BACKGROUND

1.1 The Rural Energy Scenario
In Nepal the energy sector is usually related to the use of fuel wood, agricultural residue, animal waste, coal, petroleum and electric power (Figure 1). The use of each type of energy resources has its negative and positive impacts on the environment and development.

More than 90% of the population live in the rural areas and depend largely on the use of traditional (biomass) resources for meeting their energy needs. This demand has placed pressure on the biomass resources and arable land in an already deteriorating environment. Loss of biomass has resulted in serious environmental, economic and social consequences. Environmental consequences include ecological instability, loss of soil fertility (hence loss of agricultural production), desertification, climate change and loss of bio-diversity. Other consequences are (1) more cost in time, labor and resources of the people, (2) health and nutrition cost, and (3) displacement of population. Such pressures have jeopardized economic growth and placed the poorest and the most vulnerable groups of the population, viz. women and children, at risk. Thus, the existing energy use pattern is not sustainable. It will cause rapid degradation of the natural environment and threaten livelihoods in the hills of Nepal if suitable interventions are not introduced.

The import of coal and petroleum has led to increasing demand on Nepal's foreign exchange reserves. It accounts for about 40% of Nepal's total export earnings. Nepal has no known significant fossil fuel reserves. Furthermore, the cost of distribution of fossil fuels in the hills is very high.

Electricity consumption in Nepal is one of the lowest in the world. The immense hydropower resource is largely untapped and contributes only about 1% to the total energy consumption of the country. Only 15% of the population, mostly in the urban areas, have access to electricity. The planned development of medium sized hydropower projects will primarily meet the power needs of the urban areas and the Terai. There is little prospect of electricity from the national grid reaching most of the hilly areas in the near future.

The best alternative source of energy for isolated and dispersed hill communities is the decentralized development of locally owned and managed micro hydropower systems. Where micro hydro is not feasible or in order to supplement it, other alternative energy technologies like biogas, solar, wind, gasifier must be developed.

However, rapid development of renewable energy systems can only be achieved through careful planning. Thus, a systematic approach needs to be developed towards energy planning at all levels but particularly at the rural levels where large sections of our population reside. With this in mind, REDP is working with DDCs in the programme districts to set up an effective, bottom-up energy planning process.

1.2 Decentralized Rural Energy Planning
The traditional approach to energy development is characterized by external agencies determining the suitability of selected technologies to the beneficiary population in rural areas. Therefore the typical rural energy planning begins with the assessment of available energy technologies and then proceeds to implement these technologies. This gives little or no flexibility to adjust the program according to the local situation, the users' needs and preferences. Furthermore, the beneficiary community members do not participate in the planning and implementation phases of the project. Therefore, the beneficiaries are neither able to build up their capability to operate and manage the system nor do they develop a sense of ownership towards the scheme. Consequently, technological successes are limited, with most technologies being rejected by the users. Furthermore, because of insufficient follow-ups the project is abandoned once the 'project targets' are met.

REDP has adopted a different approach for effective rural energy planning. In this approach:

Community mobilization is the basis for sensitizing and mobilizing the community for planning, implementing, operating and managing rural energy systems. The community mobilization process is based on six basic principles, viz. organization development, skill enhancement, capital formation, technology promotion, womens' empowerment and environment management (Please refer to REDP Community Mobilization Guidelines for details).

Planning is based on what the communities feel they need.

Project identification is done through a local participatory approach.

The rural energy needs are met by matching energy resources (technically, socially, economically and environmentally) with energy technologies.

REDP has implemented this approach when supporting the DDCs in the programme districts to formulate their district energy development plans and program. This energy planning process forms an integral and important part of the DDC's district planning process.

1.3 Purpose of this Guidelines
REDP aims to develop capacities and capabilities to plan for and manage rural energy development programs at the district level. For this, REDP supports the DDCs to develop an information system on rural energy, develop and use tools and techniques for district energy planning and develop monitoring capabilities. This document will provide the operating guidelines for decentralized energy planning that will enable the DDC: REDS to carry out effective district energy planning.