Home to the majestic Himalayas, Nepal's terrain along with its tumultuous political history set the backdrop for people-powered infrastructure solutions. Remote communities nestled among the peaks, perennial streams, and fertile terraces form the fabric of the landscape. The DNA of these and other mountain peoples' communities reaps of resilience. Generations have long utilized water to reduce drudgery, e.g. water mills for agro-processing and gravity flow to irrigation.
Electricity was introduced in the country in the early 1900's, but decades later most of the country remained without it. Staring in the 1960's, European aid groups initiated micro hydro technology transfer, including refurbishing water mills to generate electricity. This effort planted the seeds that evolved into Nepal's capacity to generate over 30MW from pico, micro, and mini hydro projects that serve ~300,000 households.
In today's era of SE4ALL and other initiatives with ambitious rural electrification targets, let's take a hindsight look at the factors that led to Nepal's ability to scale hydro mini-grids.
Long-term and Appropriate Funding
Often, multi-lateral donors for energy access work are forced to spend large funds in a relatively short period of time. This structure and culture of funding is perhaps inherited from the developed world's notion of infrastructure development, e.g. large projects that require big money, fast. However, in the world of well-established decentralized renewable energy, the pace of funds utilization exponentially grows. If in the initial phases, funds are carefully invested into developing local capacities, then later the implementation progress climbs fast.
This has been the case in Nepal. Exponentially over the last 20 years, multi-lateral donors have supported Nepal's micro hydropower development with $54 million. As shown on the HPNET Nepal fact sheet, the initial funding came in lesser amounts and with longer duration.
Nepal's scaling up of its micro hydro sector can be attributed also to the capacity building of local practitioners (e.g. a local companies or community organizations that design, implement, and sustain the project). Both the government and donors took time to understand the local private sector and identify ways to strengthen it, over the long-term with appropriate financing. The government established the Alternative Energy Promotion Centre (AEPC) as the central agency to facilitate energy work among government, non-government, and private sector organizations. Practical Action, an international NGO with rich perspective on local technology, works closely with AEPC to develop appropriate local capacities. Local groups, such as the Center for Rural Technology, People, Energy, and Environment Development Association (PEEDA), and others also have supporting roles.
In this way, technology transfer has led to a professional local industry that can produce quality turbines, civil works, transmission lines, and electronics, in order to implement many projects in parallel. In fact, the local private sector became strong enough to organize itself into a vibrant association to called the Nepal Micro Hydro Development Association (NMHDA). Running efficiently with low overhead costs, NMHDA helps the local private sector to continuoulsy find ways to address its knowledge needs.
With each wave of funding dedicated to micro hydropower, AEPC has examined the results of the previous policy, in order to identify modifications for the next iteration. Rather than a one-off policy design not amenable to changes, Nepal's program designers continue to create better financing mechanisms for improved micro hydropower. With each iteration and its challenges, new partners have been established, such as Energising Development (EnDev) Nepal's work on developing debt financing, and the Clean Energy Development Bank's (CEDBL) support for grid-connected micro hydro. Further, the iterative process of policy design has made it possible for the government and private sector to innovate technology, e.g. connecting multiple projects into a mini-grid.
Among other factors, Nepal's impressive ability to organize multi-actors to give life to a professional, rural energy private sector -- and iteratively improve it as the context requires -- reflects it is more resilient than ever to overcome the vast devastation left behind by the earthquakes, as well as contribute insight towards development of the region.
The earthquakes caused nearly 100 micro hydro projects to be shut down, with nearly 250 others being impacted. The well-established organizations (mentioned above) are identifying and addressing near and medium term rehabilitation needs for micro hydro projects. This rapid assessment of damaged projects also include a failure analysis to recommend changes for future micro hydro projects. This work is in addition to their immediate relief work. With basic needs for food and shelter, impacted communities in coming months will start re-building their micro hydro systems with support from AEPC and partners.
The highly experienced practitioners, policy makers, and program administrators in Nepal are committed to exchanging with regional contexts -- to both contribute and learn from them. In 2010, US AID established the Regional Centre for Excellence in Micro Hydro (RCEMH) to strengthen the sector both in Nepal and regionally. HPNET also serves as exchange platform to bring in the hindsight of the Nepal micro hydropower context to less developed regions, e.g. practice-to-policy exchange in Myanmar. For more on Nepal's micro hydro progress, check out UNDP's video here.
By HPNET Members Madhushudhan Adhikari (AEPC) and Dipti Vaghela