WEEK FOUR POSTINGS ON 'POLICIES'
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1. From: Bikash Pandey <bpandey@winrock.org.np>
Subject: [RETs] Week 4: Introduction to Week 4:
Policies
Date sent: Mon, 10 Dec 2001 10:08:33 -060
Welcome to Week 4 of the Renewable Energy for Mountains Discussion. In the past three weeks, there have been wide ranging discussions on three specific Renewable Energy Technology areas which are important for mountain areas. While we covered a number of topics, there was also a feeling that a lot of issues were left hanging - questions raised not always answered.
This week we will consider one set of issues - that of Policies conducive to promotion of renewable energy technologies in mountain communities of the Asia-Pacific region, hoping to wrap us some of the questions raised in the last few weeks. We will discuss policies of government, credit institutions, NGOs/CBOs, donor organizations, individual projects, and global climate change mechanisms - particularly how these policies affect promotion of RETs in mountain areas.
I will suggest that we keep discussions within the two broad areas so we can keep them focused. It would be best if opinions and analysis are backed up by actual examples of what works and what does not work.
1. FINANCING/ SUBSIDIES
*What is the justification of subsidies, is it to develop
markets, networks, information i.e. to prime the pump to be removed once the
market is working well; or is there justification to providing ongoing subsidies
to rural mountain communities since they are generally poorer than urban and
plains populations?
*How can ongoing government subsidies for fossil fuels (kerosene, LPG, diesel)
be compared with subsidies for RETs?
*When there are subsidies, is it important to maintain a level playing field
between different RETs? How is this practical between a range of options from
micro-hydro to solar to biomass and ICS?
*Are below-market interest rates the best way to subsidize RETs or up front
capital subsidies?
*How can credit best be provided, through government banks, through dealers,
micro credit institutions?
*Who should pay for R&D: governments, the market, donors, NGOs?
*How can donor funds be put to best use for large-scale expansion of RETs?
* How can international mechanisms such as the Global Environment Facility (GEF)
and the Clean Development Mechanism (CDM), which have been inspired by
international concern about climate change, be used to finance RETs in mountain
areas?
2. INSTITUTIONS
*What are the respective roles of government and that of the
market in 'scaling up' RETs so that they are available to large numbers of
users? How can quality and price competition be maintained? Should government
play a regulatory role, promotional role, or both?
*What is the role of Non governmental RET promotion organizations: supporting
communities to build projects, carrying out pilot projects, community
mobilization, developing market models, others?
*Who should promote productive 'end-uses' of RETs?
*Who should own and operate renewable energy enterprises?
Entrepreneurs, communities, local government? What is the role of Rural Energy Service Companies (RESCO's) in getting energy services to rural people?
I look forward to a vibrant and wide ranging discussion as we have seen in the previous weeks.
Bikash Pandey
Moderator - Week 4
2. From: "Bikash Pandey" <bpandey@winrock.org.np>
Subject: [RETs] Week 4: An Extract from the World
Bank's Policy Paper
Date sent: Tue, 11 Dec 2001 12:03:20 -0600
Here is a short writeup from the World Bank's Policy paper "Rural Energy and Development Improving Energy Supplies for Two Billion People". The World Bank is today the world's largest investor in renewable energy technologies, although it is not clear how much has gone into mountain areas. I would be interested to hear back from you whether you agree or disagree with the Bank's approach to Renewable Energy and your experience of "the right mix of supporting institutions, reforms, policies, markets, and infrastructure, based on the country and circumstance" for mountain areas of the Asia/Pacific.
Bikash Pandey
Moderator - Week 4
------------------
Rural and renewable energy development is not just about energy. Fundamentally, it is about improving the quality of life of rural households and facilitating rural income generation; it is about protecting the at-risk forest cover in our client countries as well the global environment. These are not new objectives, but the old approaches have not worked well... Within the Bank, the Rural and Renewable Energy Thematic Group consists of staff members who are interested in addressing these objectives. Some of the main issues confronting the Thematic Group are:
*How do we accelerate rural electrification in a sustainable manner?
Around the world, nearly two billion people do not have electricity; the problem is particularly severe in Africa where, in most countries, less than ten percent of the rural population has electricity supply.
*How do we promote the sustainable supply and efficient use of traditional fuels and the transition to modern fuels in rural areas?
Without an effective solution, rural people in many parts of Asia and Africa will continue to use burn fuelwood, which gets harder and harder to gather over time and also poses a threat to the local forest cover.
* How do we expand the share of renewable energy, taking account of both its cost competitiveness as well as global environmental concerns? Around the world, the potential is large, and the interest in exploiting is high, but progress is being impeded by a number of key barriers.
Based on the lessons learned so far, one of the main guiding principles is that it is not enough to focus just on "energy" issues; rather, rural and renewable energy development needs the right mix of supporting institutions, reforms, policies, markets, and infrastructure, based on the country and circumstance. This includes the right pricing structures, efficient power sector management, viable lending institutions, credible regulatory policies and solid legal frameworks.
3. From: "Bikash Pandey" <bpandey@winrock.org.np>
Subject: [RETs] Week 4: Current Subsidy Policy for
Renewable Energy in Nepal
Date sent: Tue, 11 Dec 2001 14:30:01 -0600
Please visit the webpage at http://www.mtnforum.org/apmn/subsidy_for_RE.htm to read the Alternative Energy Promotion Centre's current subsidy policy for Renewable Energy in Nepal. Those without Internet access may request the same as an email attachment by writing directly to <apmn@mtnforum.org>.
The current policy has been in force for about a year. You will note that different technologies have different kinds of subsidies and there is progressive subsidies which favour smaller units (solar and biogas) and those in more remote mountain areas (solar, biogas, micro-hydro). On micro-hydro there is also a subsidy for rehabilitation. Participants from Nepal may wish to send comments on their experience with using the subsidy policy; other participants may wish to compare policies in their own countries and suggest improvements.
Bikash Pandey
Moderator - Week 4
--------------------------
* Subsidy policy document: http://www.mtnforum.org/apmn/subsidy_for_RE.htm
* For attachment, pls. contact: <apmn@mtnforum.org>
4. From: "Bikash Pandey" <bpandey@winrock.org.np>
Subject: [RETs] Week 4: Mechanisms to finance RET
Projects through Climate Change Mechanisms
Date sent: Tue, 11 Dec 2001 15:07:38 -0600
There are in place a number of Climate Change Mechanisms which can be used to finance renewable energy projects in mountain areas. The Global Environment Facility is the oldest of these mechanisms and has funded among others the Hilly Hydro Project in India. In general, while mountain areas have been able to develop a number GEF projects for Biodiversity, they have been less successful in developing Climate Change Projects.
The Clean Development Mechanism under the Kyoto Protocol is a new mechanism which can be used to fund RET's. Short summaries of the GEF two recent manifestations of the CDM are given below.
All of these mechanisms rely on the principle that in addition to substantial local benefits, RETs also provide global benefits, namely the reduction of greenhouse gases (GHG) which threaten to warm up Planet Earth. RETs substitute the burning of fossil fuels which emit GHGs with renewable sources - which are ultimately powered by the sun. In principle, the payment which the global community is prepared to make for these global benefits can be used to fund RETs.
It would be great if participants could share both successful and unsuccessful experiences in accessing these global funds to finance RETs. Participants may also wish to critique this method of funding projects.
Bikash Pandey
Moderator - Week 4
----------------------------
The Global Environment Facility (GEF)
The Global Environment Facility was established to forge international cooperation and finance actions to address four critical threats to the global environment: biodiversity loss, climate change, degradation of international waters, and ozone depletion. Related work to stem the pervasive problem of land degradation is also eligible for GEF funding.
Launched in 1991 as an experimental facility, GEF was restructured after the Earth Summit in Rio de Janeiro to serve the environmental interests of people in all parts of the world. The facility that emerged after restructuring was more strategic, effective, transparent, and participatory. In 1994, 34 nations pledged $2 billion in support of GEF's mission; in 1998, 36 nations pledged $2.75 billion to protect the global environment and promote sustainable development.
The GEF can succeed in its global environmental mission only as part of a worldwide movement toward sustainable development. GEF brings together 166 member governments, leading development institutions, the scientific community, and a wide spectrum of private sector and non-governmental organizations on behalf of a common global environmental agenda.
Source:
http://www.gefweb.org/What_is_the_GEF/what_is_the_gef.html
---------
The Prototype Carbon Fund (PCF)
Recognizing that global warming will have the greatest impact on its borrowing client countries, on July 20th, 1999 the Executive Directors of the World Bank approved the establishment of the Prototype Carbon Fund (PCF). The PCF, with the operational objective of mitigating climate change, aspires to promote the Bank's tenet of sustainable development, to demonstrate the possibilities of public-private partnerships, and to offer a "learning-by-doing" opportunity to its stakeholders.
Objectives: What Does The PCF Produce?
1. High-Quality Emission Reductions
The PCF funds projects that produce high quality greenhouse gas emission reductions which could be registered with the United Nations Framework Convention on Climate Change (UNFCCC) for the purposes of the Kyoto Protocol. To increase the likelihood that the reductions will be recognized by the Parties to the UNFCCC, independent experts provide baseline validation and verification/certification procedures for emissions reductions that respond to UNFCCC rules as they develop.
2. Knowledge
By transacting the business of reducing greenhouse gas emissions, the PCF is developing a knowledge base of business processes and practice to facilitate climate-friendly investment and inform the ongoing UNFCCC negotiations. PCF is pioneering approaches to achieving environmentally credible emissions reductions beginning with defining baselines for more climate-friendly activities to verification, certification, and transfer of emissions reductions achieved.
The analyses, independent opinions, and contracts which underpin this process will be made public, along with lessons learned.
3. Public-Private Partnership
Finally, PCF resources are provided by both the public and private sectors. The PCF demonstrates how insights and experience from both sectors can be pooled to mobilize additional resources for sustainable development and address global environmental concerns. The active participation of both sectors ensures that the PCF operates efficiently and in accordance with the Kyoto Protocol while serving the interests of World Bank client countries.
Source:
http://www.prototypecarbonfund.org/router.cfm?show«out.cfm&Itm’
-------
The Netherlands CDM Fund
CDM is one of the three flexible mechanisms agreed in the Kyoto Protocol under the UN Framework Convention on Climate Change (UN FCCC) in 1997. The political agreement reached in Bonn at the resumed sixth Conference of the Parties to UN FCCC in July 2001 included an international agreement on the general approach as to how these flexible mechanisms could be made operational.
In Kyoto the Netherlands committed itself to the target of reducing its greenhouse gas emissions by 250 Mtonnes CO2-equivalent in the 'budget period', i.e. 2008-2012. The Dutch government has agreed that half of this reduction should be achieved within the Netherlands itself and the other half; 125 Mtonnes CO2-equivalent could be achieved in other countries through the flexible mechanisms: Joint Implementation (JI), the Clean Development Mechanism and International Emission Trading (IER). The Netherlands is one of the first countries which has earmarked public funding for JI and CDM.
The CDM Division was set up in April 2001 as part of the International Environmental Affairs Directorate of VROM. The function of the Division is to use the funds allocated by the Dutch government to purchase Certified Emission Reductions (CERs) in developing countries while contributing to the sustainable development of these (non-Annex I) countries in a cost-effective manner. Because the budget involved is large and because strict rules must be applied in spending this money, various organisations are presently being approached to act as intermediaries for purchasing CERs. These organisations select sustainable projects in developing countries, under the direction of VROM, and purchase Certified Emission Reductions (CERs) on behalf of the Ministry. These organisations then acting under the Ministry's responsability, can be classified into four types:
Type 1: Multilateral international financial institutions such as the World Bank and regional development banks.
Type 2: SENTER International. This Dutch semi-governmental organisation will organise a call for CDM tenders - CERUPT - along the lines of the JI tender ERUPT, which will be opened on 1 November 2001. Website SENTER Internationaal
Type 3: Private financial institutions
Type 4: Bilateral purchase-agreements with Host Countries
Source:
http://www.vrom.nl/pagina.html?id’gotoR58&site’w.cdminfo.nl
5. From: "ishara mahat" <ishara_m@hotmail.com>
Subject: [RETs] Week 4: Re: Mechanisms to finance RET Projects through Climate Change Mechanisms
Date: Tue, 11 Dec 2001 22:13:17 +0545
Dear colleagues,
While I do agree with the World Bank's approach on RET policies, like markets, reforms, infrastructure, and
institutions, I still miss the bottomline: the process
whereby socio-cultural aspects such as gender are included.
Since the World Bank has rightly pointed out that, rural and renewable energy development is not just about energy,
but about improving the quality of lives of rural households, I think it is quite practical to have a broader
policy framework that incorporates not only financial, technical and institutional aspects but also socio-
cultural aspects that help us focus on local people's needs and priorities.
Any energy intervention remains has less chances of succeeding in the long term, if it fails to respect
the local cultures and indigenous values. This is the reason we could notice for low adoptability of RETs by
the local people, especially the women who are the primary users, managers and beneficiaries of rural
energy. The issue is not the low level of skill of the local people in adopting RETs but low level of
skill and knowledge on the part of planners and policy-makers placing less or no emphasis on socio-cultural
issues.
If there is a clear policy framework which reveals the socio-cultural issues apart from others, it could be
easier for the implementing organizations to become
more transparent on this aspect.
Thanks
Ishara Mahat
6. From: "Ajay Sharma" <a.sharma@cqu.edu.au>
Subject: [RETs] Week 4: Suggestions on RET Promoting Policies
Date: Tue, 11 Dec 2001 18:37:49 -0600
Dear Friends,
Present silence about the policy issues reveals a reality that most of the mountain workers are so engrossed with
their local issues that they either they feel that issues as well as methodologies in their region are too typical or
they do not get time to churn out macro-level policy interventions. Let me try.
The major issue under discussion is subsidies. I feel the subsidy cannot go away. I do not want to search for
any logic or parallel cases from other sectors. But the
simple reason is economics. If we want rural masses to adopt something, which has slightly more hassles, slightly
high maintenance cost, and slightly more effort involved in comparison to a no-cost common resource fuel or a
well established commercial technology, the deal has to be made attractive. Like sugar-coating a bitter medicine.
Secondly the Planners and Agencies should differentiate between a scheme as well as subsidy structure for RETs in
the plains and in mountains. One time subsidy has at times bred corruption. Can we think of promoting multi-stage
subsidy or material subsidy? Any more suggestions would make it un-realistic because at ground level, corruption
has hijacked all subsidy structures. Only thing that can be done is to provide a provision for a very flexible
subsidy system. Let the local authorities decide what type of subsidy would suit the region and target population
(I am dreaming of honest authorities/ workers/ NGOs).
There arises a role for RESCOs, which will be commercial companies that can best help commercial ventures and no
social work. Can we think of our various departments putting up integrated development model? That means, to support a
RET scheme in a region of biomass crisis or threat to natural resources, can Dept. of cottage industries, health,
transport, education, agriculture, put in supporting schemes in place? Say for example, we want to promote biogas in
some region. Would forest dept put in pasture development scheme there, or Agriculture department promote better crops,
would Public Works Dept. install more number of hydrams there? Without the supporting schemes, no RESCO will take
up social work and even their commercial ventures would always be threatened.
Govt. agencies will have to adopt integrated approach and will have to address the issues in totality, as the
successful NGOs do. The NGOs go with one agenda but offer so many things and ultimately link all their agendas with
livelihood and overall development. I am anticipating that authorities will not do such drastic things for RETs but
for natural resources (conserving forests, reducing possibilities of land slides, checking erosion of glaciers,
reduce silting of dams, etc.), major steps can be taken in mountains and biomass technologies and RETs can be a part
of the major effort.
Also the extension program for the technologies has to be intensive. I agree that there are commendable examples
generated independently by individual Govt. agencies as well as NGOs and even individuals alone. But most of those
success stories were restricted either to geographical niches or with the presence of the motivator. There is some
resistance to every process, including the best intended social as well as technology program. To counter the
resistance for long and with sufficient intensity, I would suggest a larger role for Anganvadi (an informal vocational
education program), Adult education program, Mahila Mangal Dals (Ladies clubs) or Youth clubs. These groups can be
much more effective than any other instruments being used. We have to be tactical in generating leadership for RETs
promotion. Do not depend on printed literature or a few video shows. Live demonstrations and operations are much more
convincing. Depending on the stress factor, suitable tools of extension may be used.
I should probably stop here for a while and wait for reactions.
Bye for now
Ajay Sharma
------------
Moderator's Comments:
Dear Ajay Sharma,
Thank you for your posting. I was beginning to think that no one was interested in policy! As a response to some of
your points:
1. One of the problems with continuous subsidies is that it is only fair to give it if you can give it everyone.
Where will the money for this come from? Donors are reluctant to give subsidies for ever and governments will often not
have resources. At the same time, although many projects often convince themselves that one time subsidies will lead
to market development, most projects find themselves giving a series of one time subsidies since the product is not quite
commercially viable at the end of the period.
As you suggestd, perhaps a multi-stage subsidy plan is sound. A very good project like the Biogas Support Programme in
Nepal is decreasing the subsidies over multiple project periods. time as the product comes down in price, with
competition and volume. Interestingly, one positive effect of continuing the subsidy program over a long time is that
it gives a reason for the construction companies to all follow one set of quality standards which can be enforced. Leaving
everything to the market, as we often do with solar water heaters results in competition only on the basis of price
and a decline in quality.
2. The issue of integrating promotion of RET's with other sectors is rather more complicated. While it appears desirable,
there are no clear ways to make departments cooperate with one another. This is not only in mountain areas or in
developing countries, it is a universal problem. The second best approach which may be more practical is to try
and make markets work better so that supply can go where there is demand. This can be done by identifying and in some
cases creating demand, through information dissemination or carrying out pilot installations and improving supply by
quality control, ensuring effective competition, and supporting credit structures.
-Bikash Pandey
7. From: "Stewart Craine" <Stewart.Craine@hydro.com.au>
Subject: [RETs] Week 4: Micro Credit and RETs
Date: Wed, 12 Dec 2001 21:30:31 +1100
Probably the most successful recent demonstration of rural electrification, particularly with micro and mini hydro,
can be found in China. One book I noticed showed rural electrification levels rising from 5% to 90% from 1960-1990
(my memory could be a little off here). Yet there seems to be little literature available to read about this. Could I
suggest that Western models of rural electrification may not always be the best solution, and that there might be a great
deal to learn from the Chinese model? Social issues were not ignored either - the policy was to increase rural industries
without increasing migration to the cities, and from all
accounts, it worked. Does anyone have details on Chinese rural electrification, especially their extensive MMHPs?
A comment on the moderator's reference to village-based credit institutions:
These small projects [biogas, SHS, ICS} are not generally interesting for commercial or even development banks because
of the high transaction costs. This would require education to the savings and credit societies on the new products
and also an extension of the credit line from outside banks or an association of similar societies. For more capital-intensive projects such as a larger micro-hydro plant,
village-based woulc not be sufficient and credit from a bank in a nearby town would be needed.
I had the opportunity to work with micro finance specialists while working on micro hydro, and through the exchange of
knowledge, came to some interesting conclusions. A larger micro-hydro plant or mini grid could benefit greatly by offering
micro credit, especially if loans are made for daytime productive end use equipment. Tariffs need to be collected
and saved to replace large MHP components in 10-15 years time, like the penstock or turbine runner, but there are few large
expenses in the first 10 years. Interest from loans (at 15-25%, compared to traditional lending rates of 40-60%) will compound,
and this will form another significant source of income for the MHP.
Micro credit institutions require a "spread" of interest of about 15% to sustain their operations - if savings collected
are given 10% interest, loans should be given at 25%. However, village electrification systems have tariffs, not savings,
for which no interest needs to be paid. Therefore, the loan rate can be 15% instead of 25% with no reduction in viability.
Therefore, a village electrification system giving micro credit facilities are mutually beneficial - stronger together
than one or the other alone.
Finally, the micro credit industry finds it difficult achieve success in the hilly areas due to more scattered communities
and slower transportation (leads to longer collection periods and higher overheads). By combining tariff collection and loan
collection, this issue can be addressed, and help micro credit benefits spread into the hills.
Mr Devkota's comment on the need to review progress as well as process is interesting, and more so if one looks at history.
From 1995 to 2000 (please correct if inaccurate), there was a much lower subsidy available for RETs in Nepal. Now there
is a larger subsidy. What technologies progressed well without the subsidy??? I believe there were still strong sales of
peltric sets (MHPs of 1-5 kW) that required less capital. Also, solar home system sales continued to grow, but larger micro
hydro systems were rarely installed by villagers (usually with significant external assistance from NGOs). Now larger plants
are being installed and receive generous subsidies. Will this be for short term progress, only for installations to drop
again when/if the subsidy is removed, leaving white elephants across the country and a lot of unhappy villagers? Were there
ways to maximise the popularity of unsubsidized systems and help villagers move from small unsubsidized systems to larger
unsubsidized systems? When there is progress in an industry sector and little in another, is it not more sensible to help
the industry that is progressing and maximise its efficiency?
These are not question limited to developing countries. I am currently assessing the viability of a state government here
in Australia subsidizing a tidal plant, which is more expensive than other renewable options. The state government, like all
governments (I hope), are trying to ensure the fixed pot of subsidy available generates the maximum benefit, and is not
wasted on relatively expensive RET projects. This would limit the progress of the renewable energy industry.
-Stewart Craine
8. From: "Sjoerd Nienhuys" <nienhuys@dutch.nl>
Subject: [RETs] Week 4: RE: An Extract from the World Bank's Policy Paper
Date: Wed, 12 Dec 2001 09:43:29 -0600
In my submission of 20 November I already outlined 10 interlinked issues that are relevant to the successful
application of RETs. However, those were merely technical and operational towards a sustainable local RET
application.
To that extend I do agree with the WB outline, however, the text quoted below is rather short to cover the more
complex issues. The statement merely says that solutions should be appropriate. Unfortunately the statement only
looks at the Two Billion people and not to the other Four Billion who are consuming the resources.
We have a saying: "It gives a better feeling mopping-up water from the floor when you know someone is closing
the water tap."
Meaning: We can work hard on one side of the problem, but you have to do something on the other side of the
problem as well.
The WB and the UN are in the best positions to deal with the other side of the energy problem (the consumption),
including:
-continuing population growth, asking for every child born for over fifty years more and more energy.
-energy guzzling habits in very wealthy countries.
-lack of enforceable policies and strategies in the wealthy countries to reduce the excessive energy consumption.
-pressing for more oil and fuel output to keep the fuel prices low.
It would be good to use the power they possess.
Sjoerd Nienhuys
--------------
Moderator's Comments
Dear Sjoerd Nienhuys,
I went back and looked at your submission of Nov 20th and did indeed find many issues that are relevant to
this week's discussion. Let me revisit some of them here.
1. Quality control of RETs. As you point out rural people particularly in mountain areas require long lasting
and high quality products. Who is in a position to enforce quality standards? You have suggested consumer organizations
play this role. I know this works in Western countries where customers are educated and where information on
products is available and reliable. It would be great to hear about examples of them also working in rural mountain
areas of developing countries.
As an alternative to this, we have some good examples in Nepal where the organization providing the subsidy on
the RET also does the quality control such as the Biogas Support Program. He who gives the carrot also yields the
stick! Government departments often fail in running good RET promotion programs because while they can give out
subsidies they seem less able to be strict about enforcing quality. This results in poor quality products which the
consumers do not value highly and need continued high subsidies to promote. Autonomous organizations for whom
continued funding of the project is linked to good performance, have generally done well.
2. Credit. The idea of using village-based credit models to finance RETs is a good one. Many mountain communities
are now-a-days already involved in some savings and credit schemes. Many NGOs are promoting these projects. People
save their own money jointly in a group and members can borrow from the pool to repay with interest. However, most
of the loans given out from such pools are for directly productive purposes, raising goats, growing vegetables or
fruit. The products can be sold and the money repaid in a relatively short time, generally within a few months.
Most investments into RETs continue to be for purposes
which have much higher periods of returns: improved health, better education for children, reduced drudgery...
Still a certain percentage of village-based credit might go to small-scale RETs such as solar home systems, family
biogas, or for Improved Cook stoves if required. These small projects are not generally interesting for commercial
or even development banks because of the high transaction costs. This would require education to the savings and
credit societies on the new products and also an extension of the credit line from outside banks or an association
of similar societies. For more capital-intensive projects such as a larger micro-hydro plant, village-based
would not be sufficient and credit from a bank in a nearby town would be needed.
3. Training and education. I agree with you on the need for extensive and continued training of users, both men
and women, as well as installers. There does not seem to be a short cut around it. The best RET projects have figured
out how to do this at relatively low costs. Luckily this is one area where most people agree a subsidy is justified
for. Improved Cook Stoves are often provided subsidies only for training.
4. On the subject above, I doubt whether the World Bank or UN can regulate a reduction in energy consumption
of wealthy countries. I would suggest this will come only through energy taxes, such as for carbon, coupled with
enlightened activism within the countries of the North.
Best regards,
-Bikash Pandey
9. From: "UCS" <ucs@mail.com.np>
Subject: [RETs] Week 4: 4th Week Discussion on RETs
Date: Wed, 12 Dec 2001 10:09:46 -0600
The development and dissemination of RETs is very important for achieving the national objective of
alleviating poverty as stipulated in the 9th five-year plan. For effective development and dissemination of
RETs, appropriate and effective policies need to be formulated and should address issues such as RETs in
rural development and physiographic regions, technology-based, incentives to manufacturers, skill development,
involvement of rural communities from planning to
implementation process and appropriate methods of mobilising financial resources. Subsidy policy should
be affordable and based on socio-economic and demand
considerations of local people but not to the demand of the donors. However, I observe that the present
situation of RETs in Nepal is that there is subsidy money but there is no easy flow mechanism especially
for micro-hydro.
The flow mechanism and implementation process should reach the rural poor through effective media. I
have noticed that for micro-hydro, there is attractive
subsidy and motivated organisations for the entire process and there is good demand as well but still the progress
is quite low in comparison to the past few years. I felt that it is high time to review the progress as well as the
process. I wonder, whether it is good investment in solar energy technologies as it can replace investment cost of
owners within a couple of years. However, it is very much effective in case of biogas in Nepal.
Govinda Prasad Devkota
10. From: "tberg" <tberg@aepc.gov.np>
Subject: [RETs] Week 4: Role of NGOs in the promotion of Microhydro in Nepal
Date: Wed, 12 Dec 2001 16:13:17 -0600
This is an attempt to discuss and raise a few issues regarding the role of institutions, notably NGOs in the
promotion of micro-hydro (MH) in Nepal. The views presented are personal.
Before getting to the core issue, i.e. the role of NGOs in RET promotion in Nepal, here is a small historical
perspective:
The so-called NGO sector in Nepal is somewhat different from that of other countries in the region in that it has only to
a limited extent come about as a result of popular struggles, opposition forces or social reform movements. Most NGOs have
only been active for less than a decade, since the introduction of multi-party democracy in the early nineties. As a result
NGOs, with notable exceptions, are not traditionally embedded in local structures; they are often - even if they do have
a local presence - represented by 'outsiders' and they do not always act as articulators of local interests. Often their
activities are driven by donor's agendas and the NGOs are often deliverers of services.
This is not to be negative about the NGO sector in Nepal but to acknowledge that it is a nascent scene that is indeed
increasingly becoming less donor oriented and more autonomous, not least because of Nepal's policies of decentralization that
increasingly assign roles to NGOs at District and Village Development Committee level. In this setup, NGOs often
represent attractive options for enhancing the outreach of central level RET promotion agencies.
Not surprisingly, experience in Nepal shows that not only is increased outreach and extension central to scaling up the
dissemination of micro-hydro installations, it is also crucial to the sustainability of plants, new and existing. The more
remote a plant is from support structures, be they technical or simply in the form of human resources who can give counsel
and information, assist in resolving conflicts, act as financial, social etc. intermediaries, the higher the chances
of technical and/or institutional failure.
In the context of micro-hydro promotion it is mainly as deliverers of service that we should consider NGOs important.
Not only because that is what many NGOs at this time in history are good at, but also because - unlike other typical
NGO activities such as human rights, land reform, gender and empowerment issues in general - electricity generated from
micro-hydro should be considered a service. The micro-hydro promotion field, however, does involve issues that are
central to typical NGO comparative advantages vis-a-vis government agencies, appropriate technology promoters and
those RESCO's that Ajay Sharma assign important commercial roles in RET promotion, namely those 'soft' issues that
may be categorized under headings such as social mobilization, social capital development, counseling and acting as
intermediaries.
These are issues that RET promoters - who have in the past been rather technology focused - increasingly consider
crucial to the sustainability of community owned micro-hydro plants in particular which, in essence, do not differ
from other community run utilities/facilities such as water supply or irrigation, i.e. areas whose sustainability have
long been associated with local ownership and existing degrees of social capital. The leading micro-hydro promoters
in Nepal including the UNDP's Rural Energy Development Programme (REDP) and the Alternative Energy Promotion
Centre's (AEPC) Energy Sector Assistance Programme (ESAP) realise this and carry out a great deal of 'soft' activities
through NGOs.
However, the number of NGOs in Nepal with capability to promote micro-hydro remains very small and contrasts with
the priority and attention given to electrification by RETs by government and donors alike. In this context it is
interesting to note that while a decade ago, NGOs were hardly involved in any development activities, they are now active
players in irrigation, drinking water, health and agriculture and it would be difficult to imagine these activities to
which NGOs add organizational, social mobilisation, and institutional skills without NGO involvement.
Thus, the vision on the part of micro-hydro promoters should be that in a few years from now a substantial body of NGOs
will have built up the capacity and skills similar to what they possess in related sectors, and by virtue of that have
taken on roles in local support structures as promoters of micro-hydro development, along the lines of their comparative
advantages.
It needs to be realized though, that these NGOs will only form part of the required support structures at local level
and that the real challenge is to re-orient NGOs to become true change agents, rather than purely project implementers.
Many NGOs have a tendency to 'do projects' and try to enhance local credibility through sometimes unnecessary allocation
of resources, material or human (i.e. by posting relatively expensive social mobilisers for lengthy periods in
communities), rather than trying to activate existing community resources. For scaling up of micro-hydro dissemination with
the help of NGOs to be effective it would be a good idea if
the latter considered taking more of a back-seat, and adopting flexible approaches to providing assistance. This might not
only prove more cost-effective, it might also be more sustainable in the longer run.
This is not to contradict what I have already said about the importance of social mobilization and ownership feelings,
and its bearings on sustainability. Rather the point here is that the extent to which communities require outside
assistance varies, depending on what is broadly defined as the level of existing social capital. NGOs should design
their intervention strategies accordingly, instead of following blueprints. It is my impression that a great deal
of potential micro-hydro communities, particularly those that are not extremely remote, would be able to realise their
plans if simply given assistance in making linkages with manufacturing companies, consultants, banks and in sorting
out paperwork and required legal matters.
In cases where social capital is insufficient NGOs would obviously need to consider more intensive approaches.
However, even in such cases, instead of posting outsiders for extended periods of time in the community to
'do participation', everyone concerned might benefit from an approach where the NGO tries to make suitable matches
with existing community-based organizations and institutions, traditional or new, and truly attempts to utilize local
human resources rather than create parallel institutions.
Another aspect where micro-hydro promoting NGOs might need re-orientation and adopt more flexibility is with
respect to mode of ownership of micro-hydro plants. The development paradigms of the past decades that have to
a large extent favored community ownership and management of utilities and resources is very much part of the approach
of NGOs. This poses a challenge for RET promoters for whom the end-goal is to see increased levels of electrification
and associated improvements in quality of life and productivity.
While Nepal does present examples of effective community management and ownership of micro-hydro plants, there are
even more examples of effective entrepreneur driven plants where - in addition to providing lighting to people -
load factors are also high due to the presence of small industries. Whether NGOs - given their present mandate to
work 'for people'will be able to also service the needs of individual entrepreneurs is a challenge to RET promoters.
However, paradigms change and so do NGOs.
Torsten R Berg
Micro-hydro Adviser, Energy Sector Assistance Programme
11. From: "Stewart Craine" <Stewart.Craine@hydro.com.au>
Subject: [RETs] Week 4: RE: Response from the Moderator
Date: Thu, 13 Dec 2001 19:29:03 +1100
[For the inspiring story of the late Chait Singh who brought a microhydel to his village of Malari in India,
please visit posting no. 32 at <http://www.mtnforum.org/apmn/hydro4.htm>
You may also request the same as an attachment by writing directly to <apmn@mtnforum.org>.
-MF-Asia Moderator]
------
In reference to the moderator's statement:
<CLIP>
Most NGOs working in this field sooner or later come to the conclusion that one strong committed leader in the
community counts for more than many years of NGO input.
<CLIP>
HOORAY!
I propose a new measure which should be included in rural programs of any sort:
CPI - not consumer price index, but Committment to the Point of Insanity!
A good example is the man from Barpak, I believe, who went to the bank 103 times before his loan for a micro hydro was
finally approved. We also heard in week 1 about Chait Singh in Uttranchal, who, despite his passing away, has inspired
the community to push forward, no matter the obstacles. How can policies help find and encourage such people? "Free"
feasibility study grants, and teams of young, enthusiastic (and cheaper) engineers to help the village entrepreneur?
If we can ever measure CPI, I am sure it will be high in villages that have functioning programs or RET systems many
years after it was first initiated.
-Stewart Craine
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