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8 Oct 2021 | REEECH

Decentralised renewable energy solutions for food value chains in the Hindu Kush Himalaya

Lipy Adhikari & Anu Joshi Shrestha

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Renewable energy (RE) can significantly contribute to improving livelihoods and wellbeing of mountain communities by bringing efficiency to various livelihood activities. Cost-competitive, decentralised renewable energy solutions provide a unique opportunity to reconcile energy needs with socioeconomic development and climate objectives in the Hindu Kush Himalaya (HKH) region. Some value chains in the agri-food sector can also benefit from these solutions, thereby contributing to improved food security and agricultural productivity of remote mountain communities. However, the energy flows and needs of mountain communities along the economic value chains are still not well understood and documented. To address this, REEECH and its partners, International Renewable Energy Agency (IRENA) and Solar Light Pvt. Ltd (SELCO), conducted a comprehensive scoping exercise to identify promising food value chains in the region from an energy perspective.

 

Identifying food value chains in Nepal and Bhutan

The study was planned for all regional member countries, but due to the COVID-19 pandemic, the first phase of the study was conducted only in Nepal and Bhutan. This study helped understand existing gaps and potential actions required for advancing renewable energy solutions in the region. We also developed a systematic and sequential framework to select food value chains relevant to most HKH countries.

Given their extensive work in decentralized renewable energy, particularly in the agri-food sector, SELCO was responsible for identifying potential RE technologies across the food value chains and the business models to transform the agri-food sector from subsistence to commercial scale in Nepal and Bhutan. This can be replicated in other HKH countries.

In the initial step, we reviewed several policy documents and peer-reviewed articles 1 on Nepal and Bhutan to broadly identify food products that have been prioritised by governments and those that could be developed into sustainable value chains later in the project. Experts from each country provided scores for the identified food products based on the criteria developed and finalized two value chains for each country. Considering their development potential, buckwheat and vegetables were selected for Nepal, and yak (milk and other food products) and potato for Bhutan.

A SWOT analysis of each of the finalized food value chains helped us understand how their strengths could be used to minimize threats/weaknesses and also clarified potential interventions to maximize opportunities along the chain. Through the energy perspective, numerous enterprises and government bodies were identified and contacted to create context-specific information on current energy use and potential intervention areas at different nodes of the value chain. Enterprise level interviews were also carried out for each value chain in both countries.

 

Renewable energy in food value chains

Every value chain development process consists of four functions: production, processing, wholesaling, and retailing; and requires involvement of at least three actors to run the chain. In the mountain context, the scale of agricultural production is limited, and the functions and actors are highly impacted by mountain-specific challenges such as remoteness, inaccessibility to roads or markets, marginal and subsistence living, climate variability, all of which pose additional challenges for developing food-based value chains.

The scoping study revealed that the selected food value chains have not yet been developed in the mountains of the HKH. Yak and buckwheat have not been commercialized, with producers performing almost all four functions in the value chain. In the case of potatoes and vegetables, while the market demand is high, most are sold in their raw form without much processing or value-addition.

In terms of energy use in the selected value chains, awareness on RE was a subject of concern amongst the enterprises. A majority of the study respondents in the buckwheat and vegetable enterprises in Nepal were aware of renewable energy, while only a few respondents in the potato and yak enterprises in Bhutan were aware of it. Respondents from enterprises involved in yak activities had the lowest awareness of RE as majority of related activities including processing takes place in high mountain areas where they rely on biomass fuels (fuelwood, dung) with little or no access to renewable energy.

 

Barriers to renewable energy uses in selected food value chains

The respondents from across the enterprises identified several barriers to using renewable energy in various activities in the value chain such as lack of adequate knowledge and technical support. Our study finds that liquid fuel, such as petrol and diesel is the most common form of energy used, mainly for transportation. Some of the processing activities are dependent on fuel wood, animal dung, sun-drying and water based electric mills. This shows that energy-based value chains in the HKH region are still in a nascent stage and yet to be developed.

There is a range of opportunities and potential for product diversification and value-addition of the selected food products, which can convert these short chains into green and sustainable value chains in future. Development of such value chains will increase energy demand at all nodes of the chain. With suitable interventions in agriculture mechanization, production and processing, energy solutions can help upgrade and convert subsistence level value chains into commercial ones. However, there is a need to tailor these interventions to the mountain context. Development of such robust value chains will ensure sustainable and resilient livelihoods of the mountain communities of the HKH region.

 

Sharing the findings

The findings of the scoping exercise were shared in the workshop, “Decentralized renewable energy solutions for food value chains in the HKH region”, organized by ICIMOD, IRENA and SELCO on 24 March 2021. The workshop was attended by government officials, academicians, financing institutions, investors, entrepreneurs, technology suppliers and practitioners from regional member countries (Afghanistan, Bangladesh, Bhutan, China, India, Nepal, and Pakistan), FAO, as well as UNIDO countries.

The discussion on RE interventions in Bhutan focused on issues of affordability, which is a concern when these are on a small scale. However, participants observed that these customized RE technologies are very much a necessity for the mountains. While the cost of developing such models would be high, it will be crucial to work together and cooperate with the local communities, government, and financial institutions to ensure its sustainability. This cooperative model could work best for these interventions as it helps reduce per unit costs and generates benefits at scale. The attendees also agreed that the insights from the HKH region are valuable for other regions as well.

The workshop also opened collaboration opportunities among different organizations. Alternative Energy Promotion Center, for example, expressed its interest in partnering with organizations working with communities and the government to promote MSMEs and those that support processing and value addition of agricultural produce through decentralized renewable energy. Banks like Nabil Invest expressed willingness to collaborate if partners have the right set of products and knowledge to help remote areas like Karnali in Nepal become economically sustainable.


1 Adhikari, L., Tuladhar, S., Hussain, A., & Aryal, K. (2019). Are Traditional Food Crops Really ‘Future Smart Foods?’ A Sustainability Perspective. Sustainability, 11 (19), 5236. https://doi.org/10.3390/su11195236

Department of Livestock, Royal Government of Bhutan (2013). PES for Yak Production system in Bhutan. [PowerPoint slides]. http://www.livestockdialogue.org/fileadmin/templates/res_livestock/docs/2013_nairobi/presenations/23/PES_Concepts_Bhutan.pdf

FAO (2008) Potato and water resources. http://www.fao.org/potato-2008/en/potato/water.html

Future Market Insights. Buckwheat Market: Global Industry Analysis and Opportunity Assessment 2017-2027.  https://www.futuremarketinsights.com/reports/buckwheat-market

 

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