Ebook Financial and Economic Analysis of Micro?Hydro Power in Nepal
About 84 percent of the people in Nepal live in rural areas and rely on agriculture as their main source of income. They depend on traditional sources of energy such as fuel-wood and agriculture residue for their daily energy supply. The excessive and unsustainable use of these energy sources has resulted in low agricultural productivity, deforestation and soil-erosion, which create imbalances in natural eco-system.
To enhance the economic welfare of people in the rural areas, it is necessary to increase agricultural productivity and promote the development of rural enterprises. Both these approaches depend highly on the accessibility of commercial sources of energy. Considering the precarious political and economic situation of Nepal and taking into account various available natural resources in the country, only those commercial energy sources which are economically, environmentally and socially/politically justifiable should be sought after and promoted.
There is a high potential for the utilization of hydropower in Nepal and considering that the rural communities are isolated and scattered, micro-hydro (MH) systems serve as a viable alternative as an energy source. The promotion of MH system is expected to positively impact social welfare through improvements in health and education. In terms of economic welfare, energy from MH system is expected to be beneficial for both producers and consumers in rural economies via the opportunities to create links between them and the national economy. However, the establishment of these MH systems requires considerable resources, so, it is necessary to evaluate the systems’ economic desirability to gather its net welfare effect on the rural population.
Contents
Executive Summary
Background
Energy in Rural Nepal
Micro?hydro Power
- Introduction
Technical Aspects
Micro?hydro Power Development in Nepal
- History and Present Situation
Subsidy Scheme
Major Organizations Involved
Financial and Economic Analysis of Micro?hydro (MH) System
Daunekhola MH System
Tikhedhunga MH System
Angakhola MH System
Financial Analysis
Aggregation of Financial Cost and Revenue
Economic Analysis
Summary of the three MH Systems
Concluding Remarks on Micro?hydro Development in Nepal
References
Appendix
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