InDepth: Is our energy ecosystem consumer-friendly?

Binod Kumar Bista is a Bachelors of Art (BA) student at Kathmandu’s Ratna Rajyalaxmi College. Originally from a village in Kailali district of far-western Nepal, he lives in a rented room and cooks for himself using LPG. Bista knows the induction stove is more cost-effective and energy-efficient. Yet he is hesitant to make the switch. 

“I have limited time for cooking. What if the electricity suddenly goes out?” the 21-year-old asks. “I also cannot afford to have both the options at the same time.”

Research suggests heat-efficiency of induction cookers is nearly 90 percent, while that of conventional gas stoves is 50 percent. The former are also lighter on the consumers’ pockets. A 2021 study conducted by Amrit Man Nakarmi, a professor at the Institute of Engineering, Tribhuvan University, found that cooking on an induction stove is over 50 percent cheaper than cooking on gas.

Yet Nepalis are reluctant to fully switch to induction cookers. While most urban households rely on LPG for cooking, biomass—at a staggering 67 percent—remains Nepal’s dominant energy source. 

What makes people cling to traditional energy sources and is anything being done to change their behavior? 

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Our energy system doesn’t factor in consumer voice. The authorities dictate whatever they think is right. 

At least in the case of biomass and rural electricity distribution, there is more consumer participation in rule-making and enforcement. 

Bista’s family in Kailali uses biomass for cooking even though they also have an LPG stove. His family hasn’t fully switched to gas as firewood is both cheaper and more easily available. He says another reason many families in his village prefer firewood to LPG is because they are afraid of possible mishaps from gas-use, while some reckon that food cooked on firewood tastes better.

Dipak Gyawali, former minister of water resources, says it is difficult to get people to move to electricity, but, ultimately, they will have to make the upgrade. 

“For example, instead of jumping into electricity from firewood, people in rural areas can start with briquettes or improved cooking. Briquettes are cleaner, forest-friendly, longer burning, and more economical than traditional logs,” he says. 

Bharati Pathak, chairman of the Federation of Community Forestry Users Nepal, says while the demand for briquettes and charcoal is high in both urban and rural Nepal, one problem is that the Chinese products have captured the market. 

“Many forest products can be used for briquette production. If we could minimize production costs with greater use of technology, the beneficiaries of community forests could benefit a lot financially,” she says.

As for encouraging the LPG-to-electric switch in city areas, the Alternative Energy Promotion Center (APEC) has recently introduced a free induction stove distribution scheme for university students in Kathmandu valley. Almost 13,000 students have applied. An AEPC representative says this scheme will help students adopt induction and change their perception of electric cookers. 

Nepal uses most of its energy for cooking and transport purposes. While the use of induction stoves and electric vehicles has been rising, they are still not used in sufficient numbers to achieve energy-efficiency. Many people bought induction stoves when there was a major LPG shortage during the 2015 Indian blockade and at the start of the Covid-19 pandemic. Similarly, the skyrocketing fuel prices, driven by the Russia-Ukraine war, have persuaded at least some vehicle owners to switch to electric options. 

Shrabya Sapkota has been riding a petrol-run scooter for almost five years and is now trying to switch to electric. 

“Five rupees of petrol in my scooter gives me a kilometer’s mileage. But if I were to have an electric scooter, I would have to spend just 30 paisa to get the same mileage,” the 22-year-old says. “Say, I do 1,000 km on the road a month. In that case, in three years, I will save around Rs 170,000. Even if I have to replace the e-scooter battery, which costs around Rs 100,000, I still save Rs 70,000.” 

But Sapkota represents only a tiny fraction of people who are willing to ditch their fossil fuel-run vehicles for electric ones. There is a general belief that electric vehicles (EVs) are expensive and don’t do well off-road, even though users’ experience suggests otherwise. Consumers are also concerned about the unavailability of charging stations on long-distance travel. 

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A few electric vehicle companies have opened up charging stations across the country to boost their client numbers—and the approach seems to be working. If other companies follow suit, energy experts expect a significant rise in adoption of EVs. 

Brijesh Shrestha, an electric car owner, says humans are by nature resistant to change.  

“I too had second thoughts while getting the electric car,” he says. “Many more charging stations and infrastructure should be built to convince folks to go electric.”

The budget for the fiscal 2021/22 had slashed import duties on battery-powered vehicles from 40 percent to 10 percent in a bid to promote their use. Electric vehicles of up to 100kW capacity had to pay 10 percent in custom duties. Likewise, vehicles of 100-200kW capacity paid 15 percent, while 200-300kW vehicles paid 40 percent. 

According to the Department of Customs, 1,103 electric cars worth Rs 3.24bn entered Nepal between mid-July to mid-January in the fiscal year. In the same period in the previous fiscal year, only 51 cars valued at Rs 105.19m had been imported. 

EV dealers in Nepal see a bright future for electric vehicles: they have been able to meet only 30 percent of demand as India hasn’t been producing enough EVs. But the latest budget has been a dampener. 

In its budget for the fiscal year 2022/23, the government significantly hiked excise and customs duties on EVs. A 30 percent customs and 30 percent excise duties have been slapped on EVs of 100-200kW capacity. For electric cars of 201-300kW capacity, customs and excise have been set at 45 percent each. Similarly, excise and custom duties for EVs of over 300kW capacity have been upped to 60 percent each. 

This has increased the price of EVs in the Nepali markets, making it difficult for consumers to jump to the electric mode of transport.

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Even if people were to move to electric vehicles in droves, there is a lingering concern about the carrying capacity of electricity lines. Nepal’s per capita energy consumption of around 300 units is the lowest in South Asia. This means the country will need a lot of energy in the coming days as it modernizes. Moreover, the current distribution lines are made for lighting purposes, and if people were to switch to electric stoves and vehicles in large numbers, the lines may collapse.

Besides, the consumption of electricity is also growing in rural Nepal. 

“The Nepal Electricity Authority (NEA) has been unable to provide sufficient electricity in rural areas,” says Mahendra Prasad Chudal, program manager at the National Association of Community Electricity Users-Nepal. “We are trying to sort out a few problems related to bulk-buying and distribution of electricity with the NEA.”

NEA spokesperson Suresh Bahadur Bhattarai says power production is a dynamic process and the agency has been upgrading its system in line with changing demands. 

“We have been appealing to the public to switch to electricity. We wouldn’t have done so if our infrastructure couldn’t bear the load,” he says. “To promote electric vehicles, we are also planning to install at least 50 charging stations across the country within the next fiscal year.”