Renewable Energy in Less-Developed Economies:Roles and Potentials

Increasing the renewable energy share in national energy mix remains one of the major energy policy goals across many economies. This paper assesses the roles and potentials of renewable energy sources in less-developed economies while citing Nepal as an example. Renewable energy has a significant role to play in the electrification of rural areas in developing economies and contribute towards sustainable development. Realizing full potentials of renewable, however, requires addressing both the associated demand-side and supply–side constraints. Innovative subsidies and tax incentives, adequate entrepreneurial support, strengthening institutional arrangement and promoting local community-based organizations such as the cooperatives are the necessary factors in promoting the green technologies in countries like Nepal. International factors such as large scale investment and adequate technology transfer are equally crucial to create a rapid spread and increase affordability of decentralised renewable energy technologies in less-developed economies.

Keywords: renewable, electrification, research and development

JEL – Codes: Q42; Q01; O33

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http://mpra.ub.uni-muenchen.de/31878/

Globalising Electrification

Jimmy Carter once said that ‘globalisation is a policy and not an act of god’. Assuming his witticism holds true; the benefit of globalisation should largely accrue to those with the ability to implement timely and problems-focussed policy making in the economy. The electricity sector remains no exception to it either. Increasing cross–border flow of electricity and the creation of regional energy trading blocs has been one of the hallmarks of modern globalizing economy. Those who joined the bangwagon have largely gained in terms of competitive power prices, increased security of supply and overall socio-economic development as evidenced from several European, Latin American and Asian countries like Bhutan. If so, are we letting yet another opportunity pass by?
The inability of Nepal to develop its own hydro resources as anticipated and the subsequent problems facing the power sector is well-known among the masses. Most notably, around 88% of the national energy demand is met through traditional sources explaining limited opportunities for rural development coupled with environmental degradation. Per capita electricity consumption remains one of the lowest at 89 KWh due to supply limitations under rising electricity demand. The need to expand access to reliable electricity in affordable manner remains the prime challenge.
To read the rest of the article published in 'The Kathmandu Post'; please follow the link below:
http://www.ekantipur.com/2011/06/28/oped/electric-trade/336419.html

Reforms in Small Power Systems

How can we effectively reform a small electricity system like Nepal experiencing twin problems of political volatility and increasing power demand under capacity shortage? Our recently published policy paper titled ‘’Reforming Small Electricity Systems under Political Instability: The Case of Nepal’’ at the Electricity Policy Research Group(EPRG), University of Cambridge analyses the issues and options surrounding the Nepalese electricity sector and provides appropriate policy recommendations.
We suggest a piece-meal approach of reform considering the resource constraints and recommend a two-staged reform process based on the lessons learnt fr0m other electricity systems in the world. In the short and medium term, focus should be towards tariff and subsidies restructuring and creating an effective independent regulatory body. Economic theory also suggests that cost-reflective prices is desirable as it leads to net social welfare gains although assessing the distributional impacts of tariff adjustment is a complicated task. A two part tariff design where a fixed payment is added to the system marginal income (such as capacity payments) can ensure the sustainability of the system as widely practised in most Latin American countries.
To follow the rest of the article, please follow the link below:
http://www.ekantipur.com/the-kathmandu-post/2011/04/14/oped/marketing-electricity/220603.html

Energy Emergency in Nepal

The declaration of ‘a state of energy emergency’ by the energy Ministry was utterly unsurprising to read about. Yes, energy emergency is an alternative expression to indicate a deepening energy crisis and the ministry rightly expressed so. Energy emergency is also an urge for meaningful policy urgency. As history repeats agahttp://www.blogger.com/img/blank.gifin, the newly formed government also did not delay on the opportunities to sketch the future course of the Nepalese energy sector. While some of the earlier policies are now declared to be discontinued and stalled, more new policies are designed in a bid to mitigate the crisis under political uncertainty. I believe that the new policies formulated are logical and indeed reflects the plight of the sector and the subsequent hope of the nation it carries upon.
To read the rest of the article published in The Kathmandu Post, please click on the link below
http://www.ekantipur.com/the-kathmandu-post/2011/04/02/oped/divide-and-grow/220155.html

Lessons Learnt

We have devoted a vast amount of scarce economic resources to reform our electricity sector over the years. Yet, the reform process can be dubbed ineffective while the empirical evidence of reforms has departed from the anticipated underlying motives. So, have we ever wondered upon what it takes to successfully reform the power sector in a developing country? In a recent paper titled “Reforming the Power Sector in Transition: Do Institutions Matter” published as University of Cambridge Working Papers in Economics, we have emperically formulated relevant policy recommendations for an effective electricty sector reform. Although the study focusses on ‘transition economies’ (TECs hereafter); the lessons learnt can certainly be tranferred to other developing countries like Nepal as economic transition is an ongoing process.
The rest of the article published in 'The Kathmnadu Post' can be followed via the link here: http://www.ekantipur.com/the-kathmandu-post/2011/03/09/oped/power-links/219264.html

Hope Looms

It is certainly a relief to know that Kasturi Trade Link and Hydro Air are planning to initiate a project to generate electricity from valley’s garbage within two years amidst the on-going energy crisis. Although the generation capacity is limited to 3 MW in the early phases of production; the consequences are far reaching than just the scale of production in my view. According to my first view, the switch towards alternative energy sources is indeed essential given our excess reliance in hydro coupled with a poor track record in developing hydropower projects as anticipated. My second line of thought states that people will now no longer perceive garbage as just a ‘waste’ but instead a resource with immense value attached.
Generating energy from waste can be an alternative source of renewable energy in the country with some potential to mitigate the ongoing power crisis. The success will depend upon the importance attached to such technology in the national and municipal policy framework. We have to ensure that we are eventually burning waste to produce energy and not burning money instead.
To read the rest of the article published in 'The Kathmandu Post', please follow the link here: http://www.ekantipur.com/the-kathmandu-post/2011/02/19/editorial/waste-not-want-not/218613.html

Policies Without Directions

The establishment of the Ministry of Energy as a separate ministerial entity also installed high hopes across the nation. The country believed that the energy sector deadlocks would eventually get a proper impasse with a distinct energy ministry in place. While the customers hopes have gained greater heights in recent times; the sectoral deadlocks is deepening with no immediate signs of easing up. Given the importance of the energy sector for a country experiencing a systemic change; the logic of such segregation is vindicated on the grounds that the acute energy concerns can receive the much-needed priorities. Unfortunately, the practice is no longer in harmony with the theory prompting me to raise two major questions here. Firstly, is the current sectoral performance an improvement from the previous performances under an integrated energy ministry? Secondly, are the taxpayers funding the energy ministry largely benefitting from the service that is being currently rendered to them? The answers are certainly not pleasing as I have been arguing in my previous articles which justify an analysis into this issue.
To read the rest of the article published in The Kathmandu Post, please follow the link:http://www.ekantipur.com/the-kathmandu-post/2011/02/02/oped/out-of-energy/217981.html