Proceedings Report- Understanding the Demand of Renewable Energy

DIALOGUE SERIES ON RENEWABLE ENERGY SERIES I: Understanding the Demand of Renewable Energy

Proceedings Report

30 APRIL, 2019
 The Summit Hotel

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Moderator: POOJA SHARMA Head of Energy Programme, Prac8cal Ac8on Speakers: BHISHMA PANDIT Energy Specialist, Global Infrastructure and Natural Resources, AS - Power, Ligh8ng and Off-grid, Interna8onal Finance Corpora8on BHUSHAN TULADHAR Chief Technical Advisor, South Asia, UN-HABITAT HARISH AGRAWAL Managing Director, Shine Exhibits Pvt. Ltd. NARENDRA PRAJAPATI Chairman & Managing Director, Mountain Glory Forest and Spa

This discussion sought to understand the opportuni8es and challenges of using renewable energy from the users’ perspec8ve. It helped to interpret the demand of renewable energy in the regional market; whether or not the communi8es and largescale consumers such as industries in Bihar and Nepal have the tendency and poten8al to shiT to renewable energy.

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Bhishma Pandit Energy Specialist, Global Infrastructure and Natural Resources, AS - Power, LighOng and Off-grid, InternaOonal Finance CorporaOon (IFC) Bhishma Pandit, an energy specialist for the IFC, stressed upon the energy inefficiency that Nepal is experiencing. Nepal is one of the most energy inefficient countries in Asia. He believes that the primary cause of such upseVng result is mostly because of the informa8on shorWalls and the preconceived no8ons about energy industries and their prac8ces. Lack of technical knowledge amongst industrial experts in itself is considered to be a crucial problem. While it’s likely that consumers would have liYle informa8on about such issues, the same cannot be expected from the energy experts. Inaccurate informa8on communicated by the experts can trickle down in the en8re supply chain.

Stressing on the issue, he shared a real-life example whereby a retailer had no informa8on on why the same products with the same motor capaci8es had different prices. Hovering on similar discussion, he stressed on the fact that even if Nepal introduces new technologies in the near future, and if the consumers are not aware of its existence and usage, it will not lead to a meaningful change. Also, once the technology is adopted, its cost-efficient maintenance is another hassle, which is difficult to tackle.

In the context of the energy market, he believes that Nepal can have an energy market in India. Bihar’s energy need, in par8cular, is growing rapidly and they are seVng up solar panels voraciously to op8mize their energy system’s stability. Given that, Nepal can develop appropriate means of infrastructure needed for an efficient distribu8on process, the idea of selling energy to India can be a reality.

Lastly, he dwelled upon the general percep8on of stakeholders towards the energy sector, which happens to be largely affected by price and energy cost to Nepal. Consumers are focused on upfront cost rather than the opera8onal cost of genera8ng energy. Nevertheless, consumers are paying their electricity bills without realizing what they are paying for and hence, proper effort to disseminate informa8on should be proac8vely taken.

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Bhushan Tuladhar Chief Technical Advisor, South Asia, UN-HABITAT Regarded as the most popular public bus in Kathmandu, Bhushan Tuladhar proudly men8oned that Sajha Yatayat aims to translate a quote by Enrique Peñalosa, "A developed city is not one where even the poor ride cars, but rather one where even the rich use public transport" into reality. Leading the discussion towards energy sectors, he affirmed that the company uses diesel and using diesel increases the opera8ng cost of the company, while also escala8ng air pollu8on and exposing locals to carcinogens.

Despite the fact that Nepal can produce several other alterna8ve fuels, he believes that they cannot be used on a large scale as they lack reliable supply chains. To reduce the current energy cost and meet the demand for clean buses would be the biggest incen8ve to move towards clean energy. Nepal is mostly a supply driven market where energy supply is evidently boos8ng. Numbers of electric buses are assumed to be raising, making prices favorable with low opera8on and maintenance cost, and providing social and environmental benefits. Highligh8ng the issue, he stated that Sajha is aiming to have 30% of the fleet as electric by 2020 and 100% by 2025. While the plan is very ambi8ous, it is s8ll doable.

He believes that investment, infrastructure and informa8on are the three problems that we need to solve. There is a lack of upfront investment for buying electric buses and seVng up charging sta8ons.

Market cost for an electric bus is around two crores while that for a diesel bus is very low at thirty lakhs.

As a buyer, one tends to go for a cheaper price. Likewise, proper informa8on and people’s confidence about these buses should also be boosted if one is to have a sustainable choice.

Furthermore, he stressed that the residen8al sector is the biggest consumer of energy in the country that generates most of the demand for energy. To address this demand, government manufactured and approved technologies like standard electric stoves and induc8on stoves. However, the challenge was regarding the flow of informa8on about the clean energy being used and developing consumer confidence in all parts of the na8on, be it rural or urban. He underscored that the energy demand can be met by strengthening the supply chain and local government taking the lead in organizing informa8on campaigns, encouraging community engagement in the process and strengthening infrastructure.

Therefore, both private sector and government have to play a significant role in the renewable energy sector.

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Harish Agrawal Managing Director, Shine Exhibits Pvt. Ltd.

Shine Exhibits has been ligh8ng up Kathmandu for the past few years by seVng up solar bus stops, traffic police islands, solar dustbins and streetlights throughout the city. Harish Agrawal conceptualized this idea from fear – fear of what could happen to his close ones when the lights go off in public spaces– and inspira8on from some beau8ful bus stops he had seen during his 8me in Amsterdam.

Ini8ally, the company used solar panels to meet the energy demand for these bus stops as the country could not provide any other reliable sources of energy. He stated that he gets inspired to repeatedly do this work because he has seen children studying under these lights. The social impact it has created is beyond measurable and the aesthe8c addi8on to the city makes the place safer.

Currently, these works are limited within the valley since it would be quite expensive to send experts from Kathmandu to rural places for work. Nevertheless, many ci8es are being urbanized at a rapid pace where these ini8a8ves would be feasible. The installa8on of such ligh8ng infrastructures that Harish terms as “street furniture” are being inves8gated in ci8es like Biratnagar, Butwal, Dharan, Itahari and Siddharthnagar by Shine Experts.

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Narendra PrajapaO Chairman & Managing Director, Mountain Glory Forest and Spa Having worked in the hotel industry for the past twenty-five years, Narendra Prajapa8, a former CEO of Bhote Koshi Power Company, believes that there is a crucial connec8on between the hotel industry and the power sector. While he addressed that the connec8on is mostly because of the genera8on and the use of power, he also stressed on its cost to the industry. A large chunk of hotel cost is incurred because of an excessive use of light and power. Hence, ensuring the cost and sustainability of power system used in hotels need to be priori8zed in the hotel industry.

Given today’s context, hydropower is the largest source of growth in renewable consump8on.

However, we cannot ignore the fact that Nepal has the poten8al to move on to solar and other forms of renewable energy too. But because of the high cost of other energy sources, hydro is priori8zed.

Adding to that, the price discrimina8on and difference in tariff structure also creates a major setback as it favors hydro sources more than any other source-mostly because it's less costly than other sources.

On a similar note, he stressed on the fact that hotels are categorized as expensive energy users because of instances like, using solar water hea8ng system over electricity, as it increases the capital cost to 100% from 15-18%. For entrepreneurs, the issues of capital budge8ng decisions, like these, come in because of lack of policies and mechanisms addressing energy efficiency. For customers and users of hotel industry, efficiency and ‘going green’ are not a maYer of much concern as they choose comfort over concern for clean energy. However, there are segments willing to pay a premium price if a business emphasizes reliability, sustainability and availability of clean energy. That is why, the importance should be given to ensuring no trade-offs between energy efficiency and cost as these are the highest weighing elements. In addi8on to these elements, if the entrepreneurs are also given incen8ves in pricing mechanism for using clean energy, the demand for clean energy and efficient products can be increased.

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Pooja Sharma Head of Energy Programme, PracOcal AcOon Pooja Sharma, the moderator of this session, concluded by emphasizing that the shiT towards clean energy is on the right track. She highlighted that the actors in this sector have a good understanding of gender. They are working to increase women’s access to and control over resources. This sector also needs collabora8ve change campaigns and ac8ve involvement of youth.

Key Points • The consumers must be given the right incentive to move towards renewables.

• The most effective incentive is cheaper pricing, which has to be accompanied by a system that is stable and reliable.

• The government, private sector and communities to address challenges of infrastructure, investment and information in the renewable energy sector.

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Photos from the Dialogue