Nepal’s planners have always faced an uphill task in ensuring energy self-sufficiency. The main issues in the past have been politics, the absence of a strategic vision, and policies that forced the country to suffer chronic power cuts. But the country has a new beginning with a new government that has promised political stability and economic prosperity.
The other challenge is an engineering one. Nepal may have one of the highest per capita hydropower potential, but most of the total 1044MW capacity today comes from run-of-river plants which depend on the water flow to turn turbines, and not from reservoirs that can store monsoon water for the dry season.
This means the country suffers from shortfalls in production during winter when peak demand is highest. There are also the daily peaks in the mornings and evenings that need to be covered by Nepal’s only storage dam, the 92MW Kulekhani cascade. Currently, Nepal meets nearly all its peak demand by importing coal-fired electricity from India.
Peak load demand is traditionally met with electricity from hydropower reservoirs or power plants burning fossil fuels. But as countries try to meet carbon emission targets, there is pressure to adopt solar and other renewable energy sources to meet gap.
This is precisely what the Dolma Himalayan Climate Fund (DHCF) is trying to do with its proposal to generate 150MW of solar power and store 20MW of it in battery systems to meet Nepal’s seasonal and daily peaks.
Called Peak Energy Management (PEMa) System, the first phase of the project got approval from the Investment Board Nepal (IBN) last week to ‘time-shift’ daytime solar generated power to help meet evening peak demand, and also store surplus hydroelectricity generated during the night to partially meet the morning peak demand.
Such generation and storage of solar power would have been prohibitively expensive till even two years ago. But the cost of storing energy in batteries dropped to less than $200/kWh from $1,200/kWh ten years ago. The price of photovoltaic cells have similarly plummeted to only $60/MWh compared to $400/MWh in 2008.
The other advantage is that a project of this scale can be up and running within two years compared to the decade that it will take for Nepal’s next big reservoir projects like Budi Gandaki and Tanahu. Solar is also much more ecologically benign. There is a neat fit: Nepal’s peak demand is in winter when solar generation is highest because of cloudless skies.
“We are not trying to replace hydro with solar, we just want a flexible and reliable system to meet peak demand by complementing hydropower,” explains Mike Winkel, Director of the Dolma Himalayan Climate Fund, an offshoot of the Dolma Impact Fund, the first international private equity fund for Nepal which has investments in the hydropower, technology, agriculture and health sectors.
