Power and People : The Benefits of Renewable Energy in Nepal

This report is an output of the technical assistance activity carried out over 2008-2010 to Alternative Energy Promotion Center (AEPC), which is the nodal renewable energy agency of Nepal. This study has been designed to establish a monitoring system for AEPC to continually measure the results of the renewable energy programs against the targets and to organize an evaluation system that measures the impact of micro-hydro installations on rural livelihoods. Given AEPC’s highly visible role, the need to develop a system that provides information on a wide range of technical, operational, and financial parameters is similarly high. This study developed a robust yet simple M and E framework for all the programs of AEPC that is focused on the needs of the decision-makers, as well as the interests of the relevant stakeholders. The integrated M and E system encompasses all of AEPC’s programs in micro-hydro, solar, biomass, improved water mills, and biogas, and builds its capacity to execute it. The focus has been to develop performance indicators across the entire causal chain from project intervention to on-the-ground impacts. The M and E framework incorporates not only the activities undertaken and the outputs but also the impact on the beneficiaries which is critical to gain a better perspective of the impact of the interventions and to support future planning processes and decision-making. The final impacts of electrification on households and businesses are evaluated using a primary household and enterprise survey. A wide range of outcomes including quality of lighting, income generation, health, education, fertility, women’s empowerment, and greenhouse gas emissions reduction are considered. AEPC is now equipped with not only the state-of-the-art monitoring system but also with a trained staff to sustainably manage and add to the system, as required. 1 A Long Road To Expanding Rural Access 1 -- What Is The Policy Framework And Institutional Structure For Rural Energy? 3 -- What Are The Program Areas Of Aepc? 5 -- 2 Objectives And Methodology Of A Monitoring Framework Design For Renewable Energy 9 -- Why Is Monitoring Important For Aepc? 10 -- How Was The Monitoring And Evaluation (m&e) Framework Developed? 11 -- What Are The Attributes Of The Monitoring And Evaluation Framework? 11 -- 3 Coverage And Attributes Of Micro-hydro For Households And Enterprises 15 -- What Is The Pattern Of Rural Households' Energy Use? 15 -- What Is The Pattern Of Rural Households' Energy Consumption? 19 -- How Much Do Rural Households Spend On Energy? 20 -- What Is The Volume Of Rural Households' Mh Use? 22 -- What Is The Level Of Quality Of Service Among Mh Households? 25 -- What Are The Factors Determining Mh Connectivity? 27 -- What Is The Mh Connectivity Among Rural Enterprises? 28 -- How Much Is The Mh And Non-mh Enterprise Energy Consumption? 29 -- How Do Mh Enterprises Cope With Power Outages? 32 -- 4 Benefits Of Electrification To Rural Households 35 -- How Do The Households Benefit From Mh Connectivity? 35 -- Consumer Surplus 36 -- Econometric Estimates 39 -- Economic Outcomes 40 -- Educational Outcomes 41 -- Health Outcomes 43 -- Women's Fertility Outcomes 45 -- Women's Empowerment Outcomes 46 -- Mh And Climate Change 48 -- Net Benefits From Mh Electrification 49 -- 5 Implementation Of The Management Information System (mis) 51 -- Why Does Aepc Need An Enhanced Mis? 59 -- What Are The Objectives Of The Mis? 59 -- What Are The Attributes Of The Mis? 60 -- How Will The Reporting On Indicators Be Presented? 67 -- What Are The Institutional Roles And Responsibilities For The Mis? 70 -- What Are The Risks And Essential Requirements? 73 -- 6 Action Plan And Way Forward For Aepc 75 -- What Are The Vision And Mission Of The Aepc? 75 -- What Are The Targets Facing Aepc? 77 -- What Are The Actions Aepc Can Pursue To Achieve Its Goals? 80 -- Action Item 1: Prioritize The Development Of Renewable Technologies 80 -- Action Item 2: Conduct Preparatory Work For Aepc For Grid-connected Renewable Energy Promotion 82 -- Action Item 3: Formulate An Enabling Policy For Investment In Renewable Energy 83 -- Action Item 4: Focus On Manpower Planning And Organizational Structure 86 -- Action Item 5: Expand The Sources Of Funds 90 -- Action Item 6: Have Aepc Act As A Concessional Financier 93. Sudeshna Ghosh Banerjee, Avjeet Singh, Hussain Samad. June 2010. Includes Bibliographical References.

A large section of the Nepalese population is deprived of electricity coverage despite huge hydropower potential, particularly in rural areas. About 63 percent of Nepalese households lack access to electricity and depend on oil-based or renewable energy alternatives. The disparity in access is stark, with almost 90 percent of the urban population connected, but less than 30 percent of the rural population. Nepal has about 83,000 MW of economically exploitable resources, but only 650 MW have been developed so far. This study has been designated to organize an evaluation system that measures the impact of micro-hydro installations on rural livelihoods and to establish a monitoring system for Alternative Energy Promotion Center (APEC) to continually measure the results of the results of the renewable energy programs against the targets.

Contents Acronyms and Abbreviations Acknowledgments Executive Summary Figures Tables 1. A Long Road to Expanding Rural Access 2. Objectives and Methodology of a Monitoring Framework Design for Renewable Energy 3. Coverage and Attributes of Micro-Hydro for Households and Enterprises 4. Benefits of Electrification to Rural Households Boxes 5. Implementation of the Management Information System (MIS) 6. Action Plan and Way Forward for AEPC References Annexes