Nepal has a huge hydropower potential. In fact, the perennial nature of Nepali rivers and the steep gradient of the country’s topography provide ideal conditions for the development of some of the world’s largest hydroelectric projects in Nepal. Current estimates are that Nepal has approximately 40,000 MW of economically feasible hydropower potential. However, the present situation is that Nepal has developed only approximately 600 MW of hydropower. Therefore, bulk of the economically feasible generation has not been realized yet. Besides, the multipurpose, secondary and tertiary benefits have not been realized from the development of its rivers.
Although bestowed with tremendous hydropower resources, only about 40% of Nepal’s population has access to electricity. Most of the power plants in Nepal are run-of-river type with energy available in excess of the in-country demand during the monsoon season and deficit during the dry season.
Nepal’s electricity generation is dominated by hydropower, though in the entire scenario of energy use of the country, the electricity is a tiny fraction, only 1% energy need is fulfilled by electricity. The bulk of the energy need is dominated by fuel wood (68%), agricultural waste (15%), animal dung (8%) and imported fossil fuel (8%). The other fact is that only about 40% of Nepal’s population has access to electricity. With this scenario and having immense potential of hydropower development, it is important for Nepal to increase its energy dependency on electricity with hydropower development. This contributes to deforestation, soil erosion and depletion, and increased flooding downstream in the Ganges plain. Shortage of wood also pushes farmers to burn animal dung, which is needed for agriculture. Not only this, the development of hydropower will help to achieve the millennium development goals with protecting environment, increasing literacy, improving health of children and women with better energy. Growing environmental degradation adds a sense of urgency.
Energy Consumption in Nepal
The electricity demand in Nepal is increasing by about 7-9% per year. About 40 % of population in Nepal has access to electricity through the grid and off grid system. Nepal’s Tenth Five Year Plan (2002– 2007) aims to extend the electrification within country and export to India for mutual benefit. The new Hydropower Policy 2001 seeks to promote private sector investment in the sector of hydropower development and aims to expand the electrification within the country and export.
The hydropower system in Nepal is dominated by run-of-river Projects. There is only one seasonal storage project in the system. There is shortage of power during winter and spill during wet season. The load factor is quite low as the majority of the consumption is dominated by household use. This imbalance has clearly shown the need for storage projects, and hence, cooperation between the two neighboring countries is essential for the best use of the hydro resource for mutual benefit.
The system loss is one of the major issues to be addressed to improve the power system which accounts to be 25 % including technical and non-technical losses like pilferage.
Status of Power Generation and Transmission
Nepal has 600 MW of installed capacity in its Integrated Nepal Power System (INPS). The power system is dominated by the hydropower which contributes about 90 % of the system and the balance is met by multi fuel plant. The hydropower development in Nepal began with the development of 500 kW Pharping power plant in 1911. The most recent significant power plant commissioned is the 144-MW Kali Gandaki “A” Hydroelectric Plant.
Until 1990, hydropower development was under the domain of government utility, Nepal Electricity Authority (NEA) only. However, with the enactment of new Hydropower Development Policy 1992, the sector was opened to the private sector also. There are number of projects already built by the private developers. Private power producers contribute 148 MW of power to the ‘Integrated Nepal Power System’.