Two steps at a time

Meticulously planned off-grid systems of power generation face the greatest threat from haphazard extension of the grid. “The subsidy is disbursed, plants are built, and then mothballed as soon as the grid reaches,” Ratna Sansar Shrestha, water and energy policy analyst, said. Despite the long and frequent power cuts, many prefer power from the grid to the hassle and costs of maintaining off-grid power plants.

“In the end isolated off-grid systems will fail. The government should ready a clear roadmap to keep certain areas off-grid,” said Rameshwar Yadav, general manager (electrification), NEA (Nepal Electricity Authority).

Their very small scale makes it difficult for off-grid producers to partner with NEA the way electricity user groups do (See A consumer movement is born). The Electricity Act does not allow the government utility to purchase power from community-run power plants to feed into the grid, unless the community generates enough to feed at least a 33 kva substation, a condition many small systems cannot meet, Narayan Chaulagain, the head of the Alternative Energy Promotion Centre (AEPC), pointed out.

Synchronization technologies for feeding power from off-grid systems to the grid are expensive. AEPC is making some headway on this but faces opposition from NEA, mostly on technical grounds. Once connected to the grid, the quality of power becomes a critical consideration, Shrestha said. Connecting the tiny contributions of off-grid technologies (some as low as 15 kva systems) to the national grid has a very real danger of tripping the entire grid; available technologies are not mature enough to harmonize the frequency of these small disparate systems with endemic fluctuating voltages, he explained.

Experiments are on to connect the off-grid systems. The German development agency GTZ is running a pilot at Terhathum in East Nepal, on behalf of a joint task force set up by the environment and energy ministries, to synchronize a 200 kW hydro plant with the grid using a power exchange agreement. (Shrestha and Chaulagain are members of the task force.) In periods of shortfall the user group buys power from the grid; and inversely, sells power to the grid in times of excess.

An REDP pilot in Baglung in the midhills of Nepal has connected seven 10 kW to 40 kW off-grid turbines to create a mini-grid of 128 kW. The choice is clever since Baglung’s ongoing road construction offers communities the prospect of supplying power to the 50 kW stone crushers. In 2006, REDP had successfully tested synchronization of power from a 50 kW turbine to the grid at the Institute of Engineering under Tribhuvan University in Kathmandu.

Needed: a new act

Despite the community electrification bylaws, rural electrification in Nepal has progressed in a policy and legislative vacuum. “We don’t have a clear policy or targeted legislation on rural electrification,” said D P Ghimire, chair of NACEUN (National Association of Community Electricity Users-Nepal).

What could help is the Bill on Electricity, 2065 (2009), which streamlines licensing procedures, prioritizes domestic energy needs over export-oriented projects, allows power trading by private entities and unbundles NEA. The bill is under review by the parliamentary statutory committee and is expected to be tabled in the winter session 2010.

« The act sets out to reduce the void between a government agency headquartered in Singha Durbar in Kathmandu and community groups that invest in electrifying their villages, » Ghimire said.

User groups and development planners have lobbied hard for amendments that promote the interests of electricity user groups, but this is not the form in which the bill has been placed before the parliamentary statutory committee, Shrestha said.

A more ambitious amendment, which may have to wait till the current version of the bill is passed, is to replace the Community Rural Electrification Department with a Rural Electricity Development Authority (REDA) not under but parallel to NEA, reporting directly to the government. This will help streamline policy and rural electrification plans. This will create a central fund, just like AEPC’s energy fund, which attracts donor funding.

NEA cannot continue to meet grid extension demands without help from international donors. NEA made a loss of NRs 12 billion in the last year alone from theft and transmission losses, high overheads, overstaffing and low electricity demand in rural areas. The government has only recently announced a NRs 1 billion a year grant to support the community-led grid extension efforts.

REDA will channelize money, formulate policy and execute, monitor and regulate rural electrification projects in the country.

Some are pushing for changes in the NEA regulations to iron out differences between electricity user groups and the government-owned utility-for instance to clarify ownership of assets after electrification. NACEUN member groups have collectively invested close to NRs 71 crore in transmission lines, poles, transformers, meters and wiring. As of now, NEA owns the system hardware, while the user group shoulders maintenance costs.

Such regulatory changes, if approved, will align rural electrification with the decentralized spirit of cooperatives. For instance, electricity user groups will be able to offer skilled manpower or locally procured materials to bring down their cash contribution. But the push from decentralization to true devolution, at least to the district level, could affect a game changer. « Why hire a contractor from Kathmandu, » asked Ghimire.