Constant supplyNepal’s economic growth potential is undoubtedly hampered by its reliance on fossil fuel imports and its landlockedness, both of which raise costs of production. Still, if there is one thing that keeps Nepalis eternally optimistic about the country’s future is its supposedly massive hydro-power potential.
Nepal’s economic growth potential is undoubtedly hampered by its reliance on fossil fuel imports and its landlockedness, both of which raise costs of production. Still, if there is one thing that keeps Nepalis eternally optimistic about the country’s future is its supposedly massive hydro-power potential. Indeed, with the number and amount of fresh water channels passing through the country as they flow from the steep Himalayan north to the sea-level south, we are reminding ourselves of energy security: When fossil fuels are phased out of production and Nepal finally realises its reported 45,000 MW potential. Yet, Nepal’s current electricity production and transmission contradicts everything we have ever read about the country’s generational capacity.
The country’s peak electricity demand stands at around 1,380 MW. Owing to the much touted potential, this is a paltry amount that should easily have been managed by now. However, Nepal’s currently installed hydro-power generation capacity is only near 1000 MW. This means that, even if Nepal’s current hydro-power projects were operating at maximum capacity throughout the year, our electricity needs would still be unfulfilled. What’s worse is that since most hydro-power projects in Nepal are run-of-the-river type (they produce power depending on the flow of water), energy production dips significantly during the dry months when most river-flows taper. This past winter, production dropped to a meagre 581 MW, from 956 MW during last monsoon.
This situation necessitates the purchase of electricity from India during the dry months. And while our southern neighbour has been very good at supplying Nepal with the required amount of electricity, such a set-up is unsustainable. While the Modi government in India has been waving flags of friendship, the shadow of the 2015 economic blockade looms in the background to remind Nepalis for the need for a diverse market or sustained self-production. Moreover, with the country’s trade deficit with India increasing and energy being a high-demand, tradable commodity, there is no reason for Nepal not to tap into its massive economically viable energy resource.
Ultimately, Nepal’s energy woes will only be solved by building large hydro-power projects that can sustain supply throughout the year. Reservoir type hydro-power projects do just that. Unlike run-of-the-river type projects, such hydro-power projects store water behind dams so that it can be used to produce electricity at equal capacity year-round. And despite concerns about resettlement of communities and submergence of land that are associated with reservoir based projects, there is no doubt that such projects produce energy much cleaner than nuclear or fossil fuel based generators.
So far, successful implementation of such large projects has been poor due to factors such as political instability and red tape. The Oli government has an opportunity here to push through viable large-scale reservoir projects that previous governments had not been able to. To do so, it needs to clear out the red tape with guidelines that incentivise energy investment and production but penalise unsatisfactory construction. With the support of our neighbours, it has a chance to create a regional market for surplus energy. By facilitating the building of large-scale hydro-power projects, the government can help fulfil the sustainable development goal of ensuring access to affordable, reliable, sustainable and modern energy for all.