29 December 2013

Hydropower Policies

Water Right Issues

Since the ownership of water is vested in the State,
individuals or communities have only the right to use
water available in the country
Anyone who is willing to use water resources is required
to obtain license from the State, which regulates the
mode of use of the water resources.
Domestic use, irrigation of one's own land on an
individual basis or on a collective basis, or running water
mills is allowed without going through a process of
licensing.
Where the water has not been put to use in the past,
individuals or the community will have to go through a
process of licensing in order to avail the right to use
water resources.

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Priority on Water Uses in Nepal

(I) Drinking water and domestic uses,
(II) Irrigation,
(III) Agricultural uses such as animal husbandry
and fisheries,
(IV) Hydroelectricity,
(V) Cottage industry, industrial enterprises and
mining uses,
(VI ) Navigation,
(VII) Recreational uses, and
(VIII) Other uses.

Generation of Hydroelectricity
The Electricity Act, 1992 and Electricity Rules, 1993, govern
generation of hydroelectricity such that;
No, person or corporate body, foreign national is allowed to conduct survey,
generate, transmit and distribute electricity without the prior license under the
Act.
But license is not required for survey, transmission and distribution of the
electricity up to 1000 kW (1 MW) of power.
Individuals or organized body willing to survey, generate, transmit or distribute
electricity from 100 kW to 1000 kW should provide notice to the Secretary of
the Ministry of Energy in the Connection Disclosing the following particulars
(Rule 3 of the Electricity Rules, 1993):
"(a) Detail project report,
(b) Map of the project location (disclosing main structures of the project)
(c) Source and amount of the water to be utilized,
(d) Area of distributing electricity and number of consumers to be benefited from the
project,
(e) Description of other previous utilization by any; other persons of water resources
estimated to be utilized if any,
(f) Other necessary particulars."

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 29 December 2013

Hydro-power Development Policy

The Hydropower Development Policy of 1992 was amended in 2001
to update it based on the experience gained.
The Hydropower Development Policy, 2001 aims at propelling the
economic growth and prosperity of the country by providing
electricity at low cost and supplying to the people at reasonable
prices through the optimal utilization of the available hydropower
resources of the country.
The main objectives of the hydropower development policy could
briefly be outlined as:
- To generate electricity at low cost by utilizing water resource in the country;
- To extend reliable and quality electricity service throughout the country at an
affordable price;
- To tie up electricity with economic activities;
- To render support to the development of rural economy through rural
electrification; and
- To develop hydropower as an exportable commodity.

Hydropower Policy 2001: Main Features

Utilization of hydropower potential to meet the domestic demand;
Development of hydropower projects on competitive basis;
Involvement of private sector on Build, Operate, Own and Transfer
(BOOT) concept;
Appropriate incentive provisions and simplified and transparent
procedure to attract domestic and foreign investors;
Efforts to implement large multipurpose projects so as to maximize
the benefits to the nation including that resulting from the
downstream benefits;
Public private partnership in hydropower projects including that
tied with irrigation use;
Development of hydropower projects so as to contribute to
environmental conservation with biomass and thermal energy
substitution;

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Hydropower Policy 2001: Main Features

Appropriate provisions for appropriate resettlement and
rehabilitation of displaced people;
Mobilization of internal capital market for investment in the
hydropower sector;
Small and mini hydropower schemes for off-grid supply of
electricity to remote areas;
Establishment of Rural Electrification Fund;
Appropriate technical and legal measures for on authorized loss
prevention;
Mechanism to encourage use of electricity in water supply,
irrigation, industries, etc., during off-peak hours;
Appropriate provision for providing benefits to people of areas,
where hydropower projects are located;
Proper provisions to cover risks in hydropower projects;
Encouragement to export oriented projects;; etc.

Hydropower Policy 2001: Main Features

Restructuring of existing public sector institution to enhance
competition and enhanced involvement of local bodies,
cooperatives and private sector in generation, transmission and
distribution for reliable and quality electricity at reasonable price;
Protection of consumers interest by providing reliable and
qualitative electricity service;
Rational and transparent mechanism for fixation of electricity
tariff;
Priority of domestic labour and skill use;
Establishment of a hydropower development institute for
imparting training and conducting research activities
Encouraged consumers for demand side management to enhance
energy conservation.

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Micro/Mini Hydro Classification: Nepal's Context

Pico-hydro Usually, provides power for lighting in few
Peltric Set household close to Powerhouse.
(From few hundred
watts and upto 5 Improved Usually, provides mechanical power for agro-
kW) (for subsidy upto Ghatta processing in the power house.
10 kW purpose)
Usually provides mechanical power to run agro-
Water Mill processing and other machinery within the
Micro-hydro powerhouse premises.
(Above 5 kW and
Add-on Basically installed for Watermill, where a
upto 100 kW)
Plant Generator is added to provide power for a small
(for subsidy purpose
community for electrification
10 -100 kW)
Isolated Usually, provides power for a small community
for electrification and cottage industries in
Plant remote areas away from the grid
Mini-hydro
Isolated Usually, provides power either for a bigger
(Above 100 kW community and local industries or more often
Plant feeding into a mini-grid and or to the national
and upto 1000 kW
(1 MW)) grid

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Subsidy Policy for Renewable Energy

(Source: GoN, Ministry of Science and Environment
"Subsidy Policy for Renewable Energy, 2069 BS")

Subsidy for Mini Hydro Projects

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Subsidy for Micro and Pico Hydro Projects

Subsidy for Improve Water Mill

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Subsidy for Rehabilitation Projects/ Additional

Subsidy Categories

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Subsidy Categories ....contd.