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K&A at the Power Summit 2023

The 2023 Power Summit held in Kathmandu was the largest event of its kind in the country, with over 800 participants attending from 25 different countries. The summit featured 15 sessions with more than 80 speakers, covering a wide range of topics related to the power sector. The summit, which takes place every three years, aims to help develop Nepal's power sector by providing a great opportunity for policymakers, industry leaders, investors, and experts to talk about sustainable energy solutions, market trends, technological advancements, and investment opportunities. As a sponsor, K&A Engineering had the opportunity to showcase their expertise in the field of electrical engineering and network with other industry leaders and experts.

This year, the summit revolved around the theme: Broadening Green Energy Markets. With this in mind, conversations, discussions, and sessions naturally gravitated towards Nepal's hydropower abilities.

Nepal has huge hydropower potential calculated at approximately 83,000 MW, and only a small fraction (2500MW) of this has been developed. However, with over 5000 MW in various stages of development over the next 5–10 years and tremendous potential waiting to be tapped, hydroelectric power generation is a strategic sector for Nepal to aid economic development and revenue generation.

Over the course of two session packed days, industry experts, researchers, government officials, investors along with various other key stakeholders discussed a plethora of industry relevant topics ranging from future hydropower markets for Nepal, regional geopolitical interests, ways to broaden the scope of green energy markets, energy security, open access, financing, resource mobilization and shaping the future of power infrastructure in the country. They also explored other forms of renewable energy, such as solar, wind, and geothermal power, which could provide a more diversified and sustainable energy mix for Nepal.

Over the course of 15 sessions, the Power Summit provided valuable insights into Nepal's energy sector and how it can transition towards a more sustainable future.

Among the 80 speakers at the conference, K&A's Engineering Manager (Nepal), Prabal Bhattarai, presented a compelling case for the integration of Distributed Energy Resources (DER) into Nepal's electrical grid. He highlighted that, while Nepal is yet to initiate policies and procedures related to DER integration, DER technologies could help build resilience and balance electricity generation during demand peaks and valleys. He delved into how investing in DER could also create cost saving opportunities and could help cater local demands while firm bulk hydro generation could be exported resulting in higher revenue. Prabal's presentation was a great reminder of the importance of embracing new technologies and adapting to changing circumstances.

Short summary and key takeaways from the summit:

Domestic Demand Development:

  • Nepal already has a seasonal surplus and may have a year-round surplus by 2025.
  • Installed capacity may cross 7000 MW by 2027.
  • Demand growth in the last five years has been over 15% and may continue for an extended period.
  • With electric vehicles, E-cooking, and industrial demand requiring revolutionary policies, Nepal must refuel the next phase of demand growth.

Regional Market:

  • Countries and companies are targeting aggressive net-zero plans, with India aiming to achieve it by 2070 and Bangladesh by 2045, while Bhutan by 2030.
  • India has a market for Nepal's hydropower, fueled by decarbonization goals. However, solar and wind power can only meet 70 to 80% of electricity demand, leaving room for hydropower.
  • Bangladesh will also be a key market due to its fossil fuel dependence.

Policy and Regulatory Certainty:

  • The summit discussed how long-pending policy measures hurt investor sentiment and need to be fast-tracked. Open access is expected to play a pivotal role in driving the hydropower sector growth; the Nepalese industry demands it.
  • The new electricity act is a multi-buyer multi-sector model and licensing of trading activity.
  • Well-defined cross-border power trade policy is needed.
  • A strong and autonomous regulator is needed to support the private sector.

Financing/Business Model:

  • The Minister of Finance has stated that the government of Nepal and the Ministry of Finance will do everything to support investors in terms of incentive structures, concessions, and exemptions.
  • However, green financing for the private sector is still not accessible in Nepal.
  • The summit emphasized the need for a mix of long-term and short-term contracts.
  • Solar-hydro bundling may be beneficial from an off-take standpoint. Transmission projects need to be fast-tracked to create an enabling environment.

Most Important Challenges:

  • Geopolitics is affecting regional interest and energy security.
  • Resource nationalism, non-reciprocity, constructive unilateralism, transcending geographical boundaries, and sound diplomacy were emphasized.
  • Adopting a developmental approach rather than a market-based approach is important, but there is a lack of political will.