Subsidy on renewable energy unproductive, say experts


The government has been providing subsidies on renewable energy for the last 50 years to make clean energy accessible to people living in rural area. However, a model study conducted by a non-government organisation in five districts in Bagmati Province and Province 5 showed that the targeted communities had not been benefiting from the subsidies as desired.

The study showed that the expansion of the market for renewable energy technology had shrunk as renewable energy users and the private sector relied only on the subsidies.

The study maintained that provision of subsidies had brought a contraction in the energy promotion as it did not pay attention to promoting new technology and research and as the budget allocated for subsidy was available to a limited number of renewable energy technologies only.

The study has recommended the government to formulate a master plan for an extensive reform in the distribution of the grant, keeping in view the fact that subsidies spurred the tendency to consume energy free of cost, benefiting the rich consumers while the marginalised groups were left out.

Speakers of a webinar organised here today to discuss a working paper titled, ‘Role and Effectiveness of Subsidies to Promote Energy Access in Nepal’, have asked the government to rethink regarding the subsidies provided for renewable energy as the targeted groups have not been able to benefit from it.

The speakers agreed that even though the people in rural areas have got energy at cheaper price and there has been an improvement in health and environment, time has been saved, and employment, production and access to information has increased as a result of the provision of subsidies, the duplication seen in the subsidies should be removed and alternative ways sought for its utilisation.

At the programme, president of the Agriculture, Cooperative and Natural Resources Committee under the House of Representatives, Purna Kumari Subedi stressed on the need of systematising subsidies provided in the renewable energy sector for increasing its use, for expanding its access to the poor and marginalised communities and for improving their living standard. She stressed on bringing policies and programmes for promoting use of renewable energy in agriculture and other purposes.

Former minister Ganesh Sah stressed the need of developing electricity, petroleum products and bio-mass as an integrated energy system, to increase consumption of energy for agriculture production and energy mixture.

Member of the National Planning Commission, Krishna Prasad Oli said the commission would launch activities to utilise the grant provided in the energy sector to develop an integrated energy system for the country by making amendment to some existing policies. The 15th plan has given special stress on development and expansion of renewable energy, he added.

A version of this article appears in e-paper on September 2, 2020, of The Himalayan Times.