Nepal has made big strides towards electricity generation and supply. Currently, it is producing 1,900 megawatts of electricity. The amount of this hydroelectricity is below expectations given that the country has the potential to generate more than 43,000 MW hydroelectricity and higher if cascade projects are constructed. Similarly, over 93 per cent of total population has now access to electricity. This is indeed good news for the country that once suffered acute power shortage. However, Nepal Electricity Authority (NEA), the sole power distributer, is now unable to utilise all produced electricity. Around 500 MW of electricity is being wasted daily during the monsoon season. In order to stop the wastage of electricity, some turbines of hydropower projects have been also shut down.

On the other hand, most of the industries have failed to operate in their full capacity owing to the shortage of electricity supply. A recent study conducted by the Confederation of Nepali Industries (CNI) reveals that around 70 per cent industries depend on generators to run their plants. This is paradoxical situation that emerged from shabby transmission infrastructure and unstable power supply. Many transmission lines, sub-stations and transformers, which were built many years ago, fail to supply sufficient electricity to the industrial establishments and household consumers. This has forced the people to endure power outage and arrange backup power during the load-shedding. The government receives more than 57 per cent of revenues from 10 per cent industrial consumers and the rest 90 per cent from household power consumer.

The other day, NEA Managing Director Kul Man Ghising expressed his serious concerns about the increasing energy wastage during the rainy season. In order to utilise the surplus energy, it has become imperative to make a policy change focusing on the construction of reliable transmission lines which is essential for domestic electrification as well as power trade with neighbouring countries. The government had opened the license of hydropower projects to the private sector three decades back but it paid little attention to construct modern transmission and distribution system essential to boost power consumption. In the absence of transmission lines, many hydro projects could not be finished. Experts have suggested the government should invest in agriculture sector to increase the power consumption. It needs to build facilities such as irrigation, cold storage and processing industries.

The government and investors have confronted the chronic problems such as land acquisition, forest clearance and local obstruction in completing the transmission lines in time. They need to take the concerned stakeholders including the local people, political parties and social organisations into confidence to sort out those obstacles. The government has recently announced to reduce the electricity tariffs for the household consumers, enterprises and irrigation facilities. There is up to 80 per cent discount on the electricity used for irrigation facilities. If the agro-sector is mechanised and powered by electricity, this will not only increase the income of farmers but also help the government to accrue revenues in the form of tariff. Likewise, the government should get the private sector involved in the cross-border energy trade through conducive legal mechanisms but for this the power producers must develop their capacity. Nepal’s economic growth largely relies on its capacity to harness the immense water resources.