Nepalese electricity sector scenario

Nepal's electricity sector in this decade is moving from chronic shortage (load shedding until 2016/17) to surplus in the wet season and export, with hydropower as the backbone. The figures below are approximate, as per recent NEA annual reports and the Ministry of Energy, Water Resources and Irrigation (MoEWRI).

Generation

• Installed capacity has grown from about 1,100 MW (2017) to well over 3,000 MW in recent years, and keeps rising every year.
• Hydropower gives about 95% of the capacity; most of it is run-of-river (ROR/PROR). Solar is growing (a few hundred MW), and there is a little thermal (diesel) kept as standby.
• Independent Power Producers (IPPs) now own more capacity than NEA itself. Big recent projects include Upper Tamakoshi (456 MW), Kulekhani III, Rasuwagadhi, Solu Dudhkoshi, Upper Trishuli 3A and many IPP plants.

Demand and consumption

• Peak demand has crossed about 2,000 MW, and per-capita consumption is around 400 kWh/year (still low compared to South Asia).
• About 99% of households have access to electricity.
• The government promotes electric cooking (induction stoves), electric vehicles and industrial use to absorb the surplus.

Seasonal mismatch

• Because most plants are ROR, Nepal has surplus in the wet season (Jun–Oct) and deficit in the dry season (Dec–Apr), when power is imported from India.
• Storage projects (e.g. Tanahu 140 MW, Budhigandaki, Dudhkoshi storage) are planned to fix this.

Cross-border trade

• Since 2021 Nepal exports power to India through the Indian Energy Exchange and bilateral deals, and exports to Bangladesh through the Indian grid started in 2024.
• Nepal and India signed a long-term agreement (2024) targeting export of 10,000 MW within ten years.

Transmission and policy

• The 400 kV backbone (Dhalkebar–Muzaffarpur, Hetauda–Dhalkebar–Inaruwa, Butwal–Gorakhpur under construction) is being built to evacuate and export power.
• The Energy Development Roadmap and Action Plan (2080 BS) targets about 28,500 MW by 2035, with about 15,000 MW for export.

Challenges

Transmission delays, spill of energy in the wet season, low domestic demand, high PPA cost, dry-season import dependence, and climate risks (floods, GLOFs, sediment).