In the 21st century, geopolitics is no longer defined solely by territorial disputes or conventional power struggles. Instead, the race for dominance revolves around three critical arenas: access to critical minerals and semiconductors, the development of computational capacities, and the ability to meet the soaring global demand for energy and storage.

While much of the spotlight is on nations with cutting-edge technology or vast mineral reserves, Nepal—a country often associated with its mountainous terrain and hydropower potential—has an opportunity to redefine its role in this global contest.

According to a study by the International Centre for Integrated Mountain Development (ICIMOD), Nepal’s theoretical hydropower potential is estimated at 83,000 MW, with around 42,000 MW being economically feasible. This positions Nepal as a key player in addressing the region's growing energy demands while aligning with global sustainability goals.

The global energy race has evolved. It is no longer just about generating power—solar panels and wind turbines have made renewable energy abundant. The real challenge lies in storing and utilising this energy efficiently. According to a report by the International Renewable Energy Agency (IRENA), global electricity storage capacity needs to grow at least 40-fold by 2050 to support the energy transition, underscoring the critical need for innovative storage solutions like hydropower reservoirs and pumped storage systems.

Nepal, with its immense hydropower potential, sits at a unique crossroads, capable of providing not just clean energy but also energy storage solutions akin to battery farms or photovoltaic cells. At the same time, Nepal’s geographic position and renewable resources offer an unprecedented opportunity to power the computational future—turning energy into data at the source.

Critical minerals and semiconductors: The foundation of the race

As the discussion on energy and geopolitics evolves, the foundational role of critical minerals and semiconductors comes into sharp focus. These essential materials underpin the transition to cleaner energy and advanced computational technologies.

The global scramble for critical minerals such as lithium, cobalt, and rare earth elements has become one of the defining features of modern geopolitics. These materials are the lifeblood of semiconductors, batteries, renewable energy technologies, and advanced defense systems. Critical minerals are essential for creating computational hardware, enabling high-performance computing, and powering defense technologies like guided missile systems, drones, and radar equipment.

Securing these resources is not just about ownership but ensuring a fluid and uninterrupted supply chain. For instance, if electric vehicles powered by lithium-ion batteries are analogous to gasoline or diesel engines, then lithium and cobalt must be as ubiquitous and efficiently supplied as fossil fuels for this transition to succeed.

China’s strategic investments in Africa exemplify this approach. Through initiatives such as the Belt and Road Initiative (BRI), China has established deep ties with African nations rich in critical minerals. Countries like the Democratic Republic of Congo (DRC), which produces over 70 percent of the world’s cobalt, are central to these efforts.

China has invested heavily in mining infrastructure, securing access to essential resources while creating streamlined logistics networks to transport raw materials to its manufacturing hubs. This comprehensive strategy ensures a steady flow of critical minerals needed for producing batteries and semiconductors, underscoring the importance of a resilient supply chain in dominating future industries.

However, African nations have grown increasingly vocal about wanting more than just resource extraction. Having learned hard lessons from a colonial past marked by exploitation, they now seek value addition within their borders. Many African countries aim to develop industries that can manufacture finished products.

The United States is also actively vying for influence in Africa to secure access to critical minerals. Through initiatives such as the Minerals Security Partnership (MSP) and investments via the US International Development Finance Corporation, America seeks to counterbalance China’s dominance by fostering partnerships with African nations.

The semiconductor industry further illustrates this dynamic. These critical components, essential for everything from smartphones to AI systems, rely on rare earth elements that are concentrated in a few regions globally. The ongoing semiconductor shortages highlight the fragility of supply chains and the geopolitical manoeuvres required to secure them. Countries and corporations are not just competing for access but also striving to localise production capabilities, reducing dependency on external supply chains.

While Nepal does not possess critical minerals like lithium or cobalt, its strategic importance lies downstream in the energy supply chain. With abundant hydropower resources, Nepal can play a crucial role in powering the industries that rely on these minerals, such as battery production, electric vehicles, and semiconductors.

By positioning itself as a stable clean energy provider, Nepal can play a crucial role in supporting the global shift toward sustainable technologies. This strategic role enables Nepal to complement mineral-rich nations in supporting the global shift.

Computational capacities: Energy-intensive growth

Building on the critical minerals discussion, the demand for computational power adds another layer to the global energy race. Computational capacities are the engines driving modern technologies, making their development an energy-intensive priority.

Computational power refers to the capacity of systems to process data and execute complex calculations. Our world has been dematerialised in recent decades. We no longer rely on physical cassettes to listen to music; instead, we stream it. Movies, once stored on DVDs, are now available on demand through online platforms. Behind these seamless experiences lie vast server networks that store, process, and deliver this content to billions. Every song streamed, movie watched, or document accessed contributes to the growing computational demands placed on these servers.

As Vaclav Smil discusses in his book ‘Numbers Don’t Lie’, specifically in the chapter ‘The Rise of Data’, data storage has undergone a monumental transformation over millennia. In ancient Mesopotamia, data storage was limited to clay tablets, holding only a few hundred bytes of information. By the 5th century, libraries and manuscripts increased this to approximately 10^5 bytes. However, the Gutenberg printing press in the 15th century marked a seismic shift, enabling data storage and dissemination to expand exponentially. This transition laid the foundation for the modern information age.

Today, global data creation is projected to reach 175 zettabytes by 2025, up from 33 zettabytes in 2018. This explosion of data has placed unprecedented demands on computational infrastructures and energy systems alike, requiring significant advancements in computational power and sustainability.

The rise of electric vehicles (EVs) is another significant factor reshaping computational demand. The transition from internal combustion engines (ICEs) to EVs mirrors the shift from feature phones to smartphones. Modern EVs are equipped with advanced software, autonomous driving capabilities, and connected features, all of which demand immense computational power. These vehicles function as mobility platforms, requiring processing power comparable to large language models for real-time decision-making and navigation. This technological evolution intensifies the need for data centres and efficient energy sources.

China continues to lead the global race in EV adoption and infrastructure development, with companies like BYD and NIO at the forefront, integrating advanced AI-driven features into their vehicles. According to McKinsey & Company, a single connected car can generate as much as 25 gigabytes of data per hour, far surpassing the output of traditional personal devices like smartphones or social media platforms.

To put this into perspective, Tesla’s fleet produces around 82 petabytes of data globally each day, dwarfing the four petabytes processed daily by Facebook. This highlights the extraordinary data processing and energy requirements of modern mobility platforms, especially as autonomous and electric vehicles evolve into computational systems akin to large language models. Acknowledging these trends, China is not only accelerating its EV production but also investing in robust energy and data infrastructures to maintain its competitive edge.

Meanwhile, the rapid expansion of artificial intelligence (AI) models in Silicon Valley has created similarly massive energy demands, prompting tech giants to explore nuclear energy as a reliable and scalable alternative. Investing in advanced nuclear technology, such as small modular reactors (SMRs), to power their energy-intensive data centres. This shift could gain significant traction under a Trump administration, where deregulation policies favouring streamlined energy production align with the tech industry’s drive for rapid innovation.

Energy as storage: Nepal’s strategic advantage

Linking the themes of computational demand and energy supply, the conversation naturally turns to the challenge of energy storage. This is where Nepal’s hydropower potential offers a distinctive advantage.

The global energy race is not about supply—solar and wind energy are abundant. Instead, the competition lies in how efficiently energy can be stored and utilised. Fossil fuels, for example, have historically been the dominant energy storage medium due to their high energy density. Gasoline and diesel store approximately 12-14 kWh of energy per kilogram, making them extremely efficient for transport and industrial applications.

By contrast, lithium-ion batteries, often used for renewable energy storage, have an energy density of about 0.25 kWh per kilogram. While batteries are suitable for short-term energy storage, they are far less energy-dense than fossil fuels and require significant resources such as lithium and cobalt, creating challenges in terms of scalability and sustainability. Photovoltaic cells (solar panels), while efficient at capturing sunlight, do not inherently store energy and must rely on batteries or other storage systems, adding further complexity.

Unlike battery-based systems or fossil fuels, hydropower can provide stable and consistent output over long periods. Its scalability makes it particularly suitable for energy-intensive industries like big data processing. Research indicates that Nepal’s hydropower systems are predominantly rain-fed rather than glacial-fed, making them less susceptible to the impacts of climate change.

This sets Nepal apart from countries like Pakistan, where hydropower relies heavily on glacial-fed rivers that are at risk of depletion due to global warming. The reliability and sustainability of rain-fed hydropower provide a long-term solution for clean energy storage and utilisation.

Energy-to-data transition: A vision for Nepal

Expanding from the storage conversation, the next logical step is to explore how Nepal can transform its energy surplus into a digital export commodity through the energy-to-data transition.

The next step in Nepal’s energy journey is transformative: the direct conversion of energy into data. By establishing data centres within its borders, Nepal can bypass the need for extensive transmission lines to export energy. While it may not be feasible to export energy far and wide, such as to Silicon Valley, to power the servers of companies like Google or Facebook, Nepal can host these servers locally.

The hydropower-generated electricity can be directly converted into data, which can then be transmitted globally via existing optical fiber cables or satellite links. This analogy highlights Nepal’s potential to turn energy into a globally exportable commodity in the form of data. Instead, hydropower-generated electricity can power servers and computational infrastructure locally, transforming raw energy into digital outputs that are exported via optical fibre or satellite.

This energy-to-data transition offers multiple advantages:

• Cost efficiency: Eliminates the need for costly and resource-intensive energy transmission infrastructure.

• Value addition: Converts energy into higher-value computational outputs, such as processed data or AI models.

• Environmental impact: Reduces transmission losses and reliance on carbon-heavy technologies.

Nepal’s geographic proximity to India and China—two of the world’s largest data markets—further enhances its potential as a regional data hub. By hosting data centres powered by clean energy, Nepal can attract international tech giants and position itself at the forefront of the digital economy.

Nepal must also account for its unique challenges. Situated in a seismic zone, the country requires thorough geographical and environmental assessments before establishing large-scale data centres or energy infrastructure.

Regional and global geopolitics: Nepal’s role

Tying together the discussions on critical minerals, computational capacities, and energy storage, Nepal’s strategic importance in the regional and global geopolitical landscape becomes clear.

Nepal’s energy potential has significant geopolitical implications. With growing energy demand in neighbouring countries, Nepal can leverage its hydropower resources for regional energy diplomacy. Agreements to supply clean energy to India, China, and potentially other South Asian nations could strengthen economic and political ties.

India and China, two of the world's largest economies, are also among the biggest consumers of energy for computational purposes. India’s demand for energy is projected to rise significantly, driven by its expanding IT sector and the push for large-scale digital initiatives such as Digital India. Data centres in India consumed approximately 5.4 terawatt-hours (TWh) in 2021, a figure expected to triple by 2030. Similarly, China, already home to some of the largest data centres globally, consumed over 161 TWh of electricity for its data industry in 2021, accounting for nearly two percent of its total electricity demand.

These figures underscore a vast opportunity for Nepal to position itself as a key supplier of renewable energy for computational industries. By aligning its energy strategy with the growing computational needs of its neighbours, Nepal can foster regional integration and ensure mutual economic benefits.

Moreover, by focusing on data centre development, Nepal can tap into the global push for green data solutions. Countries and corporations are increasingly seeking data centres powered by renewable energy to meet sustainability goals. Nepal’s clean energy and strategic location make it an ideal partner for such initiatives.

Challenges and pathways

While the vision is ambitious, realising it requires addressing several challenges:

• Infrastructure gaps: Nepal needs to invest in modernising its hydropower plants, developing high-speed internet connectivity, and building satellite communication systems.

• Policy development: Clear and investor-friendly policies are essential to attract foreign direct investment in energy and computational infrastructure.

• Regional cooperation: Cross-border energy-sharing agreements and digital partnerships will be critical for scaling Nepal’s role.

• Environmental sustainability: Hydropower projects must balance development with ecological preservation to ensure long-term viability.

Conclusion: Nepal’s opportunity in the global transition

Nepal stands at a pivotal moment in history. By harnessing its hydropower resources, it can play a dual role: as a key supplier of sustainable energy and as a regional hub for computational capacities. The global race for energy and technology is as much about innovation as it is about strategic positioning.

Nepal’s unique combination of renewable energy potential, geographic location, and vision for energy-to-data transition offers it a path to not just participate in this race but to lead it.