The journey to the interconnection was neither simple nor short. The idea of connecting MHPs to the national grid is not new in Nepal, having been mooted as far back as 2006. By 2015, the Nepal Electricity Authority (NEA) and the Alternative Energy and Power Centre (AEPC) had agreed to the MHP grid interconnection in principle. NEA, which is the sole utility in Nepal, is responsible for the implementation of all grid based electrification under the Ministry of Energy, while the AEPC tends to renewable energy-off grid electrification under the Ministry of Population and Environment. So, the in-principle agreement of the two responsible agencies was a significant step in the direction of MHP grid interconnection. However, in spite of the in-principle agreement, matters moved forward slowly because ‘the reluctance of the NEA reflected in the directives of senior NEA management was not conducive for grid connection’, according to Jiwan Mallik, one of the individuals who worked closely on the interconnection effort. The reluctance was based on a number of question-marks concerning the technical robustness and safety of such an arrangement, as well as the managerial entanglements. Although AEPC worked steadily to address these concerns, by first drawing up a ‘Micro Hydro Projects Interconnection Equipment Standards and Specifications’, and then performing a financial viability study for grid connection, a pilot was still not forthcoming.
A small but vital nudge that tipped the NEA policymakers in favour of MHP grid interconnection came in the form of HPNET’s Practice-to-Policy Exchange for Grid Interconnected Micro and Mini Hydropower in South and Southeast Asia workshop held in Sri Lanka, in January 2016. Hosted by pioneering organizations Janathakshan and Energy Forum in Sri Lanka, the workshop had been targeted at policymakers, utilities, and developers of eight countries. The Nepal contingent was drawn from all three sections. This exchange was exactly what they needed. Within five weeks of the Sri Lanka workshop, the attendees held a follow-up workshop on the 4th of March in Lalitpur, in order to build on the confidence gained from the Sri Lankan evidence of the feasibility of grid interconnection. In late March 2016, the NEA entered into a Power Purchase Agreement with two MHPs on a pilot basis. One of these was the Syaurebhumi MHP.
The costs to interconnect the Syaurebhumi MHP to the central grid, ~$30,000, was provided as a one-time subsidy from the Government of Nepal for piloting grid interconnection. Future MHP interconnections will not be subsidized. The current PPA for the MHP is based on the same rates and conditions as those for bigger hydropower projects up to 25MW. Even with those figures, the Syaurebhumi MHP can earn an annual income of nearly $10,600. If this pilot is successful, it can rejig the antagonistic relationship of MHPs and the national grid into a complementary one. It can also reframe MHPs from being the only recourse of remote villages to being an active contributor of clean energy to the country. What is more, it can also become a feasible business avenue for local entrepreneurs.
For HPNET, the grid interconnection of Syaurebhumi validates our belief that regional practice-to-policy dialogue is an invaluable resource of pooling together knowledge, and can provide the little spark that fires up action. For instance, being able to witness a successful grid interconnection in Sri Lanka gave the Nepali policy-makers the confidence to greenlight the grid interconnection pilot. We hope to be able to continue creating these nodes of inspiration. Perhaps the next practice-to-policy exchange could even include a field trip to Syaurebhumi!
This blogpost is draws generously on an article by Jiwan Kumar Mallik, and a report from the Nepal Micro Hydropower Development Association. Additional information about the Syaurebhumi Micro Hydro project can be found at the UNDP Nepal website here.