About:
Kushal Gurung is a clean tech professional with over 15 years of work experience spanning Asia and Europe. He is the Founder CEO of Wind Power Nepal, a renewable energy and engineering company. Additionally, he is a co-founder and Director of Gandaki Urja, which converts organic waste into bottled biomethane gas (bioCNG) and organic fertilizer. As Director of Solar Farm Nepal Pvt Ltd, Kushal oversees a 5 MW on-grid solar PV project. He is the Chairperson of the Renewable Energy Confederation of Nepal (RECON), an umbrella organization for associations in the renewable energy sector in Nepal. Kushal served as an Expert Member of the Government of Nepal’s Environment Protection Council, chaired by the Prime Minister, and was a board member of the Alternative Energy Promotion Center (AEPC) under the Ministry of Energy, Water Resources, and Irrigation.
Overview:
South Asia has immense potential for renewable energy — from Nepal’s hydropower to India’s solar and Bangladesh’s wind. Despite this potential, the region faces persistent energy shortages and a high reliance on fossil fuels. Private sector participation in cross-border energy trade remains limited due to policy uncertainty, fragmented regulations, and high investment risks.
With diverse markets, abundant renewable resources, and growing energy demand, South Asia holds significant potential for cross-border investments, technology transfer, and regional collaboration. This interview seeks insights from the private sector on market opportunities, challenges, and partnerships to support a faster and more inclusive energy transition in the region.
Interview:
- The markets with the highest potential for private sector engagement include on-grid hydropower and solar projects with the Nepal Electricity Authority (NEA). These projects are crucial as they provide scalable and reliable sources of clean energy. Renewable energy technology advancements offer opportunities for innovation and deployment in e-mobility, which can transform transportation systems, and e-cooking, which can improve energy efficiency and reduce emissions in residential settings.
- Nepal is in a favorable situation for the production of hydrogen due to the abundance of renewable energy in the form of hydropower. The government of Nepal and research academia are in the research and planning for the pilot projects.
- Yes, partnerships have been established, especially with organizations from Bangladesh. These partnerships focus on lobbying and advocacy efforts to facilitate cross-border energy trade.
- Additionally, there are initiatives to engage in power trading between Nepal and Bangladesh, aiming to optimize energy resources and meet the growing energy demands in both countries.
- Nepal possesses substantial energy potential, particularly in hydropower, which can meet domestic needs and supply neighboring countries like India and Bangladesh.
- The energy implementation plan targets a generation capacity of 28,500 MW, with a goal to export 15,000 MW, including 10,000 MW to India, within the next decade.
- Other renewable sources such as wind, solar, and biogas could contribute 5-10% to the energy mix.
- Opportunities exist in solar assembly, micro-hydro turbines, and transformers, enhancing regional supply chains and reducing import dependencies.
- The presence of huge investments in the sector, from both private and public sectors, and hydroelectricity being recognized as a priority sector by the government (with plans to generate up to 28,500 MW through investments of US$ 46.5 billion within a decade), there are credible grounds to foresee potential in leveraging surplus electricity towards making green hydrogen a transformative energy alternative.
- This represents a major opportunity to engender clean industrialization domestically, diversify energy exports, and support a regional clean energy transition.
- There is a growing trend of supply-demand agreements between Nepal and Bhutan with countries like Bangladesh and India.
- Efforts are underway to plan and implement an energy trade, which includes a technology exchange. These exchanges facilitate access to cutting-edge renewable technologies and foster collaboration, driving innovation and efficiency in energy production and distribution.
- Private companies face several barriers, including policy uncertainty and underdeveloped infrastructure, such as roads, railways, and ports, which increase logistics costs and technical risks.
- Frequent power outages and uneven internet penetration further disrupt operations.
- Geopolitical risks and bureaucratic hurdles add to the challenges, while trade and tariff barriers limit the effectiveness of initiatives like the South Asian Free Trade Area.
- Private investors are hesitant due to frequently changing policies and tariffs, a lack of harmonized regional grids, and weak payment security mechanisms.
- Differing regulatory frameworks and tariff structures create complexities in regional investments.
- Trade agreements between Nepal and India, as well as Bangladesh and India, often differ in rates and currencies, leading to increased transaction costs and uncertainty.
- Harmonizing these frameworks could streamline processes, reduce costs, and attract more private investments.
- There is significant scope for joint research and development (R&D) initiatives and innovation hubs focusing on emerging technologies like energy storage and green hydrogen.
- These efforts can be supported by academic institutions, governments, and organizations such as the National Academy of Science and Technology (NAST) and Kathmandu University (KU).
- Collaborative R&D can accelerate technological advancements and commercialization, providing solutions for energy storage challenges and leveraging green hydrogen’s potential.
- Collaboration can be facilitated through dialogues between private sector associations and government entities, fostering regional partnerships.
- The Indian private sector has already shown interest in collaborating and partnering with government initiatives. By working hand-in-hand, they can design renewable energy corridors that optimize resource allocation, enhance infrastructure, and create a conducive environment for private investments in renewables.
- The private sector is poised to play a crucial role in South Asia’s energy transition.
- In Nepal, private companies could evolve by generating energy and selling directly to neighboring nations, bypassing traditional state monopolies.
- There’s potential for increasing energy storage capacity and investing in solar and wind projects. Private companies can significantly contribute to decarbonization efforts, aiming for net-zero emissions by 2045 through advancements in commercially viable areas like e-mobility and e-cooking.
- Creating regional market policies that establish investment opportunities for the private sector can help to enable greater private sector participation.
- It’s crucial for all regional governments to collaborate and form alliances, establishing a harmonized and predictable regional energy market framework under initiatives such as BBIN, BIMSTEC, or SAARC Energy Centre.
- To address existing challenges, establishing a regional energy market framework is essential. Key elements include:
- Policy and Regulatory Certainty: Adopt long-term regional agreements guaranteeing stable tariffs, tax treatment, and open access for private players.
- Regional Grid and Regulatory Harmonization: Develop common grid codes, technical standards, and transparent wheeling charges. Establish a South Asia Regional Power Exchange modeled on Nord Pool in Europe.
- Payment Security Mechanisms: Create regional risk-sharing funds or escrow facilities to ensure timely payments to private producers.
- Cross-Border PPAs and Open Access: Enable industries and utilities to directly contract with private producers across borders, reducing reliance on state monopolies.
- Expected Outcomes:
- Unlock billions in private renewable energy investment.
- Enhance energy security and reduce import dependence on fossil fuels.
- Lower electricity costs for industries and consumers.
- Build a foundation for South Asia’s green energy transition.
- A harmonized and predictable regional energy market will transform South Asia from a fragmented set of national markets into a dynamic, investor-friendly energy hub.