Hydropower Policy Review


Nepal holds immense potential for hydropower development with abundant water resources. The country can generate more hydropower to meet an ever increasing domestic demand and provide jobs to many unemployed by utilising hundreds of snow-fed rivers and rivulets in a sustainable manner. Our annual domestic power demand is increasing by around 18-20 per cent annually. The nation’s current power demand stands at about 1,400 MW. The government has to come up with a more effective hydropower policy to focus on power generation in order to meet the growing internal demand and increase power export. The country can help minimise the widening trade deficit with neighbouring India through enhancing power trade. It is needless to reiterate that the country imports the petroleum products and cooking gas worth billions of dollars from the southern neighbour annually. Such imports are going up every year with a remarkable increase in consumption of fossil fuels. This is not only contributing to further increasing our trade deficit with India but also giving rise to air pollution considerably. 

Nepal has come a long way in terms of hydropower development, with her installed capacity reaching more than 2,200 MW of clean energy. What is equally notable is that the country has also made a great stride in power export. Currently, the nation exports a total of 364 MW of electricity to India every day while it is planning to export an additional 111 MW in the near future. With several power plants coming into operation, about 700 MW power was added to the national grid in the last fiscal year. Extra 700-800 MW electricity is going to be generated in the current fiscal year as well. Despite this, the country is still not self-reliant in electricity. The nation imports a lot of electricity from India in winter. It will take some more years for Nepal to be self-sufficient in electricity. However, the country can export the power in the rainy season when the rivers remain swollen and the plants can generate power in their full capacity. 

Efforts are underway to begin selling power to Bangladesh as well.  As a potential buyer of Nepal’s electricity, Bangladesh has shown her keen interest in purchasing power. The two nations have lately reached an understanding to jointly develop the 683-MW Sunkoshi III. Bangladesh needs to use India’s transmission lines while importing power from Nepal. So, the two countries have decided to initiate the process of getting the Indian consent in this regard. GMR Group, an Indian company, that has undertaken the responsibility of developing the 900-MW Upper Karnali Hydropower Project, is also interested in selling some 500 MW of electricity to Bangladesh after it starts generating power. 

In her bid to be self-reliant in power, Nepal is encouraging households to utilise this clean energy as much as possible in order to help reduce trade imbalance and protect the environment. In view of the growing importance of increased power generation to the country, the Ministry of Energy, Water Resources and Irrigation is in the process of changing its power development policy arrangements, including survey and generation permits and guidelines, and electricity purchase and sales agreements. A report prepared by a committee led by Chiranjivi Chataut, Joint Secretary at the ministry, is going to be implemented for the maximum utilisation of water resources. In this regard, Minister for Energy, Water Resources and Irrigation Phampha Bhusal said that the power projects will be allowed to follow designs in a flexible way so as to generate maximum electricity. 

How did you feel after reading this news?