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Mini and Micro Hydropower Applications Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized A strategic stock-taking and developing a future roadmap stock-taking afuture A strategic anddeveloping Applications Hydropower Mini andMicro Access through ScalingUpElectricity Nepal: Mini and Micro Hydropower Applications Mini and Micro Hydropower Nepal: Scaling up Electricity Access through up ElectricityNepal: Scaling Access a b Mini and Micro Hydropower Applications Mini and Micro Hydropower Nepal: Scaling up Electricity Access through up ElectricityNepal: Scaling Access Nepal: Scaling Up Electricity Access through Mini and Micro Hydropower Applications A strategic stock-taking and developing a future roadmap ii Mini and Micro Hydropower Applications Mini and Micro Hydropower Nepal: Scaling up Electricity Access through up ElectricityNepal: Scaling Access Standard Disclaimer: The report is a product of the staff of the International Bank for Reconstruction and Development/The World Bank. The findings, interpretations, and conclusions expressed in this paper do not necessarily reflect the views of the Executive Directors of the World Bank or the governments they represent. The World Bank does not guarantee the accuracy of the data included in this work. The boundaries, colors, denominators, and other information shown on any map in this work do not imply any judgment on the part of the World Bank concerning the legal status of any territory or the endorsement or acceptance of such boundaries. Copyright Statement: The material in this publication is copyrighted. Copying and/or transmitting portions or all of this work without permission may be a violation of applicable law. The International Bank for Reconstruction and Development/ The World Bank encourages dissemination of its work and will normally grant permission to reproduce portions of the work promptly. The World Bank Group Nepal Office P.O. Box 798 Yak and Yeti Hotel Complex Durbar Marg, Kathmandu, Nepal Tel.: 4236000 Fax: 4225112 Email: [email protected] www.worldbank.org/np www.facebook.com/WorldBankNepal Designed and Printed by: Print Communication, Kathmandu Contents Abbreviations and Acronyms ----------------------------------------------------------------------------------------------------------------------vi Acknowledgements ----------------------------------------------------------------------------------------------------------------------------------ix Executive Summary ---------------------------------------------------------------------------------------------------------------------------------- x A. Background -------------------------------------------------------------------------------------------------------------------------------------- x B. Objectives and Scope of the Technical Assistance ------------------------------------------------------------------------------------xi iii C. Study Methodology ---------------------------------------------------------------------------------------------------------------------------xi D. Findings and Recommendations ---------------------------------------------------------------------------------------------------------xii E. Conclusions and way forward ------------------------------------------------------------------------------------------------------------ xvi 1. MICRO HYDROPOWER SCENARIO IN NEPAL ------------------------------------------------------------------------------ 1 1.1. Summary of Regulatory and Policy Environment -------------------------------------------------------------------------------------- 3 1.2. Efforts and Initiatives in Nepal -------------------------------------------------------------------------------------------------------------- 4 1.3. Objectives of the World Bank Technical Assistance ------------------------------------------------------------------------------------ 5 Applications Mini and Micro Hydropower Nepal: Scaling up Electricity Access through up ElectricityNepal: Scaling Access 1.4. Study Approach and Methodology ------------------------------------------------------------------------------------------------------- 5 1.5. Structure of the Report ----------------------------------------------------------------------------------------------------------------------- 6 2. AssESSING THE POLICY AND REGULATORY FRAMEWORK FOR MICRO HYDROPOWER IN NEPAL ------ 7 2.1. Micro Hydropower Policy and Regulations ---------------------------------------------------------------------------------------------- 7 2.2. Subsidy in Micro Hydropower -------------------------------------------------------------------------------------------------------------- 7 2.3. Institutional Architecture and Project Cycle ------------------------------------------------------------------------------------------- 10 2.4. Role of the NEA in the Micro Hydropower Sector ----------------------------------------------------------------------------------- 12 2.5. Analysis of Policy and Institutional Issues ---------------------------------------------------------------------------------------------- 14 3. SCALING UP POTENTIAL OF MICRO HYDROPOWER IN NEPAL ---------------------------------------------------- 16 3.1. Objectives of the Chapter ------------------------------------------------------------------------------------------------------------------ 16 3.2. Framework for Assessing Performance ------------------------------------------------------------------------------------------------- 16 3.3 Standalone MHPs ---------------------------------------------------------------------------------------------------------------------------- 17 3.4. MHP Mini-Grid -------------------------------------------------------------------------------------------------------------------------------- 41 3.5. MHP Grid Connection ----------------------------------------------------------------------------------------------------------------------- 49 4. FINDINGS, RECOMMENDATIONS AND THE WAY FORWARD ------------------------------------------------------- 67 4.1. Standalone MHP ----------------------------------------------------------------------------------------------------------------------------- 67 4.2. MHP Mini-Grid -------------------------------------------------------------------------------------------------------------------------------- 70 4.3. MHP Grid Connection ----------------------------------------------------------------------------------------------------------------------- 71 4.4 Way Forward ---------------------------------------------------------------------------------------------------------------------------------- 75 ANNEXES Annex 1: Institutions involved in the micro hydropower sector of Nepal ------------------------------------------------------------ 75 Annex 2: Details on plants visited and plant performance ------------------------------------------------------------------------------- 78 Annex 3: Details on policies and grid codes relevant to MHP --------------------------------------------------------------------------- 96 iv Annex 4: Details on financial analysis ---------------------------------------------------------------------------------------------------------- 99 Annex 5: Details on economic analysis -------------------------------------------------------------------------------------------------------110 Annex 6: Calculation of levelized unit cost for 20 kW diesel based generation and distribution ------------------------------116 Annex 7: Calculation of levelized unit cost for 42 kWp (20 kW) SPV based generation and distribution --------------------117 Annex 8: A promising mini-grid site in Phungling Bazaar, Taplejung -----------------------------------------------------------------118 Annex 9: Technical discussion on grid connection of MHPs ----------------------------------------------------------------------------121 Annex 10: International practices in grid connection of RETs --------------------------------------------------------------------------126 LIST OF FIGURES Figure 1: Map of Nepal showing MHP-national grid interface ----------------------------------------------------------------------------- 2 Mini and Micro Hydropower Applications Mini and Micro Hydropower Figure 2: Impact of subsidy on installed capacity (when compared at same base year) ----------------------------------------- 10 Nepal: Scaling up Electricity Access through up ElectricityNepal: Scaling Access Figure 3: Impact of subsidy on installed capacity with two years shift ---------------------------------------------------------------- 10 Figure 4: Average number of MHPs added each year during each subsidy period ------------------------------------------------ 10 Figure 5: Average MHP capacity added (kW/year) during each subsidy period ---------------------------------------------------- 11 Figure 6: Average plant capacity (kW) added during each subsidy period ---------------------------------------------------------- 11 Figure 7: Institutional architecture of the micro hydropower sector ------------------------------------------------------------------- 11 Figure 8: Micro hydropower project cycle flow chart -------------------------------------------------------------------------------------- 13 Figure 9: Prediction of MHP capacity (kW) that will be added till 2020 --------------------------------------------------------------- 15 Figure 10: Technical problems seen during MHP site survey ---------------------------------------------------------------------------- 18 Figure 11:
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