Who benefits from the decentralised energy system (DES)? Evidence from Nepal’s micro-hydropower (MHP)

Abstract

In low-income countries, uneven access to clean energy poses a challenge to reducing socioeconomic inequalities across gender and disadvantaged groups. Development planners view the decentralised energy system (DES) as having the potential to help address this issue, because it provides electricity access in areas where the national electricity grid is not available. This study assesses whether the DES helps to reduce inequality and improve gender empowerment by focusing on the micro-hydropower (MHP) scheme, a form of DES adopted widely in Nepal, and studying its impact on educational attainments and employment outcomes by caste and gender. The results show that MHP improves educational outcomes and facilitates a labour shift from traditional agriculture to waged and salaried jobs. However, a disaggregated analysis shows that, while the educational outcome of access to MHP electricity is higher for women and lower caste individuals, the positive employment-related effects are inclined towards socially dominant groups such as males and upper caste individuals. This shows that, while the DES improves educational outcomes in general, complementary conditions may be necessary to achieve significant improvements in the employment of women and lower caste individuals.