivers it into a turbine. According to the experience of Practical Action (2014) (an NGO inspired by E. F. Schumacher’s [1973] Small is Beautiful), small hydropower technology is one of the small-scale renewable energy technologies that is most adaptable to local conditions, with great potential for sustainability. Introduced properly and within an appropriate policy framework, it can promote local technology and skills. Small-scale hydro energy schemes can be entirely operated and managed by the community itself, reducing costs and making an efficient use of human and natural resources.

Although consultants and companies that specialise in the implementation of energy projects claim that the development of distributed energy infrastructures entails a relatively high investment cost, Practical Action (2014) reports that projects based on the use of locally available resources and on the adoption of appropriate technologies and approaches, are characterised by a much lower cost. From implementation in Peru, Sri Lanka, Nepal and several other countries, Practical Action has found that the cost for small hydropower systems ranges from US$ 1,500 to US$ 3,000 per Unit kW installed, which roughly means an investment cost of US$ 500 to US$ 1000 per connection. Technology research has reduced the cost of small hydro, and the free sharing of technology and know-how (encapsulated, for example, in the design manual for micro-hydro [Harvey, 1993]) has created the capacity to manufacture locally much of the equipment. Alternative materials have been developed and skills transferred to local consultants to design and implement hydro systems. Local technicians (at the community level) can operate and maintain these systems, and appropriate management and administrative models have been developed to suit local needs. As a result, there are now several countries with the capacity to manufacture and install equipment at very competitive costs. For the smaller hydropower schemes, major cost reductions have been achieved through the use of alternative materials and components, local capacity and skills: At present it is possible to find locally manufactured equipment for micro hydropower at one half, or even one third, of the cost of its imported equivalent. For pico-hydro (below 5kW), it is possible to find components that cost one third to one fifth of the equivalent imported parts (e.g., synchronous generators, hydraulic governors and others) (Practical Action, 2014).

The experience of Practical Action also shows that small hydro can create exceptionally low energy unit (kWh) costs compared to other options. With the appropriate technologies, implementation and management, the cost of a kWh for micro-hydro can be as low as about one half of the cost of locally-made wind energy systems and about one tenth of the unit energy cost of home solar systems (for decentralised rural application) and, finally, about one half to one fourth of the unit cost of energy produced with diesel sets.

Specifically in Nepal where about 63% of the households do not have access to electricity (World Bank, 2010), since the industry’s birth in the 1960s some 2,200 micro-hydro plants have been put into place, totaling around 20MW, which now provide electricity for some 200,000 households (Handwerk, 2012). Around 65 private companies provide services related to the implementation of micro-hydropower projects under the aegis of the umbrella organisation, Nepal Micro Hydropower Development Association.

The 323 operational RERL (Renewable Energy for Rural Livelihood programme) facilities alone now create more than 600 full-time jobs and about 2,600 people have been technically trained on how to operate a facility. But micro-hydro’s impact on employment goes further and includes specialised training to help spread electric access benefits across the community. Under the programme more than 34,000 people, including 15,000 women, have been trained in larger efforts to develop capacity on renewable energy, manage local micro-hydro units and cooperatives, and initiate other environmentally-related activities (Handwerk, 2012). Similar efforts have been performed in Sri Lanka, Peru, Ecuador and other countries (Practical Action, no date).

In Ecuador, a project by ESMAP (World Bank, 2005) has undertaken the groundwork to establish the roadmap for pico-hydro development by initiating a market assessment for pico-hydro in the Andean region, by developing the technical capacity to install and maintain pico-hydro systems at demonstration sites, and by helping a small group of businesses see the commercial opportunities arising from the sale of pico-hydro systems in the country." (http://peerproduction.net/issues/issue-7-policies-for-the-commons/peer-reviewed-papers/transforming-the-energy-matrix/)