Nepal's Power Potential

Nepal is making strides in hydropower development to meet domestic demand of electricity and export it to neighbouring countries. At a time when the economic crisis has hit almost every sector of business, the increased electricity generation offers hope to reduce widening trade deficit and make a shift from import-based economy. Encouraged by the accelerated pace of development of hydropower projects by both private sector and state agencies, Prime Minister Pushpa Kamal Dahal ‘Prachanda’ said that Nepal would be a net exporter of electricity by 2025. His remarks came at the Power Summit 2023 that commenced in Kathmandu on Tuesday. No doubt, the energy sector can be a strong base for prosperity but challenges are galore to harness green energy and utilise it for the modernisation of agriculture and giving impetus to industrial growth. Investment, policy coordination and win-win power purchasing deals, among others, are necessary for the development of hydro sector. 

Nepal is endowed with over 6,000 rivers, streams and tributaries. It has the potential to generate over 50,000 megawatt of electricity but its current installed capacity stands at about 2,000 MW, with Nepal Electricity Authority’s projects contributing 1,190 MW and private sector contributing 825 MW. Nepal is set to generate 15,000 MW of electricity within 10 years. However, the surplus energy is not fully consumed during the wet season. The authorities have been calling for a boost in consumption of electricity to increase the government revenues and promote clean energy. It is a matter of great satisfaction that today Nepal generates more power than the people consume. Nonetheless, many Nepalis have no access to energy as the grid has not been expanded to the nooks and corners of the country. It requires adopting off-grid technologies to distribute power to all Nepalis.

Power consumption has grown by 15 per cent annually in Nepal for the past couple of years. Its demand in the industrial sector is likely to grow if the transmission lines are further expanded and reliable supply is guaranteed. The government should give priority to electricity consumption in agriculture, industries, cooking and transportation sectors to reduce excessive dependency on the fossil fuels and LPG. Nepal's agro sector holds huge potential for growth, with around 65 per cent people involved in it. If the farmers are provided electricity at subsidised rate, it will encourage agro production and the consumers can get foodgrains at cheaper price.  Similarly, if all the households use electricity, it will help lessen dependency on imported LPG, which will in turn check the spending of hard-earned foreign currency. This will also protect forests, thereby fighting the greenhouse gas emissions. 

It is notable to recall here that Nepal has pledged to attain a net-zero emission by 2045, and increase the share of clean energy in total energy demand to 15 per cent and forest cover to 45 per cent by 2030. As the country possesses the vast water resources and solar power potential, it is not difficult to achieve these climate goals. With a view to attaining the long-term green growth and build resilience against the climate-induced disasters, Nepal espoused the Green, Resilient and Inclusive Development (GRID) strategy in 2021. The two-day Power Summit entitled 'Broadening Green Energy Markets’ has dwelt on Nepal's electricity market and demand, transmission lines, innovation and international electricity trade. It is expected to inspire domestic and foreign investors to invest in hydropower sector as well as promote power trade outside the country.