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NEPAL CASE STUDY: TARA KHOLA MINI HYDRO PROJECT

2/19/2023

Social Enterprise for Optimal Outcomes

Drawing on 40+ years of experiential hindsight from practitioners in the Asia Pacific, HPNET has identified a linkage between enterprise-based approaches and hydro mini-grid sustainability. Social Enterprise for Energy, Ecological and Economic Development (SEEED) is HPNET’s approach for community-scale hydro implementation that integrates key factors for optimizing sustainability and community empowerment beyond electricity – centering local social enterprise in the pathway to mini-grid sustainability.

Supported by Renewable Energy for Rural Livelihood (RERL) in Nepal, the Tara Khola Mini Hydro Project provides an example of an enterprise-based approach that has enabled a financially viable energy system, unlocking benefits for local livelihoods, economic development, grid interconnection, and more.

Renewable Energy for Rural Livelihood (RERL)

RERL is a joint project of Government of Nepal (GoN) and United Nations Development Programme (UNDP). The project has been operational since 2011 after the closure of Rural Energy Development Programme (REDP) with the main objective of supporting AEPC to scaleup RE project implementation. Since 2019, RERL has also been providing TA support to AEPC to implement South Asia Subregional Economic Cooperation (SASEC) funded by Asian Development Bank (ADB) to install 4.3MW mini hydropower projects and 0.5MW solar/solar wind hybrid mini grids in off-grid areas of Nepal. Since March 2022, RERL is also implementing Japan-UNDP Support for Transition Effort to Decarbonization (JUSTED).

The following case study on the Tara Khola Mini Hydro project is posted with permission from RERL's Quarterly Update July - Sept. 2022.

A Case Study of Tara Khola Jalbidyut Company Ltd., Baglung

The 380kW Tara Khola Mini Hydropower Project (TKMHP) was completed in October 2019
and provides quality electricity services to 1800 households (HHs) and over 50 productive
energy uses (PEU) . The project was developed with subsidy from Alternative Energy
Promotion Center (AEPC) and community equity and loan and technical support of
Renewable Energy for Rural Livelihood (RERL). The project was initially promoted by a Users’
Group with 9 executive members who were responsible for equity collection, coordination
with the contractor and concerned stakeholders for construction of the project. However, in spite
of endless efforts of the executive members, they were not able to collect the required equity
amount and take out a loan to achieve financial closure. The beneficiaries then decided to develop the project through a public limited company with all of them as shareholders and registered Tara Khola Jalbidyut Company Limited for construction and operation and management. The company has authorized capital of NPR 100 Million and paid up capital of NPR 3 Million.

After the company took over the operations, the local people’s perception towards their project completely changed as the roles and responsibilities of the Board of Directors, staff and shareholders were clearly defined, all financial transactions were well recorded and could be observed by the ordinary shareholders. As a result, the company was able to collect equity of NPR 6 million from 1700 shareholders and a loan of NPR 14,853,822 from CYC and Jana Ekata Multipurpose Cooperative Limited, Baglung.

As of 2021, the plant is providing regular electricity to 1700 households, 45 slate industries, 4 carpentry businesses and 12 sawmills. These productive uses have generated employment opportunities for over 300 women and men locally. Moreover, the slate industries are vital actors in the slate value chain in the market. Furthermore, the plant is providing electricity to a number of productive energy uses such as poultry farming, a beauty parlor, fresh house/butcher shop, eateries, etc.

Tara Khola MHP Monthly Tariff Rates

Slate industries: NPR 1500 and NPR 50 per kWh
Other end uses: NPR 500 and NPR 12 per kWh
Residential: NPR 100 and NPR 12 per kWh

Tarakhola Jalbidyut Company Limited signed a Net Metering Agreement with Nepal Electricity Authority (NEA) in 2021 and has been continuously selling electricity to the national grid. The total income of the company in the same year was NPR 15,000,000 from both local consumption and sales to NEA, whereas its expenses during the same period was NPR 6,594,040 and made a net profit of NPR 8,405,960.

In order to operate and manage the project, the company has hired 3 operators, a linesman and a manager who were all trained by AEPC/RERL to enhance their skills for proper handling of the machinery and management of the project. Furthermore, AEPC/RERL also provided orientation to Directors on management of a public limited company, particularly legal aspects.

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CAMBODIA DIALOGUE: TOWARD A JUST ENERGY TRANSITION IN ASEAN

2/9/2023

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From October 3-4, 2022 in Siem Reap, Cambodia, a regional multi-stakeholder dialogue “Toward Just Energy Transition in ASEAN”, was organized by Oxfam Cambodia, Australian Aid, Heinrich Böll Stiftung Southeast Asia and Energy Lab Cambodia. The event aimed to facilitate dialogue on ensuring justice and equity for vulnerable communities within the transition from fossil fuels to clean energy in the region. The dialogue furthermore sought to solicit input for and finalize a policy brief to promote equity and justice within ASEAN energy policy development, ahead of the 2022 ASEAN Summit.

Mr. Tarek Ketelsen, Director General of the Australia Mekong Partnership for Environmental Resources and Energy Systems (AMPERES) and a member of HPNET, supported the design of the event. The HPNET Secretariat was invited to take part and facilitated the participation of HPNET members Ms. Nalori Chakma, Advocacy Officer at the Right Energy Partnership (REP) and Ms. Jade Angngalao, Area Coordinator at the Department of Social Welfare and Development through PAyapa at MAsaganang PamayaNAn (PAMANA), who has supported micro hydro efforts in her community and other Kalinga communities in the Philippines.

During the two-day dialogue, speakers shared various perspectives and insights regarding the regional context of the energy transition, its challenges, and potential opportunities, with an emphasis on social justice and inclusion.

Policy Objectives

Civil society and academic stakeholders from across the ASEAN region provided inputs during the workshop which contributed to the development of a policy brief intended to inform policy development relating to ASEAN’s commitment to net zero emissions. Chiefly, the policy brief presents a path forward to ensure the achievement of a socially equitable energy transition in the ASEAN region. The policy brief was subsequently presented by an Oxfam member during the ASEAN Summit which took place in Phnom Penh in November, and will be disseminated at other ASEAN gatherings and events where different government leaders and stakeholders are present.

A Spotlight on Social Equity for a Just Transition

In an insightful op-ed published by Oxfam Cambodia following the regional dialogue, the author emphasizes that, “with its principle of cooperation and mutual benefit, ASEAN could become a global leader by promoting a just energy transition that does not compound existing inequalities and leaves no one behind”.

This risk of compounding existing inequalities was addressed by several participants at the regional dialogue, including Ms. Chakma of REP, who flagged a threat around land grabbing that has been linked to mining for lithium-ion batteries for solar PV electricity in parts of India and the United States. As governments ramp up production of lithium to meet clean energy goals, REP emphasizes the need to uphold the rights of Indigenous Peoples, as well as elevate alternative clean energy technologies like small-scale hydropower, which has been increasingly sidelined as solar PV has taken centre stage.

In addition, a key element of the dialogue was the potential – and ethical imperative – to dovetail the rollout of clean energy infrastructure with rural electrification through an approach that empowers marginalized communities. Ms. Angangalo highlighted that Indigenous and local communities have long been leaders in this field, leveraging renewable energy within community-based efforts to facilitate energy access. It is critical that ‘last mile’ communities are centered in the ASEAN clean energy transition, and SDG 7 is prioritized within pathways to ‘net zero’.

The dialogue thus underscored the opportunity to elevate decentralized renewable energy (DRE) as a key component of a just transition. Participants brought forth a number of policy solutions to advance this aim. For instance, Ms. Chakma of REP suggested subsidies and soft loans to communities, and support directed to productive-end-use to help sustain DRE systems. She and others, including Mr. Ketelsen of AMPERES, also noted that as countries develop policies to support grid interconnection of DRE, a key part of a just transition is ensuring that communities in ASEAN have the opportunity to generate income from selling electricity to the grid. (To learn more on this topic, see HPNET’s Grid Interconnection Work Stream).

Community Hydropower as a Uniquely Appropriate Technology

Community-scale hydropower became a focal point of several discussions, largely thanks to presentations and inputs by the HPNET members. During the Roundtable discussions, participants discussed several ways in which community hydro is uniquely well positioned for advancing a just, clean energy transition in the region.

Ms. Angngalao delivered a presentation on community-based renewable energy systems andIndigenous Peoples in the Philippines and introduced HPNET’s knowledge exchange and advocacy initiatives. The presentation highlighted how community hydro is collectively built and operated, and generates a wide range of socio-economic and ecological benefits. For instance, micro hydro can support motorized loads for agro-processing and incentivizes sustainable watershed stewardship aligned with Indigenous governance traditions.
Given said connections with environmental conservation, Ms. Chakma or REP also noted the opportunity for micro hydro communities to leverage conservation finance and carbon credits for forest management.
Ms. Chakma also highlighted that community-scale hydropower sidesteps the human rights and land grabbing issues arising in connection with lithium-ion batteries used for solar PV systems. (Notably, a clear distinction was drawn between small-scale (< 1MW) versus large scale hydropower dams, the latter of which have long been associated with land grabbing and ecological harm, though sometimes promoted as “clean energy”.)
Mr. Ketelsen of AMPERES imparted some of the best practices and opportunities observed in Myanmar, a country with a long-established, locally-rooted DRE sector where over 6,000 small-scale hydropower systems have been installed by local developers, largely without donor support or foreign technology. Mr. Ketelsen observed that that micro hydro is a particularly well-suited technology for enabling more inclusive, community-owned and -distributed systems, due to unique governance and scale aspects.

The great value-add of community hydro was well-noted by other participants who expressed interest in intra-regional exposure visits to share knowledge and build awareness of micro hydro amongst ASEAN energy access practitioners and proponents – in line with HPNET’s approach to peer-to-peer exchange and knowledge exchange.

This article was developed by Ms. Lara Powell (HPNET Secretariat) with inputs from Ms. Jade Angangalo (PAMANA), Ms. Nalori Chakma (REP), Mr. Tarek Ketelsen (AMPERES), Ms. Kaneka Keo (Oxfam), and Dipti Vaghela (HPNET Secretariat).

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NEPAL CASE STUDY: TARA KHOLA MINI HYDRO PROJECT

CAMBODIA DIALOGUE: TOWARD A JUST ENERGY TRANSITION IN ASEAN

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