Description

“Study and Analysis of Optimal Distributed Generation for Access to Grid Electricity for All in Five Years with Participation from Local-level Government” was the first project of this company. It was commissioned by National Planning Commission. This project studies the optimal Distributed Generation (DG) development in tandem with an optimized Transmission and Distribution (T&D) network extension pathway to provide access to electricity in all 753 municipalities of Nepal. The United Nations (UN) led Sustainable Energy for All (SE4ALL) initiative seeks to ensure such universal access to modern energy services and a similar Sustainable Development Goal 7 (SDG7) seeks to ensure access to affordable, reliable, sustainable and modern energy for everyone by 2030. In a similar spirit and approach, Sustainable Distributed Generation and Grid Access to All (SUDIGGAA) can be viewed as the path towards achieving SE4ALL and SDG7.

Energy services are critical ingredients of socioeconomic development. By identifying the best source of energy available locally considering the local population distribution and means of production, it also ensures participation of the local government decision making. While the identified generation project needs to be within an economic distance from the designated location for an interconnecting substation, it also provides the vector for Grid Expansion from the local end. From a preliminary examination of the renewable energy resources available for electricity generation in the municipalities, it is evident that most of them have one or more renewable sources such as mini-hydro, solar, wind, or biomass available for development within their area, provided that the grid is available to balance the power by exporting the surplus and importing the deficit energy.

The concept of Distributed Generation (DG) in each municipality advocates the Bottom Up approach of Grid-expansion planning. T&D network extension, which entails development of T&D lines, hubs, and substations to reach the Geographic and Demographic Centre (GDC) of Municipalities, alongside the development of DG projects, can decrease T&D losses and increase the reliability of the power system. DG development can be integrated with the Top-Down approach of T&D network extension from existing reaches of national grid to all the DG sources. This combination of Top-Down and Bottom-Up approaches will enable the expanding network to reach to all the municipalities of Nepal as well as provide the local means of income through Distributed Generation while comparatively reducing the demand on the central grid to completely supply all these areas.

GoN can deliver large economic benefits to the local population as well as kick-start the local economy by expanding the T&D network up to the geo-demographic center of each municipality. This extension works, although capital intensive, will also increase the sustainability of Distributed Generation (DG) plants that can be installed in each local municipality. By appropriately subsidizing the development of Distributed Generation (DG) resources, GoN can make it attractive for investment by local bodies and cooperatives which are eligible for government grant. The central grid can enable higher level of power and energy consumption by the local economy, which could qualify as the highest level of household electricity access according to the Multi-tier Framework (MTF).

The GDC locates the point within a Municipality that is the best location to build a Substation to service all people within the Municipality cost-effectively. This concept of Sustainable Distributed Generation and Grid Access to All can act as a guiding principle for local governments to optimally utilize subsidies and scarce resources. SUDIGGAA has the potential to be a catalyst to carry out electrification in all municipalities and economically exploit the local energy resources. SUDIGGAA has many other benefits. Hydropower DG plants can reduce Capital and Operational expenditure of Transmission and Distribution networks. Solar PV plants provide reactive support to the grid and decrease reactive losses. They can service local loads and further reduce transmission losses of the grid. Additionally, Solar energy provides the energy mix in the national grid which increases energy security while providing complementarity to seasonal variation of hydro-power generation. DG development and T&D extension can have ripple economic effect through forward and backward economic linkages.

With this in mind, the overall objectives of this study were to:

• Find small-scale renewable sources of electricity generation in all the 753 municipalities that can be developed and operated in a sustainable manner with access to the grid.
• Identify the optimum extension path of the T&D network to increase access to energy as well as integrate the proposed DG plants.
• Explore the economic and financial aspects of DG development and Grid extension including Viability Gap Funding (VGF) determination.
• Prepare a Workable Plan for Sustainable Distributed Generation for Grid Access to All (SUDIGGAA).

In order to achieve these objectives, following methodology was developed.

The output of the study can be summarized in two aspects, namely, the Distributed Generation aspect and Grid Expansion aspect. The number of DG sources and their capacity identified in each province are presented here in Tabular form

 

	Province 1	Province 2	Province 3	Province 4	Province 5	Province 6	Province 7	Country Total
Number of Identified Distributed Generation Source
Hydro	54		33	25	16	45	48	221
Solar PV	71	127	70	58	85	33	37	481
Biomass	11	9	16	2	8	1	3	50
Wind	1	-	-	-	-	-	-	1
Province Total	137	136	119	85	109	79	88	753
Capacity of Identified Distributed Generation Source in MW
Hydro	43.0	-	26.4	22.4	12.6	43.1	44.9	192.6
Solar PV	71.0	127.0	70.0	58.0	85.0	33.0	37.0	481.0
Biomass	3.5	3.0	8.7	1.5	2.3	0.3	1.1	20.4
Wind	0.2	-	-	-	-	-	-	0.2
Province Total (MW)	117.8	130.0	105.1	81.9	99.9	76.5	83.0	694.2

 

The investment required for different kind of DG varies. The variation also occurs due to geographical location and existing condition of the roads. The investment required for each province is presented here in lump sum. Photovoltaic as a DG seems feasible with the subsidy from the government. The subsidy required for each province and the comparison chart between the investment and subsidy for the country is presented in the following graphs.

 

 

The other aspect of the study output is the Grid Expansion aspect. The substations were identified in each local municipality in a geo-demographic centroid of the local municipality. The local municipality with existing substations lying outside a 5 km diameter of the geo-demographic centroid are also proposed with another substation. The total number of proposed substations are presented here. A total of 532 substations are proposed all over the country. Similarly, the length of transmission and distribution lines required for interconnecting the proposed substations to grid at different voltage levels are presented. Combinedly, the length of T&D lines required is 7828.5 km. Finally, the cost required for each province is shown.

The total cost required combinedly for both Distributed Generation and Grid Expansion is as shown in table below. The total cost for sustainable grid access for each local municipality in Nepal is obtained to be 208,730.22 Million NPR.

	Province 1	Province 2	Province 3	Province 4	Province 5	Province 6	Province 7	Country Total
Cost of Distributed Generation in Million NPR	26,562.00	21,805.00	23,057.00	15,598.00	19,448.00	21,433.00	20,228.00	148,131.00
Cost of Grid Expansion in Million NPR	10,102.59	12,260.42	8,813.41	7,011.04	7,378.26	7,266.52	7,766.99	60,599.22
Grand Total	36,664.59	34,065.42	31,870.41	22,609.04	26,826.26	28,699.52	27,994.99	208,730.22

For a detailed study of the output of the project including the workable plan for execution of the project. The full report is available in the following link.

https://www.npc.gov.np/images/category/NPC_NEAEC_Final_Report_Final.pdf

A summarized form of the report has been prepared. This executive summary can be viewed in the following link.

https://www.npc.gov.np/images/category/SUDIGGAA_final_version.pdf