Anjal Niraula on Nepal's Solar Revolution and the Future of Clean Energy

[00:00:10] - [Chhedon Kansakar]
Namaste, and welcome to Pods by PEI, a policy discussion series brought to you by Policy Entrepreneurs Inc. My name is Chhedon Kansakar. In this episode, PEI's Saurav Lama sits with Anjal Niraula to discuss the potential and the many challenges for solar power in the Nepali electricity system. Anjal is an off grid solar expert. He is currently the CEO of Gham Power, a renewable energy focused social enterprise that has installed over 2,500 solar projects across Nepal.

[00:00:40] - [Chhedon Kansakar]
Anjal was a Chevening scholar at the University of Edinburgh and holds a master's degree in energy systems. He's also a future energy leader with the World Energy Council where he works on the energy access task force. And Anjal discussed Nepal's solar industry and its feasibility, with Anjal arguing for greater use of solar energy in a hydro dominated electricity sector. The two talk about global solar uptake patterns and why Nepal's uptake hasn't followed suit, as well as Nepal's own renewable energy targets established through its nationally determined contributions. They also discuss some important policy level issues such as the role of governmental institutions and the private sector in promoting renewable energy sources and evaluate their performance.

[00:01:26] - [Chhedon Kansakar]
They conclude the discussion with some technical solutions, including the importance of battery technology and recommendations for the country's future solar energy. We hope you enjoy the conversation.

[00:01:40] - [Saurav Lama]
So a warm welcome back to all our listeners to another brand new episode of Pods by PEI. Namaste. This is Saurav Lama.

[00:01:48] - [Anjal Niraula]
Namaste. This is Anjal Nirola.

[00:01:50] - [Saurav Lama]
Welcome to Pods by PEI, Anjal. How are you doing today?

[00:01:53] - [Anjal Niraula]
All good. Thank you for having me.

[00:01:55] - [Saurav Lama]
It is our pleasure to have you here at the PI studio. Shall we get on with our conversation today? Absolutely. Before we get into the topic of the day, let me first give kudos for all the great work you and your team at Ganpower have been doing in the solar power space in Nepal. And also, congratulations for the recently launched Grid Resilience through Intelligent Photovoltaic Storage, it's a mouthful, or GRiPS project.

[00:02:19] - [Saurav Lama]
Do you want to give our listeners a brief overview of the project so that they can get a peek into into the kind of work that you do?

[00:02:27] - [Anjal Niraula]
Sure. Sure. Yeah. Thank you for the compliment. Yeah.

[00:02:30] - [Anjal Niraula]
It's been a while since we started our work in the solar space. So talking about the GRiPS project in particular, I think it's it's more a continuation of of our work in solar over the last few years. So what we're trying to address is the need for balancing the intermittency of solar and its impact on the grid. Right? So usually, solar is not available all the time.

[00:03:01] - [Anjal Niraula]
There's there's obviously our electricity grid itself is not very reliable. So how do we design a system that adds value to the electricity grid and helps it become more resilient? Introduce redundancy, right? So these are the things that we are trying to understand and learn through the Grips project.

[00:03:22] - [Saurav Lama]
Oh, that is wonderful indeed. We'll get into some of the issues that you just raised related to solar power, but let's begin our conversation today by painting an overall picture of Nepal's solar potential. Now, we are all aware about hydroelectricity potential that Nepal has. This is a topic that has been well established for the last four to five decades in Nepal's energy discourse. Right?

[00:03:46] - [Saurav Lama]
But you are from the solar sector, and I'm sure you see great potential within the solar space as well. So now could you tell us and our listeners about what Nepal's true solar potential is and if you think we can ever achieve this potential?

[00:04:01] - [Anjal Niraula]
Sure. I mean, so just like labeling numbers to potentials, think, I mean, I don't feel like it's probably the right way to things, right? So even the 83,000 megawatt hydro potential, don't know if it's truly achievable. So I think just assigning numbers to is probably like is not very relevant, but I think the solar IC as having, you know, like, just a very important place in Nepal's electricity network because obviously Nepal has a lot of space that cannot be truly utilized, you know, like so we've got very we've got sharp hills, we've got the desert in Mustang region, you know, so there's plenty of space in Nepal that can be used to harness electricity, but obviously the true potential word is a bit loaded because then you need to factor in, even if you build a large solar power plant in Mustang, can you really evacuate it? Right?

[00:05:01] - [Anjal Niraula]
So where can the grid can actually accept this potential? Right? So, I mean, right now I feel like we can easily do one thousand-two thousand MW of solar, you know, just immediately going forward. And obviously, we need to balance it out with all the other support ecosystem that's needed, right? And then that's where we can truly utilize the potential of solar.

[00:05:23] - [Anjal Niraula]
But to to the actual power of solar is the fact that it's demand driven. You know, you can set it up very close to the consumption center. Right? So you can build solar projects on your rooftop, you know, unlike hydro, where you need to go to a remote area, build large transmission lines, you practically don't need any transmission lines. Right?

[00:05:44] - [Anjal Niraula]
So these are the these are the advantages of solar that if you can truly tap into, you can help in creating a more robust utility grid in our country.

[00:05:56] - [Saurav Lama]
That is indeed great to hear, but you and I both know that Nepal's electricity discourse and the system in general is dominated by a hydro centric mindset. So you, as someone with a skin in the solar game, how would you make a case for more solar power in Nepal?

[00:06:15] - [Anjal Niraula]
Sure. And and for good reason. Right? I mean, I I think Nepal is blessed with a lot of rivers, a fast flowing rivers, the geography and, you know, like, our geology, a lot of things allow for hydropower to flourish. But, I mean, having said that, there's also technology changes all the time, right?

[00:06:37] - [Anjal Niraula]
So hydropower was, in fact, like, very relevant along I mean, like, you know, for the last decade, even like twenty, thirty years. But now, with the technological improvements, right, so now that we've got solar power that's very cheap, I mean, like, look at rates at which people are bidding for solar prices in different parts of the world, you can see that the prices of solar power is getting more and more competitive. Couple that with the fact that the battery prices are also falling, mostly driven by the electric vehicle, you know, like market, but it's falling nonetheless. It's also the fact that we also don't need transmission lines, right? I mean, if you build large scale hydro, know of a lot of projects where generation has been quite easy, but evacuating that power to the main substation is the most time consuming part, that's where the project gets super expensive, that's where all the social issues come into place, right?

[00:07:42] - [Anjal Niraula]
So the right of way and then there's tons of issues around that as well, right? So solar has its own space, you know, just for the reasons I stated earlier, the fact that it's demand driven, you can build it very close to consumption centers. Say you're running an industry and you require 100 kilowatt, we can have that 100 kilowatt. If I need 500 kilowatt, I'll put up 500 kilowatt, right? So it's modular as well.

[00:08:06] - [Anjal Niraula]
So solar is a completely different technology, albeit it's renewable like hydro. But because of all these different traits, they all have their own space in an electricity network, and both of them aid in making a grid more reliable and robust. And as consumers, that's what we need.

[00:08:23] - [Saurav Lama]
Those are indeed some very valid points that you just made making a case for solar. But from a technical point of view, there are indeed a number of limitations that are often raised when solar power is brought up. The first being the mismatch between the generation and the demand for electricity that is solar production only occurs during the hours of sunshine, whereas the peak electricity demand is during the morning and evening hours. Some of the other limitation that is also labeled is that solar is an intermittent source of energy. In other words, it is highly affected by the natural fluctuations within the weather, which can introduce disruptions to the grid.

[00:09:05] - [Saurav Lama]
So what is your take on these limitations? And is the Nepali system even ready for solar given these limitations? Sure. I mean, I think

[00:09:15] - [Anjal Niraula]
I'll start with the last question first. Right? Is system ready? I mean, we've not even began begun to scratch the surface of this true solar potential, right? I mean, even if you look at the overall generation mix, solar is contributing like 5%, like, much lower than 5%, right?

[00:09:34] - [Anjal Niraula]
So within that threshold, there's no way to even test that assumption. I mean, in other countries, people have gone way above 30%, and that's actually been realized. Now, going back to the other statement that you made regarding time of day fluctuation of solar and the fact that there's a supply and demand mismatch. That's very true for a lot of the residential houses. I think just the fact that if you look at the overall consumption makeup of a Nepal electricity consumption, about 40% of that is consumed by businesses and industries and and almost 50% is residential.

[00:10:22] - [Anjal Niraula]
Right? So, I mean, as the industries grow and that's the way we're looking at, you know, like increasing Nepal's economy and we're trying to promote industries and the majority of the consumption starts happening during the daytime. Right? So even if you look at right now, right, so you you can you can sort of in Birgansh, there's a lot of load shedding happening at the moment. Right?

[00:10:47] - [Anjal Niraula]
So industries in Hetauda, industries in Biratnagar, you know, a lot of people that I've been in touch with, they often complain about lack of quality of power, it's not timely, and even if there's no complete blackout, they're brownouts, right? So there's, I mean, it's the lack of the power quality is just not there. And for such industries right now, the only option is you just take care of things either with diesel generator, and then that would involve, you know, importing more diesel fuel, which we do not necessarily have, and our government is trying very hard to cut down on the diesel imports as well, right? So solar fits perfectly well, like on top of industries, where you immediately help an ailing sector get access to a more reliable, cleaner power, and actually cheaper than than NEA as well. Right?

[00:11:43] - [Anjal Niraula]
So basically, what we are doing at the moment is we are going to these industries and saying, hey, sign a contract with us, a fifteen to twenty year PPA, and our cost to you would actually be cheaper than what the utility charges you. Right? So that's a deal that we're already making, and our industries are taking that up very easily. Now, obviously, the duck curve is actually a real phenomena, right? So I'm not trying to just, you know, like, undermine that at all.

[00:12:14] - [Anjal Niraula]
I think the the way to address that would be through introduction of storage. Right? And and obviously, that's what we're also trying to understand in our grips project. Right? So solar alone would obviously immediately help a certain sector, which is the industries.

[00:12:32] - [Anjal Niraula]
But over time, coupling solar with battery storage and other forms of storage is the way to move forward. And obviously, that would involve, you know, more research and we're not going to get there overnight. Right? So you start with a few steps. You start with setting up solar PV system.

[00:12:50] - [Anjal Niraula]
And then as the battery technology matures, you go with the battery technology and you also try and understand what the business model is, right? So how can you what kind of effect that would have on the utility grid? So all these things are things that you study over time, and you're not going to have all of that all at once, right? So our idea at the moment is to start deploying solar in these distribution grid and supplement that with storage in a few years as we go along.

[00:13:20] - [Saurav Lama]
I think battery storage is one of those things that even in our previous episodes, one of our guests did touch upon and the importance of batteries in this electrical revolution is immense. I think that's well documented. But I like to bring something that you touched on your previous answer, was the global uptake of solar electricity. It is true. Despite of the shortcomings that we just discussed, we do see a significant increase in the uptake of solar across the globe.

[00:13:46] - [Saurav Lama]
Some studies have even shown that solar and wind now comprise two thirds of the global new net electricity generation capacity additions. But the way solar power is seen and made use of in Nepal is quite different, isn't it? On the one hand, this has been seen as a fringe technology. Like, it's been seen as a donor driven sector suited only for the purpose of increasing access to electricity for populations in remote places. And when we do discuss this as part of the grid, it currently accounts for less than a percent of Nepal's energy mix.

[00:14:21] - [Saurav Lama]
So what are the reasons as to why Nepal's uptake for solar does not follow the global trend?

[00:14:27] - [Anjal Niraula]
Sure. I think you you touched upon, like, a lot of things there. Right? So I think solar obviously, if you look at the history of solar in Nepal, I mean, it's also a good fit actually, you know, like places like Mount Everest Base Camp. So we've done a project there in one of the research stations in Lobuchi at like 4,500 meters where, like, few scientists, they're running a weather station, you know, like, they're gathering data around, like, climate change, and that project has been going on for, like, twenty years.

[00:15:00] - [Anjal Niraula]
Now, you know, just extending of our transmission line all the way up to low, which would have been, like, near about impossible. I mean, just financially. Right? I mean, they would have been it would have made no financial sense. So and and, obviously, we have a lot of regions in Nepal which are so remote that setting up solar and battery makes a lot of sense.

[00:15:21] - [Anjal Niraula]
And that's how solar was viewed initially. Right? So even the the organization that promotes solar in Nepal is called Alternative Energy Promotion Center. Right? So the concept here is that hydropower is the mainstream source of energy, and solar is the alternate.

[00:15:40] - [Anjal Niraula]
Right? So that's how, at least like, you know, when we were envisioning our power system, we were envisioning a system which was predominantly hydro, and solar was taking care of all the needs of the remote areas. That's true, but at the same time, the way the solar power has evolved, and also, like, the way the electricity prices have dropped globally. You know, it just makes a huge case for solar. And as Nepal, you cannot just look at your electricity infrastructure, you also have to look at India's electricity infrastructure.

[00:16:18] - [Anjal Niraula]
Right? So India was driven predominantly by coal. Right? So with coal, you know, like, you get a very solid base load. Right?

[00:16:27] - [Anjal Niraula]
So the cost of electricity is is pretty much constant throughout its operation. When you put into this renewable energy generation, like, say, wind and solar, it's, you know, the availability, the intermittency plays into the factor, and then the price goes up and down. Right? So when you are Nepal is relying solely on hydro, like, the time of day at which Nepal can evacuate the power to to India, I think that the price that our utility can fetch will also change tremendously. Right?

[00:17:02] - [Anjal Niraula]
So so just relying on even hydro makes, you know, like, need to be able to show ensure, okay, at what time can you can you do these trades? I think that defines a lot how much profit NE is able to get. Now, the fact that you introduce solar into the mix, right, so you introduce batteries into the mix. I think there's more opportunities for NE to also maximize their revenue, you know, just because of all these changes that are happening to the electricity system, not just in Nepal, but also elsewhere. And obviously, a lot of it is also driven by climate change, you know, which is an issue that we've not even spoken about, right?

[00:17:39] - [Anjal Niraula]
So hydro as a as a, you know, like a as a source of energy is driven by water, like coming from glaciers and at the rate which glaciers are melting, will they be around in the next forty, fifty years is a big concern, right? So there's energy security, diversity, so there's a bunch of issues that we have to, like, grapple with, right? So I think the question about global energy, global solar uptake, I mean, it's as I said, I think just summarizing that thought there. I think it's been driven mostly by cost in areas around the world where people had to, like, add more capacity or had to displace these dirty generators. I think that made a lot of sense.

[00:18:28] - [Anjal Niraula]
In Nepal, our demand is increasing, as we need to look for more energy security, as we need to diversify our production, as we need to provide a more resilient grid in a world where prices of solar are decreasing at a at a rate which battery prices are decreasing, this just makes a great case for solar generation in Nepal. But, obviously, the uptake has not been there because just the concept has been so hydro centric.

[00:18:56] - [Saurav Lama]
But we do have a policy that is expected to hopefully result in greater adoption of solar in Nepal's overall energy mix. Through our nationally determined contribution NDC, Nepal has set a target of 15,000 megawatts of clean energy generation by 02/1930, of which five-ten percent will be generated from solar and other similar renewable energy sources. So from your experience in the sector, how do you see these targets and do you think we are doing the necessary things to get there?

[00:19:27] - [Anjal Niraula]
Right. So I think first things first. I think there's one thing to set a target, but also, like, once you set a target, you need to start about defining, like, how do you get there. Right? And And if you look at the history of policies supporting solar, it has actually like mostly been focusing on promoting solar in remote areas.

[00:19:49] - [Anjal Niraula]
And solar has never been in conversation of our policymakers in terms of like how that can be brought into the mainstream, right? It's always a stepchild to hydropower, you know, at least in terms of our policymakers. And I'll tell you why I say that, right? I mean, a strong word to say, but initially, the PPA tariff that you define for solar projects, it's much lower than what hydropower has has been, you know, like, is is given. Right?

[00:20:23] - [Anjal Niraula]
So for hydro, you get PPA tariffs of 4.8 during the wet season and then 8.4 in the dry season. For solar, it was initially 7.3, and then it was dropped to 5.94 very quickly. And now, you know, like, for the longest of time, the PPA for solar has actually not been taking place. I mean, although there are statements that we make during, you know, like, like, making statements about NDCs, but our government at the moment is not signing power purchase agreements for solar projects. In fact, even net metering, which is which was, you know, like, which our utility only started doing after years of, you know, like, difficulty.

[00:21:11] - [Anjal Niraula]
It's not been happening for the last five, six months. Right? So a lot of the the the systems that I've been on since 2022, they've actually been not feeding into the grid. Right? Which is a big setback.

[00:21:28] - [Saurav Lama]
But whenever we are talking about electricity within the country, there is one entity that can never be negated and that is NEA, which is the country's sole off taker of all electricity in the country. But in a political economy study that PEI conducted in 2021, which we have also covered in one of our earlier episodes of PODS by PEI, and I would highly recommend that all our listeners go back and listen to, so we noted NEA's half hearted commitment to offtaking solar electricity. This is something that you also touched on in your previous answer. So you also mentioned the reduction in the PPA price from 7.1 down to 5.94 rupees per kilowatt hour. So what is your take on these mixed signals that NEA has been sending solar electricity manufacturers?

[00:22:23] - [Saurav Lama]
Yeah.

[00:22:24] - [Anjal Niraula]
I think, like, we do not have a long term vision in place. I think that's the the way I understand it. Right? I think how NEA is looking at solar is is they're looking at it as a generation that is sort of is not helping their overall utility grid, it's just taking away their revenue. I think, like, that's one perspective, and at least I've heard this in some of my conversations some of their officials, right?

[00:22:54] - [Anjal Niraula]
So, say like I set up a half a megawatt solar on a rooftop, and the entity starts using their solar on their roof, right? So, that means that NEA is not able to to gain half a megawatt worth of revenue, right? And they've spent quite a bit in deploying this this infrastructure, like the distribution infrastructure. I think that's I think that's how they view it. But the way we look at it is that's actually a very myopic view.

[00:23:22] - [Anjal Niraula]
Right? So in the short run, yes, it is indeed reducing some of the revenue. But I think what about the other advantages of solar and batteries and other distributed generation in the utility in the distribution network. I think that's something that NA has not done much homework on. Right?

[00:23:41] - [Anjal Niraula]
So what I mean is our discourse often often involves talking about supply and demand. So we talk about 3,000 megawatt of generation, 5,000 megawatt of generation, 2,000 megawatt of demand, 1,500 megawatt of demand. But I think what our conversation should also hover around is how do we get that generation to the people who need it the most. Right? So the households, the industries, how do we ensure that they have a more reliable connection?

[00:24:11] - [Anjal Niraula]
How do we ensure that the voltage levels, the frequency levels are are up? And also, like, how do we ensure that there's no load shedding? Right? So I mean, think about a customer. Right?

[00:24:21] - [Anjal Niraula]
So they might be 9 rupees, 10 rupees to NEA, but the fact that they need to have a diesel generator as a backup, everybody needs to have a UPS as a backup. Right? The cost of electricity is actually much higher than what NEA is charging to the end customer. Right now, if you look at how can solar and battery in strategic locations, that can actually feed reactive power into the grid. That will help NEA increase its increase its revenue.

[00:24:48] - [Anjal Niraula]
If you can time shift energy. Right? So basically, NEA does not have much consumption during the nighttime. Right? So if you can charge batteries with that power, you know, during the nighttime and during the congestion time, you can discharge this power.

[00:25:02] - [Anjal Niraula]
That can actually help NEA smoothen out their their their load profile. Right? I mean, it it will help them increase their revenue even further. Right? So this myopic view that solar is actually eating into my revenue is not allowing developers like us and other innovators to have this piece where you can experiment with distributed systems, where we can experiment with digital technology, which can in turn help NEA to make a more robust distribution grid, right?

[00:25:33] - [Anjal Niraula]
So that's the way we see it. Although the view is myopic, I think if you can, like, have a more if you can sort of, like, step back a little bit and look at things from a more bird eye picture, you know, like how trends are evolving all over the world, how battery prices are falling down, how the cost of transmission is going up. That's the view that any should take, in my opinion.

[00:26:01] - [Saumitra Neupane]
Hi there. This is Saumitra Neupane from Policy Entrepreneurs Inc. We hope you're enjoying PODS by PEI. As you know, creating this show takes a lot of time and resources and we rely on the support of our community to keep things going. If you've been enjoying the show and would like to help us out we'd really appreciate it if you could become a patron on Patreon.

[00:26:24] - [Saumitra Neupane]
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[00:26:53] - [Saumitra Neupane]
Now let's get back to the episode.

[00:26:59] - [Saurav Lama]
Well, that is kinda like the appeal that you just made to NEA. But what about the other institutions that are also working within the electricity sector that are responsible to promote renewable energy in Nepal? For example, you mentioned AEPC, the Alternative Energy Promotion Center. How about the Department of Electricity Development or even the Ministry of Energy for that matter? How do you evaluate their performance?

[00:27:25] - [Anjal Niraula]
Yeah, I think like just a lot of them get their feedback from one another, right? So, I mean, it's I mean, there's very little space for innovation in these institutions I see. And a lot of the internal processes and red tape as well, right? So, and I'll give you an example, right? So, for one of these large solar projects that we were designing, we were asked to do an initial environmental examination, an IEE, right?

[00:27:54] - [Anjal Niraula]
So, were trying to do that and we realized that, and this was like way back, three, four years ago, and we went to one of these organizations and we said, okay, like, here is the IEE and we were asked, okay, where is the report on the fish? Because we are given this template of IEE for a hydro project, right? So I mean, solar is not, I mean, IE for solar and IE for hydro is completely different, right? So the water level mapping and fish and all these analysis we had to do for a solar project where, you know, which are completely not needed. So a lot of our bureaucracy and people work and preparation, all of it is based around hydropower and a solar power plant development requires a completely different process.

[00:28:42] - [Anjal Niraula]
And I don't see, like, enough initiative taken by some of these organizations to educate themselves and educate their staff in terms of how this is being done in other parts of the world, right? I mean, we're sort of like just pushing solar down as much as we can rather than trying to open our arms and trying to understand like how it's being, you know, like adopted in other parts of the world. That's and and obviously a lot of education is needed and a lot of open minded mindedness is needed as well.

[00:29:12] - [Saurav Lama]
But the criticism cannot solely be levied on our governmental organizations. Right? I mean, there are also a lot of criticisms that most of the private sector in the solar sector have only survived off of the subsidy provided by AEPC and the government and that there are no genuine investors within the sector. How would you respond to such criticisms?

[00:29:35] - [Anjal Niraula]
I mean, see, like, you reap what you sow, right? I mean, if you do not have provide fertile grounds for investment to happen, Right? So for innovations to happen, I mean, that's the kind of rent seeking mentality you see in the market. Right? So basically, power producers and not just solar power, I'll them distributed generation providers.

[00:30:00] - [Anjal Niraula]
Right? So they're viewed as contractors, right? So you go to any go to a lot of these institutions. Most of the contract that's been drafted are turnkey project contracts, right? So there's no room for public private partnership, right?

[00:30:13] - [Anjal Niraula]
So that concept is still not materialized. Investment, if you go to some of these authorities where which require you to gain gain approval for foreign investment, it takes ages. You know, the concept of distribution, bringing in investment for distributed generation does not exist. Right? So for us, like investment into energy is just investment into hydro.

[00:30:36] - [Anjal Niraula]
Right? So those policies have not been revised. And and if you do not create a fertile ground for such discourse to happen, such innovation to take place, for people to take risks and still survive, you know? And obviously you get this mentality where people are relying on solar and your assertion is actually quite true. I mean, I remember like few years back, there were about, like, 200 solar companies in Nepal, a lot of them relying on subsidies from AEPC and other institutions.

[00:31:10] - [Anjal Niraula]
Once the subsidy dried up, a lot of companies shut down, unfortunately. I mean I mean, that's the reaction of of, like, the system and and no. And that's that's what I'd see to that.

[00:31:22] - [Saurav Lama]
So you just brought up fertile land. I mean, that was a figurative fertile land, but I'll come to a more literal fertile land in the case of Nepal. So another challenge that was raised by many of our respondents for the political economy survey that we did mentioned that the issue of limited availability of land and most of the solar projects from a cost perspective can be constructed in the Tarai, which is the area with the most fertile land in Nepal. So how do you view this challenge?

[00:31:52] - [Anjal Niraula]
See, I mean, I think it's just a narrative that has been constructed and does not hold much stock. Right? So see, like me, Ghan Power, my company, we specialize in building rooftop solar. Right? So if the fertile land was an issue, I mean, like, building rooftop solar should have been, like, you know, been allowed without, you know, like any restriction.

[00:32:16] - [Anjal Niraula]
But, you know, as a rooftop solar provider, we are subjected to so much more restriction as well. Right? Even as I said, net metering is not allowed as well. Right? So it's not just a matter of building solar projects in fertile land.

[00:32:30] - [Anjal Niraula]
And and so if you look also look at the solar map of of Nepal, the most solar irradiation is actually in the northern parts. Right? So Mustang, Manang, these are, like, areas with tremendous solar radiation. Terai is actually, like, one of the areas with the least solar radiation. Right?

[00:32:50] - [Anjal Niraula]
So if I had an option, I would go and build projects in Mustang like 400 megawatt, you know, but then the problem is how do you evacuate that power. Right? So there's this bunch of things that you need to solve. Right? So this ecosystem needs to be built for for solar to actually flourish.

[00:33:07] - [Anjal Niraula]
And and and the reason a lot of projects are currently being built in in Terai is because, not because of the land issue, but because the transportation is easier, right? Because there's connectivity is easier. You can just find a substation very close by and then the cost of installation is actually quite simple. Right? So there are actually like the fertile land itself is is is pretty weak argument, I would think.

[00:33:31] - [Saurav Lama]
But Nepal was an early adopter of solar rooftop systems. At least back in the day when we used to have crippling load shedding, some percentage of homes and businesses were installing solar rooftop systems despite the high cost, so they would have uninterrupted power. But as we have ended load shedding, which was an important incentive for solar adoption, do you think that the high upfront cost as well as the lack of access to financing for individuals and businesses is leading to decreased adoption. How would we go about improving the uptake of solar systems then?

[00:34:08] - [Anjal Niraula]
Nepal was one of the, you know, like early pioneers of solar and battery for sure. Right? So even during the days of load shedding, and that's when we were established, by the way, right? We did close to 2,000 systems, right? So a lot of these systems where we'd go to people's houses, businesses, and set up solar and battery, And obviously, if the utility has no power, you need to generate it from somewhere.

[00:34:32] - [Anjal Niraula]
Right? And it solved a lot of problems as well. Now, for that to sort of like scale up now, I think that it's so the current so right now is actually a better time for solar, I would say, compared to the times when we had extensive load shedding, and I'll tell you why. Right? So when we had load shedding ten years ago, the price of solar was $1.5 per watt, dollars 2 per watt.

[00:35:06] - [Anjal Niraula]
Right now, the prices of solar are down to 30¢ per watt. Right? So which is incredible reduction in cost. The same with batteries. Right?

[00:35:16] - [Anjal Niraula]
So the battery technology has matured tremendously in those last ten years, and the costs are falling down. Right? So the overall capital cost to set up a one kilowatt system ten years ago versus now is is a multiple of two or three times cheaper. Right? And and along with that, our manpower, you know, like the technical skill set of installers has increased tremendously.

[00:35:40] - [Anjal Niraula]
Our banks have acquired tremendous knowledge with regards to distributed energy financing. Right? So the time to finance and to install solar has never been better. Right, just in terms of the support ecosystem that we currently have. But to get to a stage where we can start actively deploying systems, a lot more is needed.

[00:36:03] - [Anjal Niraula]
Right? So we need to open up regulation around how investment is mobilized into these systems. Right? So our liquidity in our country changes significantly. A lot of investment is required for us to deploy solar projects.

[00:36:17] - [Anjal Niraula]
So foreign investment regulations have to be looked into. You know, still a lot of uncertainties around, you know, like, okay, what kind of how do we promote a company that holds like 100 assets? Right? Mean, and I had this conversation with this government official looking into a file where we said, Okay, you need to do an IEE. And I said, Okay, unlike a hydro project where we, like, which operate at one site, I operate at 100 sites.

[00:36:48] - [Anjal Niraula]
Where do I do an IEE? We look both looked at each other, like, very puzzled, and he goes, like, do an IEE at your office then, you know, like, and I was like, okay, what purpose that would serve, right? So obviously the regulation and the understanding of our, bureaucracy, I think that can be improved tremendously. We still need strong support from the NEA. I think we talked about earlier how NEA should not view solar as a competition.

[00:37:18] - [Anjal Niraula]
It should view solar and companies which are working in digital solutions, distributed generation, as collaborators, right, not as competition, as something that helps them achieve, you know, like increase their efficiency, reach more customers, and also increase reliability, right? So that's how NEA should view them. In fact, I can I've actually been seeing this for a while, but I'm actually open to to to NEA investing in us, right? I mean, I just got just they are looking for investment opportunities. I think we're with the kind of if they can build a hydro project, why not invest in solar projects as well?

[00:38:00] - [Anjal Niraula]
Right? I think that would actually send out a strong message as well in terms of to foreign investors, like give them confidence to enter into a market where we'll see more players. And and and, obviously, with the introduction of more players, with a more robust ecosystem, we'll see more deployment.

[00:38:16] - [Saurav Lama]
But here's a question that's on a slight tangential note, but I really wanted to ask this question to you. So if the intent is to increase the solar uptake in our generational mix, would it not be easier or cheaper for us to be importing solar electricity from India where it is being produced at under rupees 3.5 per kilowatt hour with whereas in the case of Nepal, the proposed rate was rupees 5.94.

[00:38:47] - [Anjal Niraula]
I mean, see, like so when you look at energy policy of a country, I think energy generation mix is is probably like one aspect, right? So energy, you know, like security is the other, right? So if we are to say that, okay, we'll import everything from India and like shut down, like, you know, even, like, inhibit the growth of our ecosystem. Right? So, I mean, for us to get to that stage where India is generating at 3¢ per kilowatt hour, and we look at our developers in Nepal, I think it's a good question that you ask.

[00:39:23] - [Anjal Niraula]
Why are we not able to generate electricity at the same rate as India? And I'll give you an answer, right? I mean, we neither have the experience of not just installers, but also like investment structures, like the support from the utility. So there's the transmission line building, right, the land prices, the sizes of the project is a bunch of things that, like, stop us from getting to prices which India can can generate electricity at. So it's not a apples to apples comparison.

[00:39:57] - [Anjal Niraula]
Right? So it's a completely different skill at which we're looking at these two things. Now, if we are to see that, okay, India is doing it much cheaper, we can just, like, import energy from them. I mean, what I would say is, okay, do you still remember 2015, 2016 when you had to buy petrol at $5 per liter? You know, I mean, is that is that not a realistic thing going to happen in the next five years?

[00:40:24] - [Anjal Niraula]
I mean, I would have liked to have my energy security robust as well before, you know, like, I decide on my energy policy just based on price.

[00:40:37] - [Saurav Lama]
So what I'm making of our conversation so far is that Nepal does have a lot of solar potential, perhaps even more or as much as our hydro potential. But there are significant challenges in the sector to be able to fully exploit this potential. So hypothetically, if you're asked to be at the helm of the Ministry of Energy, what are the three things that should happen within the sector? What would your first course of action be?

[00:41:11] - [Anjal Niraula]
Yeah. I think I'd stop being fearful. I think we are very fearful to change. I think as utility, as as ministry, as practitioners, the distributed revolution is happening, whether we like it or not. You know, the prices are falling, you know, like a few years from now, I think there could actually be a situation where I can just have solar and battery in my house, a much more reliable power, and that power could be cheaper than the grid.

[00:41:42] - [Anjal Niraula]
Right? Now, I think the way I would look at this is, let's not suppress production, right? So there's a lot of, you know, like companies still struggling to get PPAs at the moment, right? I mean, the same time, there's demand is still our net kilowatt hour per capita consumption is actually like one of the lowest in the world, right? So there's there's still so much more energy that we can consume, right?

[00:42:11] - [Anjal Niraula]
I mean, our industries are struggling, right? Every year is the same story where our industries like either have very bad quality power, you know, it's they have to like focus on creating diesel in and it's it's it's not a ripe climate for development, right? So our demand can actually be much higher. Right? So if you're an entrepreneur looking to start an industry or a manufacturing plant, you think twice.

[00:42:39] - [Anjal Niraula]
You always the first thing goes like, okay, should I buy something electric because where's the reliability? The same goes with with my family. Right? So I I still use LPG gas in my house. Right?

[00:42:52] - [Anjal Niraula]
Because I all the induction tools are quite competitive now. Reliability is an issue. Right? So our when we talk about like generation and production, if you're not able to solve the reliability factor, the uptake is not going to be high. Right?

[00:43:08] - [Anjal Niraula]
So I think what I would do is not be afraid. I would allow generation to to to to happen. Evacuating that power into NEA, to to India, I think that's the other thing that we need to look at look into. I mean, like, there's this diplomacy needed. There's a long term vision and plan behind these negotiations, right?

[00:43:30] - [Speaker 2]
I mean, every time we've got these ministerial shake ups and like, you know, just our narrative and our our stance towards like these negotiation positions changes quite significantly. Right? So just having that consistent narrative and like view and taking up a certain negotiation position with India is obviously needed, while also exploring export opportunities to places like Bangladesh. Right? So you have to keep exploring these options, but you cannot stop a nascent industry from from growing.

[00:44:01] - [Anjal Niraula]
Right? So if you cannot if you're not able to have export opportunities, I've there's there's enough demand possibilities inside the country. Right? I mean, we've got seasonal variations already. Right?

[00:44:14] - [Anjal Niraula]
So we've got, like, a lot of excess generation in the monsoon, but in the winter, we have large deficit. Hydrogen becomes a interesting area to explore. Right? I mean, when we have, like, so much hydro so much hydro excess during the monsoon, can we use that to to to create hydrogen? Right?

[00:44:33] - [Anjal Niraula]
I mean, that's just and that's the way and that's also a battery technology in a sense. Right? I mean, it's sort of like inefficient battery, but still, like, I mean, you can use that to replace other forms of gas. Right? So so there's seasonal variation that you can balance.

[00:44:49] - [Anjal Niraula]
There's daily variations that you can balance using storage and then solar and other distributed forms of generation. But in a whole, you cannot stifling generation and production and for innovation, you know, having that one consistent message that you can follow for five, ten year horizon. I think that's I mean, if you can just iron out that vision and get everybody to agree on that vision and and let innovators, let investors and let all these other ecosystem to flourish around them, think our our energy industry would be in very good hands.

[00:45:26] - [Saurav Lama]
So here's one final question to wrap our incredibly insightful and reinvigorating conversation. We So discussed a lot of things today. We discussed some very pertinent policy problems, some important technical solutions, among other things. But if we are to go back to the very beginning of our conversation today, we discussed that Nepal's electric sector is dominated by a hydro centric mindset. So do you think or perhaps, how can we bring a transformation for solar energy to be viewed as being part and parcel of Nepal's energy system?

[00:46:05] - [Anjal Niraula]
Sure. Sure. I I think we we started this conversation by talking about the GRIPPS project, and I think through the project, that's what we we want to do. Right? So, I think over the longest of time, I think what I've realized is that solar energy and hydro and grid, we've sort of like been tussling and and this has been tug of war, you know, like it's I think what is needed and we obviously talk about like a lot of theoretical things, right?

[00:46:34] - [Anjal Niraula]
So we do calculations in Excel. We have our own numbers that we'd like to throw, but the actual test and actually, like people have not actually gone on the ground and and done things and and shown people things. Right? So you're just seeing is believing. I think that's something that I've learned very hard way.

[00:46:53] - [Anjal Niraula]
So what we're looking to do through the Grips project is is I've got, like, people from NEA on board. They're one of my advisers. They're they're looking at this project very keenly. What we're doing is we're setting up a small solar battery plant in a distribution network, and we're studying its effect on the grid. Right?

[00:47:12] - [Anjal Niraula]
I mean, obviously, as a solar practitioner, my business model, my end customer, like, kind of benefits? These are easy to calculate. I mean, there's few numbers. But what kind of effects would this system have on the grid has not been quantified, at least in monetary terms. Right?

[00:47:28] - [Anjal Niraula]
So that's what we're looking to do through the course of the project. Now, with any advising on this project and with us being able to share the result of this project with a wider audience, our aim is to demonstrate that the project can actually have a much, you know, like larger, better effect on the grid than what they think. Right? So rather than just like talking about, just go there and show it. Right?

[00:47:59] - [Anjal Niraula]
I think that's been our approach. And that's what's needed, actually. I think you just need a few, you know, like risk takers to go out there and just do it, you know, and show it because, I mean, it's obvious, you've seen it happen elsewhere in the world, and I think our policymakers really need to see it. And, I mean, obviously, everybody's looking after the best interest of the country. We're coming at it from a lot of different angles.

[00:48:26] - [Anjal Niraula]
But if you can come together, meet at a place and look at the same sets of numbers, all of us, and then it's pretty sure we can come to a to to a right conclusion.

[00:48:37] - [Saurav Lama]
So now that we're coming towards the end of the episode, is there anything you would like to convey to our listeners? What is the Campower team up to these days?

[00:48:46] - [Anjal Niraula]
Thank you. Yeah. I think we I mean, are a bunch of engineers, so we we love to just go out there and do. So we've been doing projects all over the country, you know, we build microgrids. We're working also with a lot of smallholder farmers trying to see how we can mechanize some of the agricultural processes, introduce renewable energy into the mix because it's a sector which could do with a lot of renewable energy as well.

[00:49:17] - [Anjal Niraula]
We're trying to build solar rooftop projects, so yeah, there's a lot of stuff happening at our room, at our office, we've our own R and D team, this is exciting. Yeah, I mean, if you want to learn more about solar and all the work that you're doing, feel free to reach out to us. I think we're happy to collaborate on anything solar, anything energy, and if it's out of the box, yeah, Khanpower is, like, on Twitter.

[00:49:45] - [Saurav Lama]
And with that, we've come to the conclusion of today's episode. Thank you very much, Anjal, for graciously accepting our invitation to be a part of POS by PI. I wish you and the Kanpar team all the very best in your future endeavors, and I hope to hear lots of great things from your grips project. It was an absolute pleasure to have you on the show today.

[00:50:04] - [Anjal Niraula]
Thank you, Saurav, for having me. I think it's been a pleasure having this conversation, and congratulations to the PEI team on on this absolutely brilliantly hosted podcast.

[00:50:16] - [Saurav Lama]
Thank you folks for tuning in. Please join us again next week for another episode of Pods by PEI. Goodbye.

[00:50:26] - [Chhedon Kansakar]
Thanks for listening to Pods by PEI. I hope you enjoyed Saurav's conversation with Anjal where they discussed the potential and the many challenges for solar power in the Nepali electricity system. Today's episode was produced by Nirjan Rai with support from Saurub Lama, Kushi Hang, and me, Chhedon Kansakar. The episode was recorded at PEI studio and edited by Hridesh Sapkota. Our theme music is courtesy of Rohit Shakya from Jindabad.

[00:50:52] - [Speaker 0]
If you like today's episode, please subscribe to our podcast. Also, please do us a favor by sharing us on social media and leaving a review on Spotify, Apple Podcasts, and Google Podcasts, or wherever you listen to the show. For PEI's video related content, please search for policy entrepreneurs on YouTube. And to catch the latest from us on Nepali policy and politics, please follow us on Twitter at tweet to PEI. That's tweet followed by the number two and PEI.

[00:51:20] - [Speaker 0]
And on Facebook, you can find us at policy entrepreneurs inc. You can also visit pei.center to learn more about us. Thanks once again from me, Chhedon, and we'll see you soon in our next episode.