KATHMANDU, July 24: Electricity will have dominant share in Nepali households by 2030, according to energy demand forecast study conducted by the government.
The study shows share of electricity will jump to 19 percent of total sources from 4 percent in 2014, while use of traditional fuels like firewood and cow dung will contract to 55 percent from the existing 77 percent, according to Energy Demand Projection 2030 which was endorsed by the Investment Board Nepal (IBN) on Friday.
The study prepared by a team led by National Planning Commission (NPC) Vice chairman Yuba Raj Khatiwada, who is also the member of IBN, has projected a major shift in electricity consumption, particularly in urban households.
"Electricity usage for space and water heating is expected to grow. It will replace fossil fuels and traditional fuels in urban households and electricity is also expected to displace LP gas as the dominant energy source for cooking," states the report.
Use of electricity in total energy used for cooking in urban households will jump to 52 percent from the existing a little over 3 percent, by 2030 according to the report. But the use of electricity in rural households will increase at a slower rate.
The report has been forwarded to the cabinet for endorsement.
IBN CEO Maha Prasad Adhikari, who is also the member of the study committee, said: "In this changed scenario of energy demand projection, we no longer have to be worried about signing power purchase agreements with developers."
The projections are made on the assumption that our national economy will grow by 5 percent or base case scenario. The base case also assumes that the share of electricity in total energy demand gradually increases from existing 6 percent of 2014 to 23 percent in 2030.
Share of electricity in current energy mix is higher than what the Water and Energy Commission Secretariat has projected.
According to the report, the share of fossil fuels (primarily coal and LP gas) will remain the same in 2030 as well. “While demand for energy from fossil fuels will increase due to manufacturing and domestic demand, it will also decrease as electricity will displace it as the preferred energy in manufacturing and cooking," it added.
The study has also forecast the overall electricity demand in 2030 at 33,433 Gigawatt Hours annually which is equal to 6,358 MW at 60 percent system capacity factor. This means the country needs installed capacity of 10,092 MW to meet the demand.