Renewable and Sustainable Energy Reviews 55 (2016) 43–58

Contents lists available at ScienceDirect

Renewable and Sustainable Energy Reviews

journal homepage: www.elsevier.com/locate/rser

Analytical hierarchy process (AHP) application for reinforcement

of hydropower strategy in Nepal
Rana Pratap Singh n, Hans Peter Nachtnebel
Institute of Water Management, Hydrology and Hydraulic Engineering Department of Water-Atmosphere-Environment University of BOKU, A-1190 Vienna,
Muthgasse 18, Austria

art ic l e i nf o a b s t r a c t

Article history: The objective of this work is to analyse hydropower implementation in Nepal over the last few decades
Received 11 December 2014 and to elaborate recommendations for the most appropriate scale of hydropower development for Nepal.
Received in revised form Changing national context with increased social and environmental awareness justifies such studies
13 August 2015
which are based on a multi-criterion approach. Stakeholders with quite different background and related
Accepted 26 October 2015
to hydropower development in the country were involved to reach consensus. Involving many different
groups of stakeholders through questionnaire survey for prioritization exercise is first time since gov-
Keywords: ernment classified hydropower schemes into five scales based on generation capacity. Among various
Hydropower development multi-criterion decisions making (MCDM) tools Analytical hierarchical process (AHP) method developed
MCDM
by Saaty was selected. It can be concluded that AHP is easy applicable and appropriate tool to rank
AHP
hydropower schemes with respect to scale considering social, economic and environmental issue.
Strategy formulation
Additionally, political and technical issues were considered.
This study organized in a framework of five criteria (factors) along with associated sub-criteria as well
as embedded elements and five alternatives (scale of Hydropower). Subjective value judgment, based on
questionnaire survey is used for pair-wise comparison following standard AHP procedure. It can be
concluded that medium hydropower is most appropriate and it is closely followed by big hydropower
schemes in ranking. Such prioritization will help to develop an innovative hydropower development
strategy for the country and will also help to review the recent strategy followed. Though, this research
was executed for academic purposes, it could be also useful for all stakeholders in general and decision
maker in particular involved in hydropower sector.
& 2015 Elsevier Ltd. All rights reserved.

Contents

1. Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
1.1. Energy and hydropower in Nepal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
1.2. Summary of experiences from hydropower in Nepal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
1.3. Structure of the paper . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
2. Problem Definition . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
2.1. MCDM and AHP applied to hydropower . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
3. Objectives and tasks . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
4. Methodology . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
4.1. Background information or the assessment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
4.2. Questionnaire and survey . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
4.3. Data synthesis and structuring of hierarchy. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
4.4. AHP application to rank hydropower schemes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
4.5. Sensitivity analysis. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
5. Essentials of AHP . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50

n
Corresponding author.
E-mail addresses: rnprtpsngh@yahoo.com (R.P. Singh), hans_peter.Nachtnebel@boku.ac.at (H.P. Nachtnebel).

http://dx.doi.org/10.1016/j.rser.2015.10.138
1364-0321/& 2015 Elsevier Ltd. All rights reserved.
44 R.P. Singh, H.P. Nachtnebel / Renewable and Sustainable Energy Reviews 55 (2016) 43–58

5.1. Principles of AHP . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50

5.2. Experiences with AHP in hydropower assessment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
5.3. Comparisons of alternatives in AHP . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
6. Results and recommendations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
6.1. Results . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
6.2. Sensitivity analysis of the result . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
6.3. Policy implication and recommendations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
7. Discussions and conclusions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
Acknowledgment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57

1. Introduction
With nearly 2.27% of the world stock for about 0.35% of the
world population, Nepal is one of the richest country in water
resources [1], Nepal is still not able to adopt the sound decision
methodology in schemes selection. In spite of more than a century
long history of electricity generation from such resources, still its
decisions are either dominated by economics of the project or
guided by vested preferences of donors as well as politicians ruling
the country [2]. Several interest groups with latent agendas create
many controversies and conflicts in developing hydropower plans
in the country [3]. The result is not only a low level of utilization of
resources but also an unsustainable sector development. Some
schemes exhibited a short life time [4], others create major
environmental impacts [5–9] and further there is an imbalance in
equitable access and use of electricity within the country [10].
Hence it is important to review the past development trend and
search for a decision making approach based on scientific evidence
and knowledge.
Present study is focused on hydropower schemes prioritization
to support a national energy policy with respect to hydropower
development creating a “maximum” of benefit based on a multi-
criterion framework.
1.1. Energy and hydropower in Nepal
Nepal is one of the world’s poorest economies, situated in
between fastest growing economies – India and China. Per capita
energy of 16 Gigajoule and per capita electricity of 67 units (kWh)
in Nepal [11] is far below Asian average while electricity con-
sumption is growing annually at rate [12] of more than 10% (80 to
90 MW). Country loosing almost 60% of its hard earned export
income [13] to balance the energy import (fossil fuel). Even export
earning originates from primary productions without value addi-
tion [14] mainly due to lack of industrialization. Industrialization is
halted due to an ever widening energy gap (1000 MW at present)
in the country [15].
Nepal with 6000 rivers crossing the country from North to South
within a span of less than 200 km could produce 83,000 MW but
less than a per cent is explored (727 MW) till date1 Government of
Nepal commits [15] its energy sector development for its poverty
reduction and economic development through the efficient use of
the indigenous energy resources emphasizing hydropower. To be
more specific the national hydropower development strategy opted
classifies five different schemes sizes [11] namely micro up to
1 MW, small 1 to 25 MW, medium 25 to 100 MW, big 100 to
1000 MW and large 1000 MW onwards. The government is putting
1 gation targeting 25,000 MW in 20 years and 10,000 MW in 10
This estimate is based on recent updates from NEA web sites (706 MW),
estimated contribution from AEPC through micro hydro (20 MW) and not recorded
contribution from several I/NGOs and donors at different time equivalent of 1 MW
all its efforts to develop hydropower as a base for country’s eco-
nomic development [16].
1.2. Summary of experiences from hydropower in Nepal
So far, the country has not been able to develop large schemes
though several smaller and medium schemes have been success-
fully implemented. Hydropower sector has more than 100 years of
history in Nepal and enriched country with several lessons. In the
country at present, strong pool of more than 10,000 human
resources [17] mainly with small and medium scale power plants
is available but extremely limited manpower available for the large
schemes. The national grid is already inefficient [18] and power
generation in the country is regionally unbalanced [19]. Mini grids
constitute an option [20] for rural energy supply but low grid
connectivity and capacity is a concern. The development of med-
ium range hydro power plants is crucial for the nation’s social
capital formation for further scaling up hydropower sector in
coming days [21]. Employment opportunity increase with
increasing scale of generation except export oriented large size
plants. For bigger size projects, requires lease land and resettle-
ment and hence almost all large scale projects are opposed by
locals. With developed infrastructure like bridge, road, grid in
recent years, economic viability of hydropower has been enhanced
[22]. Bigger size projects due to economies of scale could be more
economic and could meet energy required to enhance overall
economy. Externally financed projects are costlier and mode of
financing or contracting have a much stronger impact on project
costs than economies of scale [23]. Financing sectors are hesitant
for huge investment risk and prefers testing the business relia-
bility in steps. Allocation[24] of 15 to 20% (Nrs 25,000,000,000) of
national budget for coming 4 to 5 years meet the financial need to
put required generation capacity into the national grid. It is pos-
sible to develop up to big hydro power with available finance
within country if organized properly. Private sector participation is
increasing and interest shifting from small and medium towards
bigger size project [25]. Still huge up front cost, long gestation
time and uncertainties for big and large size plants are challenges
ahead. Environmental concerns related to hydro power [26] poses
reluctances from forest, soil, conservation, water resources making
implementation complicated. Further concerns are raised from
Lake Outburst [5] and geological instability [27] in this Himalayan
region. In this respect smaller are more environments friendly
while bigger size is not. Financial burden will increasing in general
with increasing scale of project size. Within this context up to
lower big size of hydropower, Nepalese expertize and capability is
trustable but specifically for large size is questionable. Lack of
vision and proper planning for best use of available resource is
weak in the country. Recent initiatives for electricity crisis miti-
years are simply ambitious without proper planning analysis
where this study tries to contribute. Government recent interest is
 R.P. Singh, H.P. Nachtnebel / Renewable and Sustainable Energy Reviews 55 (2016) 43–58
more for the bigger size project of few hundred MW capacity like
Upper Tamakoshi (656 MW), Budhigandaki (600 MW), Nausyalgad
(400 MW). Government favors for storage type and multipurpose
medium to large hydropower plants [28]. Big and large scale
plants, specifically with potential of multipurpose use need careful
home work to avoid regret in future [3], [29]. Current policy need
to attract public sector as well as public sector [30]. For long
impacting projects of large size need more discussion and home-
work before accepting multinational proposals. There are several
kinds of uncertainties applicable at different stages [31] and are of
different magnitude. Technical risk increase with capacity [32] of
plant and type of technology adopted, specifically in developing
countries. So is for political risk. Environmental risk associated
with climate change increased [33] with plant capacity but affect
seriously the run off river plants. Economic (market and financial)
risk is of utmost importance for the developers and financers [34].
It is often observed that time and cost overrun in Nepalese con-
text. Social risk specifically due to resettlement and land acquisi-
tion is very high in Nepal [35]. Implementation of hydropower
plants within resource and time is critical in Nepalese context and
adversely impact the project economy if delayed from its planned
schedule [36].
1.3. Structure of the paper
This paper is presented seven sections. The first section is the
introduction of the study with two sub-heading on Energy and
Hydropower in Nepal; and summary of experiences. Second sec-
tions describe problem definition. Third section is on objectives
and tasks of this research. Fourth section describes methodology
followed by essentials of AHP in fifth section. Sixth section pre-
sents results of AHP application with recommendations and
seventh section presents discussion and conclusion.
2. Problem Definition
Different studies in past recommended hydropower schemes as
priority according to specific interest. A report published by World
Energy Council in 2001 states that small scale hydro plants are the
most viable option for rural electrification [37]. Smaller scale
hydro plays an important role in improving the energy access in
remote areas while large schemes are considered best suited for
power intensive industries [38], urban centers and for regional
power supply systems. In Nepal recommends [11] large as well as
big hydropower project for energy export; big, medium and small
schemes for urban as well as industrial supply; and small and
micro scale plants for rural energy access. Such recommendation is
based on targeted end user. The best suited scale of schemes for
overall benefit to the country and prioritizing among five cate-
gories of hydropower is still to be worked out.
In recent time, people awareness in hydropower sector has
increased and strong participation been noticed [39]. Growing
public concern leads to controversies, conflicts, longer gestation
period, cost overrun and slow progress. In Nepal two major ways
debated to meet the energy need, one is to develop several small
plants with least external dependency and another to develop
considerable plant size benefiting economies of scale. It is essential
to assess the relative importance and prioritization, specifically in
a country with limited resources and expertize. Such prioritization
is based on several factors or criteria against which hydropower
schemes need evaluation and comparison. Hence very first task
will be to identify such decisive factors or criteria in detail, with
appropriate weight corresponding to their attribute in hydro-
power selection and should be categorized in groups and must be
organized hierarchically.
45
With more qualitative measurement rather than the quantita-
tive measures, hydropower sector is full of controversies and
conflicts. For decision makers, reaching acceptable a solution
within the conflicting interest is further complicated with several
non-tangible factors and requirements of subjective judgements.
In the decision making process, subjective criteria, though it could
not be measured, is necessary to include and cannot be excluded
from the consideration. Subjective criteria may be more important
than the objective criteria at some decision situation.
Information required for decision making do not come in a
sequence or in properly structured arrangements rather every-
thing looks haphazard and unorganized. Nepalese context of hydro
potential, developing trend and changing context need to be
considered simultaneously instead of peace meal and ad-hoc
approach. The MCA framework ensures a robust analysis whilst
permitting non-financial and distributional issues to be incorpo-
rated. This is prompting analysts to explore and apply MCA orga-
nizing all information together and analyse further in scientific
manner using appropriate tool.
2.1. MCDM and AHP applied to hydropower
Hydropower requires high investment, usually it exhibits low
operation costs and it has a long physical lifetime exposed to several
risks and challenges. One could identify various causes [40] delay-
ing the development of hydro resources in the country and one
could easily realize a fragmented approach in project analysis in the
past. Hydropower is an integral part of water resources use and
must be regarded in conjunction with possible irrigation, water
supply, navigation, tourism etc. to the extent possible [41], [42]. To
maximize the benefit and sustainability, multi-dimensional analysis
is a must. To overcome these obstacles an integrated multi criterion
analysis is needed in Nepal [43] for hydropower development..
Government of Nepal in its tenth five year development plan [44]
specifies eight criteria in general for selection of infrastructure
projects. Further fine-tuning for hydropower prioritization, one can
apply MCDA broadly under technical, social, environmental, eco-
nomic and political criteria. Description of these factors is presented
later in Table 1 under methodology section.
Throughout the past decades hydropower project planning
paradigm shifted from techno economics towards socio- envir-
onmental [45], [46] issues. Worldwide MCDA is gaining popularity
in this domain and it differs with respect to project nature, site
and country policy [47]. MCDM reviews improvement of income of
lower income groups of the society [48] and scrutinizes who will
benefit from the project and who will be exposed to negative
impacts [33]. Hydropower decision making process is extending
beyond the classical model of optimizing a single objective func-
tion such as hydropower output or benefit cost ratio over a set of
feasible solutions. Many conflicting aspects are to be handled at
the same time which shifts the conception of optimal solution of a
problem to satisfactory one [49].
The selection of appropriate size of hydropower project in the
context of Nepal is complicated due to existence of multiple fac-
tors or criteria that have to be included in the selection process.
Those criteria are of two types, namely tangible which could be
measured objectively and intangible which could be measured
subjectively. In the decision making process, subjective criteria,
though it could not be easily measured, is necessary to include and
cannot be excluded from the consideration. Subjective criteria may
be more important than the objective criteria at some decision
situation. Decision without proper weightage and consideration of
those criteria simultaneously, could be biased and that is what
seen in Nepal in past. Decision makers like government authority,
bilateral, donors or investors always justified the project decision
46 R.P. Singh, H.P. Nachtnebel / Renewable and Sustainable Energy Reviews 55 (2016) 43–58

Table 1
Criteria and sub-criteria with descriptions.

Criteria Sub-criteria Elements Descriptions

Technical PA Power availability (annual energy output and days per year with energy supply)
Inf. Available support infrastructure like road bridge, power grid etc.
Dem Energy demand and availability to satisfy the local communities
Cap Country capacity to implement, maintain and operate the project
Lok In country materials, accessories, equipment and finance availability
Social Equ Fairness on equity, allocation of benefits and impacts to local communities
Incl Focus on Inclusiveness, Gender empowerment and vulnerability
Imp Project induced impacts like safety, power supply reliability and displacement
GVN Transparency and governance of the project
SCap Technological knowhow and social capital building
Economical Economics
Pow Generation (Power) capacity of plant
Rev Benefits from the plant, both direct like revenues and indirect like services
Cost Cost of power generation (energy per unit generated) of the plant
Emly Employment generation due to power plant
Local Utilization of available local materials and resources to build the plant
Finance
All Nat Using national financing and available human resources
PFoHi Using partly outside financing and available human resources
Part Using partly outside financing and partly outside human resources
HiCFo Using outside financing and available human resources
All Out Using outside financing and outside human resources
Developer
Gov Government owned and operated
IPP National Independent Power Producers owned and operated
IIPP International Independent Power Producers owned and operated
Mix Mix of national and international JV owned and operated
CCC Community / Cooperative / Corporate owned and operated
Environmental Terres Terrestrial (land, forest) environment degradation due to hydropower project
Mor River morphology, riparian ecology caused (by sediment, flood etc.)
Cont Impacts on water resources (continuity, regularity, quantity and quality)
Waste Solid waste and pollution due to project construction and operation
Abs Water abstraction or damming
Political Access To provide energy access to remote area
MG To integrate with existing local (mini) grid availability nearby
NG To integrate with existing national grid passing nearby
RB To contribute in regional energy balance within country
Exp To supply energy for sale to outside country

in their ways of interest ignoring many other factors of importance
[2], [23].
Over the years, hundreds of MCDA methods have been pro-
posed [50]. The main idea in all of them is to be able to compare
alternatives that have different performance levels for various
criteria, to create a more formalized and better informed decision
making process. Since 1980s, there are several methods invented
and one widely applied is pair wise comparison and outranking
methods [51]. MCDM used in different subjects in hand where it is
found AHP, ELECTRE, PROMETHEE are the one of very popular tool
[52] for natural resources, water management and energy plan-
ning including hydropower. One most popular and trustable tool
called Analytical Hierarchy Process (AHP) is very much appropriate
for water resource policy making [53] in general and decision
making for hydropower in particular [54]. AHP could be applied to
evaluate the hydropower alternatives which may be closely com-
peting or performing quite differently on various goals and criteria
[55]. To make better decision, more than one method is used to
test and verify the decision results. Study shows that those
methods used for decision analysis mostly results similar or same
results [56]. Hence to minimize the complexity of some of the
methods based on nonlinear forms and complex mathematics,
multi- criteria analysis (MCA) based on pair wise comparison is
followed. In Nepalese context, AHP is gaining popularity in deci-
sion analysis for many infrastructure developments including
hydropower and hence same is applied in this study [57].
3. Objectives and tasks
The primary objective of this study is to analyse possible con-
sequences of alternative hydropower schemes characterised by
their capacity (micro, small, medium, big or large) with respect to
a set of given tasks, and to assist in developing a strategy prior-
itizing hydropower schemes in Nepal applying AHP. The specific
objective includes the followings:
1. Identifying factors and sub-factors related to decision on hydro-
power schemes selection
2. Establishing basis for hydropower schemes prioritization and
recommending the most appropriate scale of hydropower in the
context of Nepal.
As a very first task, hydropower information and data need to
be collected from the available literature which should be
reviewed to identify all the possible decisive factors hydropower
selection. Further arranging those factors into appropriate way
suitable to MCDM tool used (AHP in present case). MCDM in
general involves social, environmental and economic as main
decision criteria is also applies to present study. In addition,
hydropower being technical in nature and has strong relation to
political factor are also treated as main decision factor in the study.
These criteria involve corresponding sub criteria and in some cases
embedded decisive elements which need to be organized in
appropriate hierarchy. Details on criteria, sub criteria and elements
 R.P. Singh, H.P. Nachtnebel / Renewable and Sustainable Energy Reviews 55 (2016) 43–58
are presented later in Table 1 and their hierarchy in Fig. 2 in this
report.
Next important task is to select appropriate tool to apply for the
hydropower prioritization. There are several advanced tools
applied in pairwise comparison for alternatives ranking like AHP,
ELECTRE, and PROMETHEE etc. [56]. For hydropower prioritization
of alternatives within conflicting criteria and for the single
objective, an easily applicable tool is to be applied.
Next most important task is to obtain the required information
to feed into the analysis tool. For this, questionnaire will be
development and electronic survey will be followed. One impor-
tant aspect included is to obtain the weight of factors (criteria) and
also preferences over sub criteria as well as elements within it to
perform pairwise comparisons. A project could be reviewed on
particular criteria or sub criteria to make assessment but putting
them together with appropriate weightage is must to make com-
parison or prioritizations. Every criterion must be weighed prop-
erly and will be another important task. To cross check the
weightage of criteria, consultation with experts is important. Time
frame is one important aspect while prioritizing hydropower and
should be viewed in present context, near future and long term.
All criteria along with associated sub criteria must be reviewed
simultaneously with respect to different alternatives and stake-
holder groups. A compromise among the various tasks (criteria)
should be achieved as well as among different stakeholder groups
(characterized by their preference structures). Present research on
alternatives prioritization is based on identified criteria with
assigned weight but all stakeholders’ response is treated as single
group representing them together. A separate exercise is possible
to carry current prioritization along with different stakeholder
group characterizing their preference structures which could be
achieved through a group decision making or involves 2 level
approach of pairwise comparison.
Fig. 1. Methodological steps in application of AHP in the study.
47
Analysis time frame considered to be hold for the next fifteen
years up to 2030 and could be applied even afterwards but this
would require updated information. This time frame could further
be sub dived in terms of present context (5 years from now) and
immediate future (2020–2030) to prioritize the scale of hydro-
power projects in planning.
4. Methodology
This research follows from hydropower background informa-
tion collections; questionnaire survey; data synthesis and struc-
turing of hierarchy; results from AHP application and finally sen-
sitivity analysis. These steps are described in following sections.
The obtained information is processed through Analytical
hierarchy process (AHP) using software called Expert Choice [58].
The work flow, as shown in Fig. 1, is followed in the study and
explained in following sub sections.
4.1. Background information or the assessment
In depth information collection is important task in this
research which identifies the hydropower decision related infor-
mation. This will be helpful to obtain two separate objective of this
research as mentioned earlier. Further to obtain primary infor-
mation to be used in this research for pairwise comparison, a list
of such decisive elements need to be listed. The factors and sub-
factors considered in this analysis are listed from the literature
reviewed and stakeholders as well as expert consultations. In this
regard national and regional documents, not available via internet,
perhaps not in English, web links and scientific journals were
reviewed specifically covering MCDM, AHP and hydropower in
Nepal. Several of the important documents reviewed are already
mentioned in Sections 1 and 2. In addition to those mentioned
48 R.P. Singh, H.P. Nachtnebel / Renewable and Sustainable Energy Reviews 55 (2016) 43–58
earlier, other important documents and reports reviewed includes
environmental reconsiderations for hydropower [59,,60], socio-
political views [61] sediments problem [62], geomantic and nat-
ural hazards [63], EIA guidelines, SIA guidelines, sustainability
requirements.
To meet the overall objectives of the research, hydropower
analysis in the present study should be viewed and measured with
respect to certain criteria and sub criteria. While economic, social,
environmental and political criteria (goals) are very common in
MCDM applications, one additional Technical criterion is included.
Due to the fact that hydropower requires a sound technical edu-
cation and training at several levels, this being especially relevant
for Nepalese conditions, technology has been integrated as specific
criteria that is relevant for decision making. Finally five main cri-
teria with corresponding desired directions (expectations) are
considered in the present study are as follows:

Technical:Maximize self-reliance

Social:Maximize social benefits

Economic:Enhance country economy

Environmental:Minimize adverse impact

Political:Maximize national progress
As briefly shown in Table 1, Technical criteria consists of sub
criteria like power availability, available infrastructural support,
energy demand, country technical capability and available in-
country resources to implement hydropower projects. Similarly
social criteria measures social equity and fairness on benefit dis-
tribution, inclusiveness of poor as well as gender mainstreaming,
induced secondary impacts as enhanced safety, power availability
etc., transparency and governance issues and social capital for-
mation for more hydropower replication in the country. In eco-
nomic criteria, three major sub criteria considered are project
(i) economics which include power generation, revenues, cost,
employment and local (on site) resource utilization; (ii) finance
which determines the project financing modalities and hence here
information collected includes details about financial resources
available fully from in-country up to complete out sourcing and;
(iii) developers views which include various operational models of
hydropower plants. Next one is environmental criteria which
evaluate impacts at terrestrial, river basin, water quality, water
availability, waste generated and water continuity. The last one is
political criteria which includes policy on energy access, mini grid,
national grid, regional balance on energy generation and energy
export issues. In Table 1 the final grouping of five criteria which
further sub-divided into total twenty three sub-criteria are pre-
sented. Some of the sub criteria further evaluated on embedded
elements within it.
4.2. Questionnaire and survey
Then next step is preparing questionnaire and conducting
survey. Questionnaire prepared keeping in view the objective of
this research and all required information for future pairwise
comparisons through AHP Expert Choice. Study reveals that
hydropower development in Nepal is primarily based on eco-
nomics of the project from government perspectives [64] and it
also includes financial aspects for investors and developers per-
spectives. In addition they are also examined through environ-
mental and social perspectives. Also hydropower development
needs to be compliant with political perspectives as well as
technical viability. Hence the questionnaire developed around all
these five main criteria, associated sub criteria and elements
within sub criteria if any. Questionnaire prepared to access their
corresponding preferences (weightage). This questionnaire sur-
veyed total of 13 questions with options to rank on preference
scale. All options in each question are responded with numerical
value in between 5 to1 as highest preference to lowest respec-
tively by the responders. These questions were focusing on pre-
ference of respondent on different criteria, sub criteria and ele-
ments in hydropower selection.
To make an unbiased opinion, different groups (stakeholders)
were involved in the survey. Those important groups who influ-
ence the hydropower sector development in the country are
economist, sociologist, ecologist, government officials, planners,
engineers, developers, financers, contractors, entrepreneurs, civil
societies, beneficiaries, environmentalists and public representa-
tives. Those groups may have different degree of influence but
their contribution in decision making is worth to consider. In
present research, for simplicity, instead of group wise comparison,
they all are treated in one group of stakeholder’s response. Also
attention paid to balance number of respondents from each group
of stakeholders to avoid any biasness. To make survey more reli-
able, a minimum of 70 responses expected and accordingly double
of this number (135) respondents were identified. This list was
developed through reviewing different lists of experts listed in
different documents, expert’s roaster under different professional
organizations or committees, web links of related organizations
and personal communication. Emphasis was to obtain their email
address and also to obtain phone or contacts details to follow up if
required. Availability of name and details of respondent through
various sources was basis to list the respondent which avoid
biasness and follow survey within defined boundary. In present
case respondent are all within boundary related with hydropower
but belonging to several groups and at different level of pro-
fessionalism. Questionnaire sent to potential informants. Follow-
ing closely through reminder mails and phone calls, 110 respon-
dents were confirmed receipt of questionnaire. Only 90 of them
responded within a set time frame of three weeks were included
while 3 late responses were excluded in the analysis. Out of 90
responses received on time, 5 of them were rejected due to
incomplete response and their reluctance to complete the ques-
tionnaire in spite of appeals.
While selecting criteria [65] systematic, consistency, inde-
pendency, measurability and comparability were taken into
account. Different five scales of generation schemes in this
research are treated as alternatives in this study. Before presenting
the questionnaire to the concerned personnel, it was pre-tested to
ensure clarity to get the correct response. The research work
involving the value judgment on various factors needs clear
interpretation and definition on the factors and sub factors used.
For this purpose a written explanation was included with ques-
tionnaire. Questionnaire with options of preference ranking (5 for
highest preference to 1 for lowest) was new to most of the
respondents. Clarification on the format and factors are made to all
the respondents. Additional clarification and explanation made to
the respondent, if they are not clear or confused with the initial
briefing. Some of the respondents even made their judgment
discussing with the researcher, in this case they got clarification
instantly on each factors (Table 2).
These respondents belonging to different stakeholders groups
are also belonging to various organizations or institutions. For
example, out of total 13 technical stakeholders 2 are freelance
consultant, 3 are from international consulting companies affili-
ated to Nepal hydropower development, 3 from public sector
(Nepal Electricity Authority), 2 from private power producers,
2 from multilateral organization (United Nation Development
Program) and 1 from academic institution. Similarly out of 13
sociologist stakeholders include are freelance consultant, acade-
micians, community beneficiaries, social scientist with NGOs and
INGOs. Hydropower research at this stage involves beneficiaries all
over the country whether living in cities or in remote. Special
 R.P. Singh, H.P. Nachtnebel / Renewable and Sustainable Energy Reviews 55 (2016) 43–58
attention paid to receive responses from some of the beneficiaries
belonging to the project site communities. Many of such respon-
dents including those from the generation sites communities are
received. Their responses are placed in the mainly under sociolo-
gist, economist, environmentalist and technical experts instead of
forming separate local people.
4.3. Data synthesis and structuring of hierarchy
All survey responses were tabulated into an excel file. Further, with
respect to the set objective of this research, responses were synthe-
sized for AHP application. Fundamentals of AHP are present section
five of this paper. Corresponding to major criteria (factors), received
responses were synthesized for the pairwise comparison and hence
weight determination of those factors using geometrical mean average
method. Also for sub-criteria (sub-factors), those collected data were
prepared to make the comparison by the researcher to meet the
Table 2
Overall distribution and response of the questionnaire.
Source: Electronic Survey conducted in Nepal.
Distribution and Response
Total Questionnaire Distributed
Response Received
Total Accepted Responses
Stakeholders from
Technical and Hydropower professionals
Sociologist
Economist
Financing (public, private; local regional, national level)
Environmentalist
Developer and Suppliers
Planner, Decision maker and Govt. Officials
49
immediate higher level objective. These data synthesized were ready
for further use in AHP software Expert Choice.
The formulation of hierarchy model to address any decision pro-
blem is more related with art than science. Starting with a sound
problem definition each sub problem has to be turned into a sub-task
characterised by one or more criteria measuring the achievements of
an alternative. The hierarchy of the tasks can be identified by setting
one objective at highest level followed by factors & sub-factors at mid-
level and alternatives at the bottom level of hierarchy to represent the
decision process. In the present research, hydropower prioritization is
on top as goal and is dependent on several decisive factors. Those
factors in the present research are classified in three levels as shown in
Fig. 2
Different levels of hierarchy in the research need pairwise com-
parison at different level. At the bottom level, elements and sub cri-
teria with respect to alternatives are compared by the decision maker
based on his understanding from the secondary sources, questionnaire
survey conducted and expert consultation. Above this level is pairwise
comparison completed in between sub criteria and criteria is based on
survey conducted. Similarly at the highest level of pairwise compar-
ison in between criteria and the goal (objective) is based on the survey
Number responses. The consistency on each matrix has been checked during
data entering and processing in AHP. Consistency improvement has
110
been carried out without affecting the priority of the judgment.
90
85
4.4. AHP application to rank hydropower schemes
13
13
11 To simplify the decision making, researcher in this case is single
9 decision maker. DM accomplished a pairwise comparison in AHP
12 software Expert Choice. Surveyed stakeholders belong to different
13
14
groups but are treated and analyzed as one collective response and not
group wise.
Fig. 2. AHP Model.
50 R.P. Singh, H.P. Nachtnebel / Renewable and Sustainable Energy Reviews 55 (2016) 43–58

Hydropower alternatives accessed using Expert Choice software
was further verified through experts’ consultation. Experts were also
consulted to discuss their views on weight obtained for criteria (main)
through questionnaire survey. With regard to final ranking, the highest
scorer is the most prioritize scale of hydropower development in
Nepal whereas that one with the lowest score will be the least
prioritized. Similarly sensitivity analysis detects decisive elements in
Hydropower prioritization in Nepal.
4.5. Sensitivity analysis
Sensitivity analysis is very important requirement where the input
data are slightly modified in order to observe the impact on the
results. As complex decision models may be inherently unstable, it
allows the generation of different scenarios, which may results in
other rankings and further discussion may be needed to reach a
consensus. If the ranking does not change, the results are said to be
robust otherwise it is sensitive. In AHP, the sensitivity analysis can be
done on three levels: weights, local priorities and comparisons. The
sensitivity analysis in Expert Choice allows the variation the weights of
the criteria only as input data.
5. Essentials of AHP
AHP is a decision-aid that can provide the decision maker (DM)
with relevant information to assist the DM in choosing the best
alternative [66] or to rank a set of alternatives. It is one of the easily
applicable MCA tools which generally contains the stages [67] of
choosing decision options and evaluation criteria, obtain performance
measures for the evaluation matrix, transform into commensurate
units, weight the criteria, rank or score the options, perform sensitivity
analysis and finally make a decision. A decision maker specifies the
desired outcome as a goal. The goal provides the target that indicates
preferred or expected results. Solutions can be uncovered in many
ways including managing by talking about, drawing ideas from alli-
ance partners, environmental scanning, reading and conferencing,
commissioning reports, innovation attempts and other ways to acquire
knowledge. Technical, social, environmental, economic and political
aspects need to be hierarchically structured in attributes and goals
since the conception of project [68], [69]. All criteria along with
associated sub criteria and alternatives must be reviewed simulta-
neously with respect to major stakeholders. Finally different criteria
and stakeholder’s views need to be resolved within a framework of
understanding and mutual compromise [70]. In this regard AHP is
widely used for decision making based on several groups of decision
makers [71] involved where groups conflicts among different interest:
stakeholders, owners, managers, ecologists and public may have
similar or specific goals.
5.1. Principles of AHP
The AHP is based on the axiomatic foundation [72] that pro-
vides the theoretical base and on which the method is founded.
The axiomatic foundations are as follows:
among things that are not too dissimilar with respect to a
common property and, hence, need for arranging them within
an order preserving hierarchy.
3. Dependence of a lower level on the adjacent higher level. The third,
synthesis axiom states that judgments about the priorities of the
elements in a hierarchy do not depend on lower level elements.
This axiom is required for the principle of hierarchic composition to
apply and apparently means that the importance of higher level
objectives should not depend on the priorities or weights of any
lower level factors.
4. The idea that an outcome can only reflect expectations when the
latter are well represented in the hierarchy. Individuals who have
reasons for their beliefs should make sure that their ideas are
adequately represented for the outcome to match these expecta-
tions. It is important because the generality of AHP makes it pos-
sible to apply AHP in a variety of ways and adherence to this axiom
prevents applying AHP in inappropriate ways.
The work on the AHP involves the estimation of priority
weights of a set of criteria or alternatives from a square matrix of
pair-wise comparison A¼ [aij], which is positive and if the paired
comparison judgment is perfectly consistent it is reciprocal, i.e.,
aij ¼1/aji for all ij ¼1, 2, 3,.., n.
The final normalized weight of its i-th factor, wi, is given by
!
Xn
wi ¼ aij= akj 8 i ¼ 1; 2; …:; n:
k¼1
In the real life judgment an error on the judgment is una-
voidable. The suggested eigen value method computes w as the
principal right eigen value of the matrix A or w satisfies the fol-
lowing system of n linear equations:
A w¼ λ max w,where λ max is the maximum eigen value of A.
This is to say that
P
n
aijwj
j¼1
wi ¼ 8 i ¼ 1; 2; …; n:
λ max
The natural measure of inconsistency or deviation from con-
sistency, called consistency index (CI) is defined as
λ max  n
CI ¼
n 1
The consistency index of a randomly generated reciprocal
matrix from scale 1 to 9, with reciprocals forced, for each size of
matrix called random index (RI) is presented in Table 3
Consistency ratio (CR) ¼CI / RI, where RI is function of matrix
size and CR o0.01 is as an acceptable limit, otherwise need to be
revised and adjusted accordingly.
Another task in the hierarchy is the synthesis of the judgments
throughout the hierarchy in order to compute the overall priorities
of the alternatives with respect to the goal. The weights are cre-
ated by summing the priority of each element according to a given
criterion by the weights of that criterion.
5.2. Experiences with AHP in hydropower assessment

1. The reciprocal property that is basic in making paired compar- Guidelines for formulation of a hierarchy are available in the lit-
isons. If PC(EA,EB) is a paired comparison of elements A and B erature and some prototype hierarchies are also available which have
with respect to their parent, element C, representing how many been numerous tested thoroughly is [21]. However, it has to be
times more the element A possesses a property than does ele-
ment B, then PC (EB,EA) ¼1/ PC(EA,EB). Suppose A is 5 times Table 3
larger than B, then B is one fifth as large as A. Random index (RI).
2. The second, or homogeneity axiom, states that the elements Source:[73].
being compared should not differ by too much, else there will
Matrix order 1 2 3 4 5 6 7 8 9 10
tend to be larger errors in judgment. Homogeneity that is RI 0.00 0.00 0.58 0.90 1.12 1.24 1.32 1.41 1.45 1.49
characteristic of people’s ability for making paired comparisons
 R.P. Singh, H.P. Nachtnebel / Renewable and Sustainable Energy Reviews 55 (2016) 43–58
considered that each model is unique in a way in the sense that
specific problems are addressed in a different environment which is
defined by the legal, administrative, political, socio-economic level of
development and ecological settings. There are many MCDM related
literature dealing with water resources and hydropower at interna-
tional level. One of the mostly preferred tools is AHP [74]. AHP
application in Nepalese context of infrastructure project analysis is
expanding in recent days [43]. Unfortunately literatures related to
hierarchy analysis on Nepalese hydropower planning are limited.
Some of them are very much useful in present study [21,,36].
An over view of the application of AHP in general [75] and
particularly for the hydropower context [76] explains its expansion
in recent days. Specifically for the Nepalese context of hydropower
at least few such initiatives could be found [55]. A study recom-
mended the small to medium scale as priority for hydropower
development by applying AHP [77]. In a similar multi criteria
based study [78] gave lowest ranking to the widely disputed large
scale Chisapani project in comparison to other feasible but smaller
size alternatives nearby. A decade back a study including several
factors by World Bank and also by [79] underlined the importance
of developing small and medium hydropower projects at
that time.
5.3. Comparisons of alternatives in AHP
One of the most widely applied pairwise comparison techniques is
the Analytic Hierarchy Process [80]. These approaches involve com-
paring criteria and alternatives in every unique pair comparison. Based
on the measured value (both objective as well as subjective) of
respective criteria, in AHP application, DM makes pairwise comparison
with regard to attaining the objective of research. The comparison can
be made to attain criteria weights and decision option performance
scores. Various scaling systems can be used. AHP decision makers are
asked to express preference for one criteria/option over another in
each pair on a nine point scale as shown in Table 4
6. Results and recommendations
Present study to evaluate and prioritize five alternatives schemes
(scale) of hydropower plants with five main criteria, 23 sub criteria
and 15 elements of sub criteria covers every aspects and represent all
stakeholders concerns of hydropower sector. Along with the results
obtained from the AHP application, stability or sensitivity of the result
is also important in order to reach recommendations to strengthen
hydropower development in the country.
6.1. Results
AHP application considers factors, sub factors and embedded ele-
ments simultaneously to prioritize the available alternatives. Hence
Table 4
Scale of pair-wise comparison.
Source: [81].
Intensity of importance Definition
1 Equal importance
2 Weak
3 Moderate importance
4 Moderate plus
5 Strong importance
6 Strong plus
7 Very strong or demonstrated importance
8 Very very strong
9 (absolute) Extreme importance
51
synthesis of overall judgment represent consensus of all stakeholders
of AHP model application which takes care of individual preference or
importance of each factor, sub-factor and alternatives with respect to
the overall objective of the problem. Depending upon the factors dif-
ferent alternatives are prioritized differently as shown in Fig. 3.
Here are the results of prioritization among alternatives
obtained corresponding to five criteria. We can see that for tech-
nical criteria large schemes are very much preferred and closely
followed by micro schemes and then after by big schemes. Tech-
nically less importance is given to medium and least to small.
Similarly on social criteria medium schemes are most preferred
with strong lead over all other alternatives. Especially large
schemes are least recommended on social criteria. On economic
criteria big schemes are on top priority but closely competing by
large and medium schemes. On environmental criteria, highest
priority scored by micro and priority gradually decreases towards
large schemes. Policy criteria recommends medium schemes as
highest followed by small and big schemes. All five alternatives are
closely competing on these criteria which symbolize that there
seems no special preference or prioritization on schemes on
generation capacity rather all different schemes are recommended
by planners and policy makers with almost equal importance.
The criteria wise preference analysis gives us an indication that
economics criteria prefer more energy generation whereas envir-
onmental criteria favors opposite. Though technical criteria are
almost considering all alternatives close to each other, social cri-
teria highly recommends medium schemes.
These criteria are weighed differently. For criteria at highest
lave, based on responses obtained from questionnaire survey,
highest weightage is given to economic (24.4%), followed by
political (21.0%), technical (20.1%), socio (18.9%) and environment
(15.5%). This is shown in Fig. 4.
Considering all criteria simultaneously and processed pairwise
comparison in AHP using Expert Choice software, overall result
obtained in this study is presented in Fig.5. Each scale of schemes
could best fit in some context and benefit the country in different
ways. In the present context, considering all goals and respective cri-
terion, ranking of alternatives are shown in Fig. 5. It was found they all
are important and closely competing with each other but for the
overall national benefit, it is important to rank and identify the best fit.
One can see the best and the worst among the alternatives are very
much distinct while three other alternatives stand at close proximity.
It is also seen that the two extreme scales (micro and large scale
generation) of schemes fell at the lowest priority whereas medium
stands clearly at highest priority. Second highly preferred is big
scheme which is followed by two of the alternatives closely competing
with each other are small and micro schemes. It is important to note
here that medium schemes which is most preferred schemes on social
and political criteria but placed third on both economic and environ-
mental criteria and even fourth on technical criteria, scored highest on
overall ranking. Weight assigned to criteria is important in making
Explanation
Two activities contribute equally to the objective.
Experience and judgment slightly favor one activity over another.
Experience and judgment strongly favor one activity over another.
An activity is favored very strongly over another; its dominance demonstrated in practice
The evidence favouring one activity over another is of the highest possible order of affirmation.
52 R.P. Singh, H.P. Nachtnebel / Renewable and Sustainable Energy Reviews 55 (2016) 43–58

Fig. 3. Priority of alternatives corresponding to main criteria.

final ranking and must be carefully accessed. In this research it is AHP analysis also provides us alternatives wise preferences of
followed through the survey and finally discussed with experts criteria. As shown in Fig. 6, all alternatives are separately presented
working in hydropower sector who were in agreement with the cri- with criteria used in ranking. For example medium scheme is most
teria weightage of this research. preferred on economic criteria whereas it is least preferred on
 R.P. Singh, H.P. Nachtnebel / Renewable and Sustainable Energy Reviews 55 (2016) 43–58
environmental criteria. Political and socio criteria equally prefer
medium schemes and almost the same level of preference by
technical criteria. Looking into this figure it is understandable that
economics is leading (highly) preferred criteria for schemes having
higher generation capacity whereas environmental preferences are
highest for those having lower generation capacity. Medium
schemes are most preferred on social criteria whereas large
schemes are least preferred on this criteria.
One can perform the pairwise comparisons at different level to
analyse contribution of various sub criteria and embedded elements
at different level of hierarchy. Likewise five main criteria analyzed
earlier, in AHP similar analysis could be followed for sub criteria and
elements of sub-criteria. For example Economics, Finance and
Developers (EFD) as criteria has three sub criteria which contribute
in following manner in mid-level of hierarchy in present study. Here
with regard to economics as sub criteria the highest priority is
assigned to big schemes closely followed by large and then by
medium. This sub criterion finds small and micro schemes with less
importance. Similarly on financial sub criteria big schemes score
highest but closely followed by micro, medium and small schemes
but large schemes remains on least priority. Against developer's
perspectives as sub-criteria most recommended is big schemes
closely followed by large and medium but less preference to small
and least to micro schemes (Fig. 7).
At the third level of comparison similar like criteria or sub cri-
teria, one can analyse elements within sub criteria. For example
within Economic sub criteria, contribution of different elements
could be analyzed as shown in fig. On power as elements of this sub
criteria preferences decreases substantially from large to micro
schemes. Similarly on revenues and earnings most preferred
schemes are large closely followed by big and medium schemes
while small and micro remains lower on priority. Similarly against
cost high priority is assigned to big followed by medium and then
by large and small schemes whereas micro remains at lowest. For
employment the best preferred are big followed by large and
medium but others are on lower preferences. Against the local
Fig. 4. Weight assigned to criteria.
Fig. 5. Overall priority of alternatives considering all criteria, sub criteria and elements of decision.
53
resource utilization perspective, best alternative is micro followed
by small, medium, big and large schemes (Fig. 8).
6.2. Sensitivity analysis of the result
We might have uncertainty in data and in preferences and its
impact on overall ranking and its stability must be checked through
sensitivity analysis. There could be uncertainties in the data pro-
cessing, models applied (e.g. transferring data into impacts) and in
preferences. Further, some of the information and data used may
not be correctly understood, expressed or reviewed. Allocations of
weight to the goals and corresponding criteria might have errors
because of subjectivity in its assessment. All these factors could be a
major source of error and cause the end result to be different than it
would otherwise be. It is thus important to check that slight var-
iations of the parameters (weight allocated) don't have a large
influence on the analysis results (rankings). Thus, the objective of
the sensitivity analysis is to determine the change in the alternative
ranking with the change in the weight allocated to the goals and
criteria. The sensitivity could be analyzed only with the factor of
one level below the objective. Hence, the sensitivity analysis,
another important feature of AHP application, will verify the
trustworthiness of ranking obtained.
Gradient sensitivity of each and every criteria reviewed with
change in weightage to determine the sensitive factors as shown
in case of technical criteria in adjacent Fig. 9.
Closer review on all factors and their possible (10–20%) change
in weight assigned at present may not change in priority order
except interchange of priority order in between micro and small
hydro. However, EFD (economic, financial, developers) factor whose
weight assigned is 0.244 may change along with changing country
economy and may impact the priority considerably as shown in
sensitivity graph Fig. 10.
It is observed that medium schemes always remain at top as first
priority and followed by big schemes as second priority. Similarly
large scale schemes are lowest priority. These alternatives are not
much sensitive to weightage assigned to the factors. Hence, those
weight allocations for the goals are also stable and the ranking
obtained is trusted Fig. 11.
6.3. Policy implication and recommendations
Strategy formulation is an important and complex aspect of
hydropower in Nepalese context which presents a number of
challenges. As found in many instances,hydropower schemes
selection have focused on fragmented approach dominated mostly
by economics or demand analysis and decision on project selection
on ad-hoc manner in Nepal without the holistic vision of the pro-
blem at stake. Moreover the development of hydropower policies
involve many decision makers and can affect numerous stake-
holders with conflicting interests related to specific policies [76].
Further analysis of a policy from single point of view must be
analyzed with appropriate trade off based a holistic approach. Based
on this reasoning it is to state that hydropower planning has
54 R.P. Singh, H.P. Nachtnebel / Renewable and Sustainable Energy Reviews 55 (2016) 43–58

become a multi criteria problem and the definition of sound policy
requires the application of analytical tool based on multi criteria. In
the absence of such a holistic and integrated approach, the devel-
opment of sustainable hydropower would be difficult. Additionally,
the design of hydropower policies should be based on inclusive
approaches enhancing increased number of diverse but important
stakeholders in the process of developing important policies for the
sector to grow. An analysis of the literature pertaining to this
context has found social or institutional opposition has adverse
effect on overall policy implication.
Approach presented takes care of all stakeholders, factors with
sub factors and their embedded elements in decision making on
scheme prioritization leading to assist appropriate policy develop-
ment. It is important to note that in present research, all those
alternatives are found important and some of them are leading
quite a head but many others are competing closely with each
other. One can identify from the end results that which alternatives

Fig. 6. Weight contribution of criteria with respect to alternatives.

Fig. 7. Contribution of sub criteria (Economic, Finance and Developers) to its corresponding criteria EFD.
R.P. Singh, H.P. Nachtnebel / Renewable and Sustainable Energy Reviews 55 (2016) 43–58 55

Fig. 8. Contribution of elements within sub criteria of Economic under criteria EFD.
56 R.P. Singh, H.P. Nachtnebel / Renewable and Sustainable Energy Reviews 55 (2016) 43–58

Fig. 9. Gradient sensitivity of Technical criteria.

Fig. 10. Over all distribution of priority in present research (base case).

Fig. 11. Change in ranking due to increased weightage to EFD.

should be on priority among those mutually exclusive alternatives.
This will help policy makers to develop strategy and policy
accordingly. Hence in this research medium scale best suits into the
present national context and policy support could be thought about.
Similarly next level of preference with supportive policy should
consider big scale hydropower development in the country.
Further cross check and verification of results possibly through
workshop involving stakeholders on hydropower prioritization is
recommended for further policy strengthening in the country.
7. Discussions and conclusions
In a least developed country like Nepal sufficient and reliable
database does not exist. An easily and quickly understandable
method in decision analysis would play an effective role in this
situation.
From past study compared with present research through AHP
application observed that preference is shifting from its earlier prefer
scale of small and medium towards medium and big size of hydro-
power development. Government focuses on big size projects and
 R.P. Singh, H.P. Nachtnebel / Renewable and Sustainable Energy Reviews 55 (2016) 43–58
already initiated super 10 projects as nation’s priority. Economies of
scale in power generation are attracting more plants of medium and
big size. While large size projects under consideration and discussion,
other scales of projects are progressing well.
Study found medium scale of power generation is best suited
followed by large hydropower in present country context and
likely immediate future. Small hydropower is on third priority
followed by mini and micro as fourth proffered scale of hydro-
power. Large hydropower of more than 1000 MW is at the least
preference in Nepalese context at the moment.
Briefly mentioned here are some important results as follows.
Most preferred alternative: Medium hydropower schemes
Most important factor: EFD (economic, finance, developer)
Most important technical sub factor: PA (Power Availability)
Most important social sub factor: Equity
Most important EFD sub factor: Economics
Most important environmental sub factor: Continuity
Most important planning sub factor: Access
Most important elements in economic sub factor: Revenues
Most important elements in finance sub factor: All national
financing
Most important elements in developer sub factor: IPP (inde-
pendent power Producers)
Most stable priority score among alternatives: Medium hydro-
power schemes
Among the considered factors on hydropower prioritization, eco-
nomic factor is of most importance and likely to remain on highest
weightage in coming days. It will even increase with strengthening
economy and neighboring market demand for power. This factor is
found most sensitive. With changing weightage, on both sides either
decreasing or increasing, it is changing the priority order of hydro-
power alternatives.
With changing international as well as national scenarios, specifi-
cally on economics with time, present prioritization may get changed.
As such change takes place slowly; the prioritization order will remain
almost same for the coming five years to ten years and almost similar
then after. With strengthened future economy of Nepal and strong
market existing in neighboring countries may place large and big
hydro on priority in long term.
Proper evaluation of hydropower schemes is important to tap
abundant hydro resources in the country. AHP is one of such widely
used tool capable to analyse and prioritize Nepalese hydropower. The
questionnaire based AHP application is found to be appropriate tool
especially dealing with the value trade-offs. The method is more suited
where less to do with the numerical data and more with value
judgment. Use of AHP to prioritize the scale of hydropower in Nepal
seems one of suitable methods. AHP applied to analyse hydropower
could provide better insight about decision elements and their com-
parison. Through visual results and graphics, it enable decision maker
to understand the smallest differences among the alternatives and
help to rank them. This tool could be of use for the researchers, pro-
fessionals, planners and all other stakeholders in Nepal and countries
alike. This simple analysis could give similar results which one could
reach with more complex multi criterion analysis.
Acknowledgment
Authors would like to thank the anonymous reviewer whose
comments and suggestions improve the quality of the manuscript.
57
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