Prospect of Green Hydrogen in Nepal

By Vidushi Dembi

Among the latest technological developments in the energy sector, the discussion on powering economies using Hydrogen technology is gathering considerable limelight for past couple of years. After the first major wave of popularity in the 1970s, the recent Hydrogen wave that started picking up in early 2000s has gained considerable momentum since 2017. Hydrogen technology, more importantly Green Hydrogen, is being considered a key component of decarbonization plans for many countries in Global North, especially targeting sectors where renewable electricity isn’t feasible, such as heavy industries and long distance transportation. Notably EU in accordance to their ‘Fit for 55’ plan targeting a 55% reduction in emissions by 2030 and climate neutrality by 2050 have set separate targets for hydrogen. Germany alone has allocated a budget of €9 billion for their national hydrogen strategy. The technology and market mechanisms still being in their early stages of development render green hydrogen prices quite high as compared to other mainstream renewable sources such as solar and wind; cost parity being predicted in some countries only by 2030. Amidst this debate, Nepal, a ‘developing country’ that contributes mere 0.027% to global GHG emissions and is among the list of countries most susceptible to climate change, is interestingly keen on making an early beginning.

Nepal’s present energy scenario

Around 72% of Nepal’s energy demand is met by biomass and waste, other prominent sources being oil, coal and hydropower (Figure 1) for the country’s population of 29 million.

Figure 1. Nepal’s Total Energy Supply (TES) in 2018 [Source: International Energy Agency (IEA) 2021. https://www.iea.org/countries/nepal]

Nepal Electricity Authority (NEA) in its Annual report 2019-20 reports a total installed capacity in the country of 1332 MW for a peak electricity demand of 1408 MW as shown in Figure 2. Country’s final energy consumption 2017 recorded the share of electricity as merely 3.66%. Almost all of the electricity produced in Nepal is from hydropower. The generation capacity is owned by public as well as private enterprises with around 22% of electricity being imported from neighbouring India as of 2020. Almost 94% of the electricity is supplied to the residential sector and around 2% goes for commercial or industrial applications. IEA reports that today only 6% of the country’s population remains unelectrified. As per Nepal’s Ministry of Finance, the country is getting electrified at a rate of 4.3% per year against the global average of 0.8%. NEA has declared that there has been no load shedding in households after 2017 and in industrial sector after 2018. In spite of the progress in electrification, Nepal stands low at a position of 102 out of 108 countries listed in the Energy Trilemma Index 2020. Country’s per capita electricity consumption remains low, one of many reasons being electricity price is still high for a major section of the population (0.069 USD per kWh). Sector-wise energy consumption is topped by the residential sector (75%) followed by transport (12%) and industry (8%). The country is majorly dependent on imported fossil fuels especially crucial for transport sector which entirely runs on oil. Nepal also has largely unexplored but high potential of other renewables such as solar PV, solar thermal and micro hydro.

Due to various reasons such as high import dependency, insufficient storage capacity, inadequate infrastructure and financial constraints of the energy institutions, Nepal faces an energy shortage. The abundant hydropower potential remains largely untapped and the country continues to face challenges to maintain reliable and sustainable energy security.

Figure 2. Total energy available and peak electricity demand 2011-2020 in Nepal (Source: Nepal Electricity Authority, 2020. https://www.nea.org.np/annual_report)

The case of ‘surplus’ hydropower

Reliable electricity access goes hand in hand with GDP growth and hence increasing the share of electricity in the total final consumption forms a major focus for the government. Situated in the Himalayan region with almost 220 billion cubic meters of annual water runoff from the rivers, a 2020 report by Asian Development Bank (ADB) estimates a potential of 83 GW of hydropower in Nepal out of which 43 GW is techno-economically feasible as of now. As of 2019 however the installed capacity of hydropower stood at only 1113 MW which means only 2.5% of the total potential is currently being utilised. Recent estimates by Kathmandu University suggest more than 20 GW of hydropower projects are under various stages of development. NEA owned hydropower plants generated a total of 3021 GWh of electricity in FY 2019-20, an increase by 18.57% over the generation of 2548 GWh in FY 2018-19. Interestingly, provided that the current plans of hydropower development follow through, there is a scope of energy surplus, with figures indicating an excess of 3500 MW of hydroelectricity by 2028. Hydropower plants in Nepal also generate maximum output during rainy season from June to September. However, country’s energy demand is actually low during the time leading to large energy curtailment. NEA estimates hydroelectricity wastage between 53 – 840 MW in 2021 due to low consumption in rainy season. Since the electricity can’t be utilised locally, Nepal also plans on expanding its export options to neighbouring countries of India and Bangladesh experiencing high growth in energy demand. The exports plans have failed to fully materialise yet due to variety of reasons such as infrastructure unavailability, legal issues and geo-politics. Other renewables such as solar are abundantly available in India which are much cheaper than hydroelectricity making the option economically unattractive for India. Transfer to Bangladesh means setting up infrastructure through the Indian mainland that lies in between, impeding any major action. Some development was seen recently in this regard with the three countries in talks to finalise the process of exporting 200 MW electricity to Bangladesh by end of this year. Going a step forward, since 2020 Nepal has initiated the dialogue on utilizing their surplus hydroelectricity and untapped solar potential to establish the country as a major green hydrogen producer for local use as well as international markets.

A case for Green Hydrogen

Hydrogen can be used in either gaseous or liquid form as fuel or for generating electricity. It isn’t freely available in nature hence has to be produced using other energy sources. On the basis of production technique, hydrogen is often classified into colour categories of black, brown, grey, blue, green; even turquoise and purple hydrogen. Today approximately 70 million tonnes of hydrogen is produced globally for use in the industrial sector, most of it being produced by using fossil-fuel sources. The latest centre of attention – Green Hydrogen – is produced using electrolysis of water that splits water into oxygen and hydrogen using renewable electricity, generating two useful end products without contributing emissions to the atmosphere. ADB’s 2020 report ‘A study on the prospect of Hydropower to Hydrogen in Nepal’ studies the country’s scope of green hydrogen production with different levels of assumed hydroelectricity curtailment along with exploring costs of production and energy storage. The report suggests that given Nepal’s conditions of abundant hydropower potential ultimately expected to produce electricity more than the demand, yearly curtailed/wasted hydroelectricity during rainy season due to lower demand, and complications associated with developing hydropower projects as per plan, generating green hydrogen and storing it to fulfil the energy demand during seasons of higher demand is an option worth exploring. Another area of interest for the country is their rapidly growing transport sector which is currently 100% oil dependant and can be potentially powered using hydrogen fuel-cells.

The government in 2020 conceived the ‘National Hydrogen Initiative’ (NHI) to explore the possibilities in a concrete way and establish policy foundations. The main targets of NHI include policy interventions and financing, establishing pilot projects, supporting business for more commercialisation and developing institutional arrangements to support related activities. The government has initiated a collaboration with Kathmandu University and their recently established ‘Green Hydrogen Lab’, whose contributors include the Nepal Oil Corporation and the Norwegian government. Nepal has a potential of becoming a hotspot for cheap green hydrogen production in the future, which is also beneficial for countries in the Global North such as Norway, Denmark and Germany who have elaborate plans for transforming into hydrogen economies but don’t necessarily have the most economically feasible ways to produce the required hydrogen themselves.

Challenges for Green Hydrogen

Even as the share of traditional energy resources in Nepal has slightly decreased, the corresponding energy is being filled in by fossil-fuel sources such as coal and oil. These fossil fuels are largely procured from imports, with the import trends drastically increasing since 2013. Electricity affordability is still a major concern with a consumption of only 238 kWh per capita per year which is one of the lowest in the world. Limited institutional capacity has often led to unfulfilled targets in the past, which is most evidently seen in case of the country’s EV targets. Nepal’s 2016 Nationally Determined Contributions (NDC) for UNFCCC set an aim of increasing the share of EVs up to 20% as compared to the 2010 levels and 50% reduction of dependency on fossil fuels in the mobility sector by 2050. The share of EVs actually stood at less than 1% by 2020, leading to a target revision of 20% EV share in private passenger vehicles by 2025 in their second draft of NDCs. Especially when many have argued (famously Elon Musk) that electric vehicles make more sense than hydrogen-powered vehicles, perhaps focussing on EVs for decarbonizing mobility sector could be more beneficial for the country. The sophisticated hydrogen plan could be a long shot given the history of difficulties with materializing their more abundant primary renewable energy sources such as hydro and solar.

Despite high developments in electrolysis technology, electrolysis still remains a highly expensive process which can be a major challenge in the country’s hydrogen plan. Green hydrogen is still 2-3 times more expensive than blue hydrogen and is expected to match blue hydrogen costs only by 2030. For a country with population struggling with affording fossil-fuel generated electricity, hydrogen technology for local use can appear a distant dream. Another frequently cited crucial barrier for hydrogen technology is its low efficiency of around 30% by the time it crosses multiple conversion stages to finally reach the motor or battery. Moreover, even if GHG emissions aren’t a direct end product of the process, exporting green hydrogen internationally would involve generation of a huge carbon footprint.

Conclusion

As Nepal is still facing challenges to decrease the dependency of traditional energy sources, a dialogue about Green Hydrogen is somewhat unexpected but nevertheless worth exploring. A strong political commitment and institutional support along with eagerness from the industrial sector would be essential. Also important is planning out models of possible value chains and carrying out detailed cost analyses. The country has already initiated the consolidation of a Hydrogen action plan. If successful, it could have the potential to transform Nepal into a highly profitable manufacturer of the green fuel for global markets e.g., for regions like Europe spearheading carbon neutrality and neighboring country India also increasingly focusing on hydrogen. International collaborations could hence be a huge benefit with Global North assisting with technology and capacity development. Ultimately, the basis of this scenario is Nepal’s highly underutilized Hydropower (and other renewables) which, in parallel to the Green Hydrogen plan, should be given prime attention.

Achilles heel of Renewable Technology

By Aditya Chhatre

The first ever paper on the variations of atmospheric carbon dioxide contributing to long term climate changes was written in the year 1896 by a Swedish physicist Svante Arrhenius. For the analysis in this work, he uses the term ‘carbon acid’ to describe fossil fuels as a source of carbon emissions. The paper mentions fossil fuels to be a potential source for the carbon dioxide. Although later in his works, he articulates fossil fuels being the major contributor to global warming. As the electrical industry is highly based on fossil fuels, the concept of energy transition has carved its way in seeming as the unavoidable solution to most of the climate problems. Parallelly, research and development in solar and wind energy technologies had its advancements which created a sense of optimism. These renewable technologies with their high costs and having generation inconsistencies, were quite a dream to become reality in 1950s. But the urge to achieve energy transition has been only growing. Eventually, the price of electricity from renewable energy technologies dropped lower than electricity from conventional fossil fuel resources. Countries started to aim for targets of 70-100% share of renewables in their energy mix as fast as possible. Fossil fuel-based electricity is one of the largest contributors to carbon emissions. Also, various sectors such as transport, agriculture ought to increase the electricity consumption. Given these circumstances, energy modelling has been useful for forecasts future scenarios and requirements. We can call this century as the century for ‘Energy Transition’. Few countries have achieved and many are deploying solar and wind farms with their maximum capacity to achieve the transition. The global urgency is such that 2050 is set as the year to achieve carbon neutrality by most of the countries.

In these times where humans are trying to realign their carbon dependency, the focus has majorly been on energy resources such as solar PV, wind and batteries. Let’s look into the case of plastics – a light, durable and cheap product which turned out to be a game changer in our everyday life. Visiting grocery stores in 1950s, it was hard to find something which can keep the products more durable, increasing their shelf lives. 70 years later, it is really hard to find any product without plastic rapped around it in a grocery store. Immoderate amount of plastics made it difficult to handle turning the situation undesirable. Moreover, various types of plastics, made it worse for organized recollection. Recycling plastics has caught the eye of several start-ups but as the material is a composition of complex elements it makes it hard for the recyclers to separate the plastic which could be recycled in one facility. Countries such as US, Kenya, EU have banned the use of single use plastics. On the other hand, countries such as UK have tried introduction of tax on plastics bags with fines for breaking rules. It is a big task to get such a useful product out of the supply chain. There are lessons to be learnt for our energy transition. Renewable energy technologies are surely beneficial than the high carbon generation technologies. Concern here is to avoid the energy transition being the same story of starting a revolution with optimism and in 2050 finding a clueless heap of materials to deal with. This rapid change has vulnerabilities which are easy to miss out and it is better to assess and act on them. One of such weakness in the renewable industry is lack of circularity.

To have an estimate of the amount of recycling capacity needed, we have to look at the material requirements for individual energy resources. The material required for the different sources of energy are shown in Figure 1. Solar and wind power plants have the highest material use per Tera watt hours (TWh) of electricity production. Even though these power plants are not carbon intensive, they need a lot more material than conventional sources per TWh. After the designed life of a panel or a wind turbine, the challenge is recollection and then creating a business model which use the recycled material back in the economic chain. Renewables have a characteristic challenge when it comes to recollection of panels or turbine blades. Solar and wind power plants need much more space for the same amount of electricity generation than the conventional thermal power plants. The non-concentrated designs, increases costs and scheduling time to transport the waste to the recycling centres. Another thing which needs to be taken care is that the life of these resources is 20-25 years compared to the conventional plant of 40-50 years. Because of these reasons it is very likely that the solar panels, wind turbines and batteries have higher chances of being mishandled and landing up in the landfills without proper processing. It now becomes a need to increase the recycling capacities, ideally targeting recycling capacity to be consistent with the installed capacity. It is important for designers, policy makers and entrepreneurs to already align recycling techniques, predict the expected timeline and deploy the recycling facilities at necessary geographical locations.

Figure 1. Range of material requirements for various electricity generation technologies

Solar & Wind


Solar PV and wind power plant’s rising trend is expected to grow even further as the technology progress. As of now 629 GW of solar PV and 742 GW wind has been installed globally. To achieve energy transition, models recommend the growth to be 10-12 times of the current installations till 2050. The average life span of solar panels designed by the manufacturers is for 25 years. Also there have been cases, maintaining panels regularly, increased solar plants life up to least 30 years or even more in some applications. Recently, a study from Harvard reviewed the market PV panel replacement rate. The study shows that the utility and residential customers connected to the grid replace the modules after their mid-life period (15-20 years) which makes an economically beneficial decision considering the current technology improvements, panel prices and electricity prices. In 2021, we can expect that the panels from 1990-2000s have already started to be decommissioned and replaced. Similarly, the wind turbine blades which have a life of 15 years. Working on the yearly installation rate, Figure 2 shows the cumulative million tonnes of panels which are expected to be out of service till the year 2046. The graph gives a clear picture of the expected timeline and the quantity of the renewable waste. Solar panel and wind turbine blade waste is calculated according to the installations and assuming average weights. Also, wind technology saw an earlier installation phase even before the solar technology deployment started extensively. Therefore, we can expect a higher quantity of turbine blades as waste before high number of solar panels are decommissioned. But eventually, as solar plants have higher material to electricity densities than wind farms, solar PV waste would cross over wind waste around 2040. If renewable recycling processes are not in place, the waste would be 50 and 30 million tonnes till 2046 for solar panels and turbines blades respectively. To have a comparison, these quantities are way more than Australia’s one-year solid waste of 13 million tonnes. We can expect a boost from the year 2030 where we need to be prepared with the recycling  sectors supply chain which can handle this amount of the renewable wastes.

Figure 2. Solar and wind waste quantities 2021-2046 – (Self)

Photovoltaic panels have glass, aluminum and silicon as dominant materials. Project owners usually take the easy way to send the panel to a glass recycler who uses the glass and scraps the rest. Globally, photovoltaic panels are broadly of 2 types, Silicon based and Thin-film based. As silicon based solar panels are common, the processes are developed for its recycling and is comparatively less energy intensive than recycling thin film based solar panels. After removal of the glass the solar cells are retreated with thermal processes and the silicon is reused in the form of modules and other applications. Laws for collection of solar panels are inconsistent even in developed countries. Such as in US there exists a state wise plan which is not consistently stringent nation-wide . In 2012, EU WEEE included solar panels in their electronic waste category. According to this regulation, it is mandatory for the manufacturers and companies in EU to collect the panels after their use and put them back in the recycle chain. The companies are also allowed to charge extra for the post product life activities. This framework has helped the EU solar industry to recycle 80% of their panels. This is a great way to make the authorities responsible for handling the waste and making the recycling market profitable. Similar regulations are been drafted in various countries and would soon be implemented to make solar industry more circular.

Wind turbine blades are made up of composite materials which are highly durable and light. Apart from wind turbines, composites are also used extensively in sectors such as constructions, transport, aeronautics and electrical components. So, a viable solution for recycling composites will have a positive impact on all these sectors in the terms of circularity. There are composites recycling options such as solvolysis and pyrolysis. But particularly in the wind sector it is not possible to shred the blades on site because of size and feasibility of the cutting processes. This is the reason for high costs for transporting back the blades to the recycling centers. Freight costs being high, this makes recycling an economically non-viable leading to the convenient decision to dispose the blade in a nearby landfill. Currently unlike solar panels, there has been absence of recycling regulations and laws for wind turbine blades. Even countries within EU like Germany and France are still in the research stage to implement wind blades recycling policies mainly due to the site shredding blades and transport issue. However, a project, ‘zero waste blade research’ (ZEBRA), is a 24 months project launched in September 2020 for 100% recycled wind turbine blade. This project is been regarded as an opportunity to have a full-scale opportunity for achieving technical, economic and environmental solution necessary for recycling wind turbines and reducing the blades waste.  

Batteries

The stagnant lead acid batteries market, have seen a steep rise with the advancement of lithium-ion technology in this decade. The demand of portable device and electric vehicles (EV) have bolstered the additional investment in the development of the technology. Along with it, the current trends of compatibility of batteries and renewable energy power plants for residential and grid applications has put pressure on its manufacturing capabilities. There are also questions to be answered about the end-of-life of such huge number of batteries. To consider the EV industry there are studies claiming the batteries after their life in an electric vehicle still have 70-80% capacity. These secondary applications of batteries are particularly used at charging stations or connected to the grid for ancillary applications. This improves life of EV batteries by at least 7-10 years. After a certain threshold there has be recycling tie-ups of battery manufactures for their specific battery type. The lithium-ion technology all together is a broad concept with different anode and cathode chemistries involved. Each battery application employs a different technology, which raises serious concerns over type of material used, its availability and recycling these new used batteries. Battery technology is still undergoing huge transformations; hence the topic of its recycling is still of secondary priority, but is nevertheless important.

Conclusion

We need a conceptual change where products need to have more recycled material percentage and use lesser raw material at the design stage focusing on energy efficiency and recyclability. This is a sectoral challenge where not only recyclers but manufacturers and customers have to play an active role together. Bad handling would weaken the advantages of using renewable technologies. For project owners and users, recycling can be a demanding extra step, which is also currently non-economical. We need to act pro-actively by taking steps such as not scrapping the panels, batteries and wind turbines blades to a convenient local with no expertise of recycling, but contact recycling authorities/companies and make this energy transition truly effective. There are scenarios wherein countries within EU have better recycling rate for batteries and solar panels compared to other developed nations. Hence, recycling rates are variable and eventually they would be less dependent on the technology rather more on the geographical location.

The volume of renewable waste is expected to increase exponentially and even go over the board from 2030 if recycling facilities are not in place till then. A business model should include the amount of renewable waste streamed back into the economy and in due course should make recycling profitable. Whether be it a company or a country the task is to have a 100% close loop system reusing and recycling materials. National and governmental policies are key to incentivize this market. It is crucial for governments and regulators to introduce and fund organizations working in this field to strengthen them to be efficient by the end of this decade. The recycling industry is that the sector will have a swooping growth as an effect of the market demand at the point when recycling of these products gets cheaper than mining the needed raw materials. This could be the point where market needs and the environmental needs meet.