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Market Mapping Study for Biogas Companies”

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FINAL REPORT ON “MARKET MAPPING STUDY FOR BIOGAS COMPANIES” Submitted to: Submitted by: Alternative Energy Promotion Center (AEPC) Sustainable Energy and Technology National Rural and Renewable Energy Management (SETM) Programme (NRREP) Kamaladi, Kathmandu PO Box: 14364, Khumaltar Height Lalitpur Nepal Phone: +9771-5539390/5536843 Phone: +9771-4412078 Fax: 5539392 Email: [email protected] Website: www.aepc.gov.np PO Box No: 7039 NOVEMBER, 2013 Market Mapping study for Biogas Companies Final Report PREFACE AND ACKNOWLEDGEMENT Sustainable Energy Technology and Management (SETM) express our sincere gratitude to Alternative Energy Promotion Center (AEPC)/NRREP for entrusting us to conduct the study on Market Mapping for Biogas Companies. SETM would also like to express our genuine acknowledgement to Prof. Dr. Govind Raj Pokharel, Executive Director of AEPC. Our special thanks and appreciation goes to Mr. Samir Thapa, Assistant Director of AEPC and Mr.Uttam Jha, National Advisor of NRREP, Suraj Regmi, Programme Officer of NRREP, Mr. Lava Thapa, Assistant Programme Officer of AEPC and other staff for their kind cooperation and valuable input. We would also like to acknowledge with thanks the co-operation and valuable input received from all the related Biogas Companies, DDC/DEEU/S, NBPA regional offices and local banks and micro finance institutes. This study is an outcome of numerous interactions with large number of professionals and individuals. All the surveyed Biogas User and Non User and key informants are highly acknowledged for their sincere responses and feedbacks. Without their valuable support and cooperation, the study could not have come to a logical conclusion. Last but not the least, SETM highly acknowledges and appreciates the untiring efforts of the Team Leader Govinda Prasad Devkota, Mr. Bibek Kanta Neupane, Mr. Hari Poudel and all members of the study team for their hard work in accomplishing this assignment. Sharada Shrestha Managing Director, Sustainable Energy Technology and Management (SETM) Kamaladi, Kathmandu i Market Mapping study for Biogas Companies Final Report ACRONYMS AND ABBREVIATIONS AEPC Alternative Energy Promotion Centre BSP/N Biogas Sector Partnership Nepal DDC District Development Committee DEES District Energy and Environment Section DEEU District Energy and Environment Unit FMI Micro Finance Institutes GoN Government of Nepal HHs Households NBPA Nepal Biogas Promotion Association NGO Non Governmental Organization NTNC National Trust for Nature Conservation NRREP National Rural and Renewable Energy Programme RE Renewable Energy SETM Sustainable Energy and Technology Management SGBP Sahari Gharelu Biogas Plant VDC Village Development Committee ii Market Mapping study for Biogas Companies Final Report EXECUTIVE SUMMARY Background 1. The main objective of this study was to conduct a broad frame market study on the scope of biogas with an analysis on constructed plants versus demands and potentialities for further dissemination of biogas technologies. The study was based primarily on nine districts and with the help of secondary data it has forecasted the demands and potentialities on all the 75 districts of Nepal. It has gathered all the necessary details on the district wise coverage indicating the proper promotional strategy and need assessment of biogas companies according to the probability of biogas development. 2. AEPC has been promoting Biogas and other Renewable Energy Technologies in Nepal. To make the biogas technology affordable, AEPC has been providing technical and investment supports. The subsidy is provided as per the GoN's renewable energy policy and channelized through the pre-qualified biogas companies. The technical supports including quality assurance and monitoring activities are supported by National Service Providers such as BSP-N. Supply of equipments, installation and construction of biogas plants are done by the pre- qualified Biogas Companies. AEPC also selects the national, regional and local partners to implement the programme. So far, more than 290,510 domestic biogas plants have been installed in over the country. Field Study 3. Sampling of nine districts (two VDCs from each district); Doti (Pachnali and Kapalleki), Kanchanpur (Suda, Shankarpur), Dailekh (Bhawani, Bindyabasini), Kapilbastu (Banganga, Bisanpur), Baglung (Singana, Tityang), Sarlahi (Hariwan, Lalbandi), Dolakha (Jiri, Sunakhani), Saptari (Dharampur, Bakdawa) and Panchthar (Amarpur, Bharapa) were selected on ecological base such as representation of Hills and Terai as well as socio cultural representation. 4. Janajati and Brahmin/Chhetri communities are potential customers for biogas companies. As shown in the result; but Madeshi community is still so far from biogas program. They had less awareness and information regarding the biogas technology and its benefits. Biogas technology is popular among the middle class family. Biogas technology is popular among the middle class family (89%) followed by poor communities (11%) have access to biogas plants whereas high class families either use LPG or Electricity for cooking their foods. 5. Promotional materials has played crucial role to strengthen market for biogas companies. Among the respondents 56% (Dailekh, Baglung, Panchthar, Doti and Kanchanpur districts) said they have used such promotional measures whereas 44% responded there is no practice of promotional materials(Saptari, Sarlahi, Dolakha and Kapilbastu districts). The main promotional procedures are printed materials like pamphlet, brochures, calenders etc. Very few companies are using video documentary, FM radio, social medias for promotional activities. 6. Bio-slurry is a major by-product of biogas process within a biogas digester when the feed materials are digested and come up from the outlet. Three types of slurry application have been recognized as: i) slurry as it is; ii) slurry in the form of compost and iii) slurry after drying. A query related to trend of using slurry manure; they responded the use of slurry in majority is highest in type of “making compost” iii Market Mapping study for Biogas Companies Final Report (Saptari, Sarlahi, Dolakha, Baglung, Pachthar and Kapilbastu district) which is followed by the use of slurry after drying(Dailekh, Doti and Kanchanpur). 7. The survey illustrated that subsidy has been an important and widespread tool in increasing demand of biogas in different geological locations. Almost all companies said that; with current increased subsidy there is high demand of biogas plants these days. Interaction with stakeholders 8. NBPA regional offices agreed on the need of capacity development of biogas companies so that supply side can be ensured. There is need of more promotional activities along with orientation trainings to the potential customers. Also the skilled human resources and well managed company or their branches to be established. Hilly districts and southern belts of Terai have good potentiality of biogas development. 9. Biogas users received the subsidy in the form of materials and construction. The sources of cash contribution at users’ level are a very mixture nature. However, they have significant contribution either in form of labor works or cash. Loan from micro- finance/financing institutions and additional subsidy are also encouraging to invest for biogas development in rural parts. 10. MFIs are providing loans directly to the farmers or through biogas companies as well. Likewise, AEPC had distributed loan through Biogas Credit Fund to MFIs. MFIs are also playing the significant roles in promotion of domestic biogas plants in Nepal. Study team has also interviewed few MFIs personnel to identify the scope of MFIs in biogas sector. As said those people who are able to opt for loan and also can pay back their potential customers. 11. Finance, cattle number, need and willingness are the major factors influenced the buying of the customers. For Hill, the maximum cost for installation was Rs. 70,000; minimum cost for installation was Rs. 36,700 and the average cost Rs. 47,090. Similarly, the maximum cost for installation was Rs. 65,000; minimum cost for installation was Rs. 25, 000 and the average cost Rs. 47085 in Terai. These values also include the subsidy amount. Market Mapping 12. The aim of the programme is to have large numbers of customers in rural areas using biogas technology and enjoying its benefits. A market oriented approach places the customer at the core of the programme. All of the programme activities are oriented towards ensuring they have a high quality plant at a price they can afford. 13. The quality control mechanism is one of the keys to this. Quality control does not only apply to the need for technical quality, although this is an essential part of the way the programme is run. The quality of the marketing of the technology is also important. The sales people from the installation companies need to relate effectively to the customers and help them to make the decisions that will ensure they have plants that meet their expectations. 14. District wise total biogas production potential has been calculated with the help of national database on the number of households; available human population along iv Market Mapping study for Biogas Companies Final Report with cattle population within each district. As the district level databases on each household level was not available for the deliberation thus average figures were used for further forecast of technical potentiality. Based on the potentiality of the biogas in
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