Stop ignoring Nepal’s hydropower reality

Nepal's vast hydropower potential, theoretically estimated at 83,000 megawatts with about 43,000 considered feasible, remains largely untapped. The country currently generates only 4,200 megawatts, meeting a domestic demand of roughly 2,000 to 2,200 megawatts. Despite a record Rs29.32 billion earned from electricity exports to India and Bangladesh last fiscal year, this success is built on an unsustainable model heavily dependent on selling surplus monsoon power while importing electricity during drier periods.

The window for capitalizing on the Indian energy market is closing as India rapidly diversifies its own energy sources, including significant investments in solar and nuclear power. By 2036, India's demand is projected to reach 458.7 gigawatts, but it will increasingly scrutinize Nepal's electricity based on price, reliability, and availability. Nepal must address this reality by resuming stalled power purchase agreement processes for projects totaling approximately 16,500 megawatts and negotiating long-term export agreements of 15 to 25 years.

Furthermore, inadequate transmission infrastructure leads to the wastage of about 1,000 megawatts of generated electricity. Prioritizing cross-border transmission networks is essential, but Nepal also needs to accelerate the development of reservoir-based hydropower projects, such as Upper Arun, Dudhkoshi, and Budhigandaki. These projects are crucial for providing a consistent, year-round electricity supply, mitigating the current reliance on run-of-river plants that are dependent on monsoon flows.

Diversifying export markets is also critical to avoid geopolitical vulnerabilities, as past bilateral tensions have led to economic blockades. Bangladesh, facing severe energy shortages, presents a prime opportunity, with its master plan aiming to import up to 9,000 megawatts. Nepali hydropower is competitive, with initial exports to Bangladesh priced significantly lower than its imports from India. Proactive trilateral agreements involving Nepal, India, and Bangladesh are necessary to establish stable energy corridors, ultimately aiming for energy sovereignty within Nepal.