Many countries around the world prefer not to depend on a single source of energy. An energy mix is considered to avoid complete blackout in case of failure, or deficiency, of one source of energy

A solar-powered power plant is proving to be a vital source of energy for many countries. In Nepal, too, solar power projects are gaining momentum. After hydropower projects, the second highest number of survey licenses have been issued for solar power projects.

There are many reasons for promoting solar power plants in Nepal. One of the major factors could be the minimal civil structures involved in solar power plants as compared to hydropower plants, which possess higher risk of damage during an earthquake. So during natural disasters, such as an earthquake, flooding or landslide, solar power plants could be a lifesaving source of energy. Due to its minimal civil structures, it could be revamped within a few months. Another concern is the depletion of water in snow-fed rivers due to global warming, which affects the energy production of hydropower plants.

In May 2018, the government released a white paper, with a target to produce 15,000 MW of electricity in 10 years. To achieve such an ambitious goal, large-scale solar power plants need to be developed as they can be commissioned in 2-3 years whereas a hydropower plant normally takes 7-8 years. Hence, the government should not underestimate the capacity of solar power plants. With increasing innovation, economy of scale and growing popularity, solar panels could see positive outcomes in terms of efficiency, capacity, characteristics and price.

For example, bifacial panels are gaining popularity, and recent research has shown that their efficiency could reach up to 30 per cent. One of the leading consulting firms, namely “Wood Mackenzie”, forecasts that spot prices for modules could fall from $0.30 per watt-DC in 2018 to $0.18 per watt-DC in the next five years, a 40 per cent drop.

Recently, a group of economists and mathematicians at Oxford University found convincing evidence of learning-curve effects across different products, including photovoltaic cells, whereas in the case of PV cells, it’s quite steep: for every doubling of output, cost falls by over 20 per cent. It is certain that the cost per MW of solar power plant will decrease rapidly.

Another reason to opt for solar energy is energy mix. Many countries around the world prefer not to depend on a single source of energy. An energy mix is considered to avoid complete blackout in case of failure, or deficiency, of one source of energy. For example, in the case of Germany, the share of energy sources in gross German power production in 2018 was: renewables (34.9%), lignite (22.5%), hard coal (12.9%), natural gas (12.9%) and nuclear (11.8%), which clearly shows the dependency of the nation on different sources of energy. Similarly, in India, coal, lignite, gas and diesel comprise 63.2 per cent, followed by renewables (including small hydro projects, biomass gasifiers, biomass power, urban and industrial waste power, solar and wind energy), which is 22.7 per cent, and 12.6 per cent for hydropower.

The above examples clearly depict that energy mix is practised in many countries around the world. The government in its white paper targeted a 5-10 per cent energy mix with alternative sources of energy other than hydro. Apparently, the second largest potential source of energy is solar, which is a relatively newcomer: only 1.68 MW of solar power is connected to the national grid. To close the gap between the massive need for solar energy and the current supply, many solar power plants should be constructed and connected to the national grid. Let’s say, 5 per cent of energy mix of the total targeted 15000 MW of electricity would be 750 MW and 10 per cent would be 1500 MW. So, within 10 years, Nepal needs some large solar farms on a MW scale, which will assist the government to reach its target.

Grid connected solar power projects with battery storage could act in a manner similar to that of peaking run-of-the river hydropower projects, specifically during the evening peak hours. This kind of system enhances the effectiveness of solar power plants especially during the dry season and peak hours. Currently, Nepal is importing electricity during the energy-deficient season. There is also an advantage to the developer as far as the Power Purchase Agreement (PPA) rate is concerned as such battery storage solar power plant could claim a PPA similar to the peaking run-of-the river hydropower projects. Thus, developing solar farms will also be cost-effective.

Large-scale solar power plants would be more preferable to the traditional means of power generation, such as coal power plants, and considering wildlife and land use impacts. The impact is less compared to a storage type hydropower project, as there could be devastating impact in case of dam failure, either by a natural disaster or design failure.

The only issue is the massive use of land for large-scale solar power projects, which is only unjustifiable in case of land use in forested regions and agricultural land. It could be anticipated that solar panels have low reflectivity and convert a large fraction of insolation into heat, which could lead to concerns that they may affect the global or local climate. To sum up, solar farms should be given a serious consideration. The omnipresent bright sun would surely enlighten the path to a prosperous Nepal.

Chand is a consultant at the Office of the Investment Board