Amrit Man Nakarmi Professor & Coordinator Energy Systems Planning and Analysis Center for Energy Studies, IOE/TU ADAPT - Nepal 15 October 2014

Transcription

1 Low Carbon Economic Development Strategy of Nepal and energy/ghg emission scenarios of Residential Sector in Kathmandu Valley, Nepal (National Workshop on Eco efficient Water Infrastructure for Sustainable Development in Nepal, October 2014) Amrit Man Nakarmi Professor & Coordinator Energy Systems Planning and Analysis Center for Energy Studies, IOE/TU ADAPT - Nepal 15 October 2014

2 Main Outline Overview of energy sector Use of petroleum products in generating electricity Economic impacts of growing dependence on fossil fuels Nation s avoidable costs and benefits Levelized electricity costs of captive gensets Future energy/ghg scenarios of the country and the Kathmandu Valley Nepal Some major strategies for low carbon economic development 2

3 OVERVIEW OF ENERGY SECTOR 3

4 Current Energy Overview Fuel Mix Petro-product 9% Coal 3% Biomass 85% Mod Renewables 1% Total Energy Consumption in 2010: 410,000 TJ I TJ = toe (MOF, 2012; WECS, 2010) Grid Elec 2% 4

5 Current Energy Overview Sectoral Consumption Transport 6% Industrial 5% Residential 87% Agriculture 1% Commercial 1% Total Energy Consumption in 2010: 410,000 TJ I TJ = toe (MOF, 2012; WECS, 2010) 5

6 Per Capita Electricity Consumption in ,000 3,500 3,000 2,500 3,475 Norway: 23,656 kwh/capita kwh 2,000 1,500 1, China India Pakistan Sri Lanka Bangladesh Nepal Asian Aver Key World Energy Statistics, IEA,

7 HDI and per capita electricity consumption (ADB, 2007) 2,000 KWh per capita is needed to achieve HDI of 0.8. Nepal is currently at HDI of

8 NEA, Energy systems analysis Power capacity development: historical trend 8

9 Energy systems analysis Sales of Petroleum Products from 1994 to

10 Imports of Captive Generating sets (MW) Calculations based on TPC statistics,

11 Petroleum Products Imports in monetary terms ( ) 120 NR billion Average annual growth rate 20% Import cost: 6% of GDP NOC, 2014

12 Use of petroleum products for electricity generation Use of Petroproducts 17% Use of diesel in Kathmandu * 60% * : From total diesel consumption in Kathmandu (Clean Energy Nepal, 2013) 12

13 Historical trend of Petro Imports vs. Exports 160% 152% * 140% 133% 131% 120% 100% 107% 80% 78% 60% 40% 20% 24% 32% 41% 42% 50% 49% 0% * : Expected in 2014 (Source: MOF, 2014; NOC, 2014)

14 Crude Oil Price in future 14 WEO, 2008, IEA

15 Household Fuel Economics Cooking on electricity has become the cheapest recently for an urban household even with the hike of 20% in the electricity tariff in July To completely substitute the LPG imports in Nepal requires 850 MW extra thus saving imports by NR 25 billion annually (2014). Econ.cost: NR1,430 Year Kerosene LPG Electricity ,760 1,030 1,012 Monthly Life Cycle Cost of Cooking in an Urban Household NR 9.50/unit 15

16 Can we sustain this kind of trend? LPG in remote villages From firewood to LPG 16

17 Historical Growth in LPG imports 250, ,000 MT 150, ,000 CAGR of LPG imports: 17%; Doubling every 5 years 50,

18 Nation s Avoidable import costs (2014) Petro products for electricity* 20 Billion NR LPG imports 25 Billion NR *: Expected in 2014 Based on NOC data,

19 Individual Levelized Electricity Cost (LEC) NRs/kWh at Durbar Marg Nanglo Bakery KFC Delicatessen Wimpy Hot Bread Smol Lounge Tehzeeb Saino Lakhey Vintage Restaurant & Bar Moti Mahal Beijing Friendship Klassic Bentley Eighteen Big Apple Tin Tin Benetton Kasthamandap Samsung Plaza Sherpa Mall President Travel Kingfisher Reebok Electricity costs: NR to 58.30/unit (Neupane et al, CES/IOE, 2011)

20 Electricity cost at Thamel, 2012 Electricity costs: NR 29 to 80/unit (Bhandari et al., CES/IOE, 2012) 20

21 Comparison Assumed installed capacity DG sets 700 MW Needed Hydropower plant to replace DG sets 180 MW Hydropower cost* 26 Billion NR Payback period More than 1 year 20 year fuel import savings 400 Billion NR *: Based on US$ 1,600/kW 21

22 Scenario Analysis Framework Base Year 2010 Social Data Economic Data Technological Data MAED Useful Energy Demand Agricultural Sector Commercial Sector Industrial Sector Residential Sector Transport Sector Energy Resources Process Technologies Conversion Technologies Development policies ANSWER MARKAL End-use demand technologies Constraints 22

23 Economic Growth/demographic Scenarios Low Economic Growth 4.4% GDP Growth Medium Economic Growth 5.6% GDP Growth High Economic Growth 6.5% GDP Growth DC Economic Growth 9.2% GDP Growth 23 Population growth : 1.4%

24 Policy Scenario Analysis Agriculture -Electrification Commercial -Electrification -Efficient Technology Industrial -Electrification -Efficiency Improvement Residential -Electrification -Efficiency Improvement Transportation -Mass Transportation -Electrification -Biofuels 24

25 Per capita Electricity consumption kwh per capita LOW MED (BAU) HIGH COMB Policy Intervention (LESO) DC* (HIG) DCI*(LEHI) : GDP growth as per approach paper for graduation from LDC to DC by 2022, NPC. DCI: scenario with GDP growth rate at 9.2% (CAGR) with policy intervention 25

26 Power Plant requirement MW LOW 1,272 1,496 3,868 MED (BAU) 1,272 1,975 4,131 HIGH 1,272 2,015 4,472 COMB (LESO) 1,272 4,061 11,537 DC* (HIG) 1,272 2,051 5,605 DCI* (LEHI) 1,272 4,325 17,726 * : GDP growth as per approach paper for graduation from LDC to DC by 2022, NPC. 26

27 million tons GHG emissions BAU LESO HIG LEHI Reduction BAU LESO % HIG LEHI % 27

28 Investment Analysis Total Technology Cost (million NRs) (2005 Constant Prices) BAU 35,299 26,418 30,838 Capital investment on % of GDP 5.00% 2.50% 1.60% LESO 52,849 55,550 92,732 Capital investment on % of GDP 6.70% 5.30% 5.00% HIG 33,460 26,120 42,829 Capital investment on % of GDP 4% 2% 2% LEHI 50,961 56, ,384 Capital investment on % of GDP 6% 5% 5% 28

29 ENERGY AND GHG EMISSION SCENARIOS OF RESIDENTIAL SECTOR OF KATHMANDU VALLEY, NEPAL ( RAJBHANDARI, U. AND NAKARMI, A. M., 2014) 29

30 Kathmandu Valley Major urban center of Nepal 9% of total population (CBS, 2012) Fastest Growing urban agglomerate in South Asia [AGR 4.35%] (Muzzini & Aparicio, 2013) Major user of commercial energy resources (WECS, 2010) 30

31 Energy Consumption (Kathmandu Valley- 2013) 7500 TJ Year 2013/14 (Calculation from sample survey conducted in 2013) 31

32 Energy Consumption (Kathmandu Valley- 2013) 7500 TJ Year 2013/14 (Calculation from sample survey conducted in 2013) 32

33 Scenarios BAU AEL MFA GCP CCP Business As Usual - Follows current trend of technological shares All Electrification - Total Electrification in all major enduse Modern Fuel Access - Access to modern fuels replacing conventional GHG Cap - GHG Emission in future no more than of base year Carbon Cap - CO2 Emission in future no more than of base year 33

34 Final Energy Demand 34

35 GHG Emission 35

36 Strategy for materializing the low carbon economic development strategy Electrification and Energy Access Develop hydropower plants (both RoR and Storage) to meet the enhanced demand Access to modern energy resources - electricity Promote electricity operated small appliances, machines, in selected possible sectoral end-uses. 36

37 Strategy for materializing the low carbon economic development strategy Energy Efficiency Efficiently utilize of available biomass resources Promote the use of modern bio-energy generation Substitute the present unsustainable use of TE with modern, renewable, indigenous energy sources Promote efficient electric technologies to substitute less efficient and high GHG emitting technologies Renewable Energy Create awareness about RET; Formulation of appropriate legislative tools Expand appropriate RET installations at every level Ensure implementation and monitoring of RET plans and policies. Uplift national economy through grid connection. 37

38 THANK YOU!!! 38