The social mandate of the Royal Government to provide “electricity to all” has been fulfilled with almost 100% of homes connected barring a few extremely isolated homes not occupied on a permanent basis. While 100% electrification has been a huge milestone for a country with a rugged terrain and sparsely spread population, it has also witnessed tremendous economic growth over the last two decades due to the rapid development of hydropower which propelled the growth of the trade and industry sectors. The current installed capacity of 2,326 MW from the large hydropower plants is planned to increase substantially in the coming years, so will the domestic energy demand, which may soon exceed the existing generation capacity, especially during the lean season.
The average economic growth rate over the last 10 years have been around 7.4% which is projected to sustain. While export of electricity is still the predominant source of revenue towards the GDP growth, over the years the import of fossil fuels has also increased drastically. In 2017 alone, the import of fossil fuels accounted for more than 71% of the revenue earned from the export of electricity, leaving limited budget for other developmental activities. This trend may result in reduced exports of electricity which could worsen the trade deficits. Meanwhile, due cognizance of the climate change impacts on the glaciers and water ecosystems must be considered which are the main sources of water feeding into our rivers on which the hydropower plants are built. Against this backdrop, it’s important to broaden the energy supply mix by exploring other forms of renewable energy sources at supply side and through energy saving interventions at the demand side.
While the Alternative Renewable Energy Policy (AREP) 2013 outlines various provisions for energy source diversification, the current National Energy Efficiency and Conservation Policy 2019 will provide an overall framework for interventions on the Demand Side Management (DSM). With the ever-increasing domestic consumption, it is important to invest in the DSM by promotion of Energy Efficiency & Conservation (EE&C) measures so that scarce energy resources are optimally used thereby leading to energy conservation. Several studies conducted in the demand side management in 2014 revealed that the energy consumed by the building sector is the highest at 42%, followed by the industry sector at 37% and the transport sector at 19%.
Therefore, the National Energy Efficiency and Conservation Policy was formulated in 2019 to govern the demand side energy management and serve as a guiding tool for all agencies to undertake EE&C measures. The policy focuses on four major sectors; Building, Industry, Transport and Appliances and the EE&C measures in these sectors will bring a reduction in the energy consumption as compared to the Business As Usual (BAU) scenario. The reduction in the energy intensity will not only enhance the energy security of the country but will also create enabling platform for the private sector to undertake EE&C measures.
Hon’ble Tengye Lyonpo Loknath Sharma launched the Policy on November 25, 2019.