Dear Mahe, Lady Doak College Team and Brant,
Thank you all for your very fruitful and engaging discussions here.I today would like to share about the Renewable Energy Subsidy and Central Renewable Energy Fund (CREF) facility initiated under Ministry of Energy, Water Resources and Irrigation, Government of Nepal by Alternative Energy Promotion Centre (AEPC).
The Alternative Energy Promotion Centre (AEPC) is a Government institution established on November 03, 1996 with the main objective of developing and promoting renewable/alternative energy technologies in Nepal.
The government through APEC is providing small subsidy grants to public for develop the renewable energy sector and encourage very poor households to use renewable energy.The subsidy amount is expected to cover 40% of the total costs; with around 30% coming from credit and around 30% from private sector investment and/or community or households contribution (cash or in kind).
The small subsidy grant primarily focuses on off-grid applications and provides subsidies for mini/micro hydropower, improved water mill, solar energy (home systems, mini-grids, grid connected), biogas, biomass energy, wind energy and wind-solar hybrids. Detail of the subsidy for each technology type is provided in the Renewable Energy Subsidy Policy document. The subsidy amount differs according to technology and the region - with higher subsidy being offered for remote areas. Selected examples are:
Solar PV mini-grid:
- Generation – equip. (per kWp): NPR 175,000 to 150,000/kWp (USD 1640 to 1410).
- Distribution (per household): NPR 32,000 to 28,000/household (USD 300 to 260).
Mini/micro hydropower
- Generation – equip. (per kW): NPR 125,000 to 80,000/kWp (USD 1175 to 750).
- Generation – civil. (per kW): NPR 80,000 to 20,000/kWp (USD 300 to 190).
- Distribution (per household): NPR 35,500 to 28,000/household (USD 333 to 260).
For technologies producing electricity output, the subsidy is not only given for equipment and civil work but also, where applicable, for development and deployment of distribution infrastructures.
Subsidy will also be provided for installation of solar PV systems in grid connected areas with irregular supply. This includes subsidies for solar street lighting in urban and rural areas and for solar PV systems in households, public educational institutions, public health facilities and religious places.
However the institution has failed to attract private investment in alternative energy systems as the current installations are subsidised by almost 50%, and are heavily dependent on the government.The centre also has realised that subsidies provided by the government alone will not lead to progress on renewable energy promotion in the country. Therefore AEPC has now started providing credit to banks, and the banks now extend loans to those who want to invest in renewable technology. The recently established Central Renewable Energy Fund (CREF) is the coordinating body.
Multiple donors and government will put money to a central basket, and the CREF will then select partner banks to channel these funds in the form of credit to businesses that are willing to invest in renewable energy, but do not have enough funds.
The businesses will use these subsidised loans as seed money; when they pay back the loan to the central fund, it will then be used to encourage other such initiatives,” Multiple donors have agreed to put money into the fund and the government has announced that it will invest NPR 5 billion (USD 50 million) in the venture.
The government has stated that renewable energy is its top priority and has been trying to provide electricity to all. The current share of renewable energy sources is less than 1% of the total, and only 10% of the population receives electricity from renewables. The government has committed to increasing the share of renewables to 10% and those accessing this energy to 30% of the population by 2030.
Biggest investment is in solar energy
Giving a large boost to this initiative, the sole electricity production authority – the Nepal Electricity Authority – has also agreed to buy electricity generated from the renewable resources from any private producer at a negotiated rate to distribute through its system. Until now the NEA used to purchase power only from hydropower projects.
I hope my this information helps you all to know about Nepal initiative for clean and sustainable energy.The financial subsidy is being a great tool on promoting clean energy systems through out the country. I do not have any idea on what is going on in India and South Asia on similar kind of subsidy programme and practices for clean energy. I will be really happy to get learn about subsidy programme for clean energy in your country India and who is taking a lead for it like Federal or State Government and if states which particular states there.
Your's Sincerely,
Anish.