Harnessing Nepal’s indigenous energy sources

Electrification must be promoted across all economic sectors to reduce reliance on imported fuels.

A country’s population and economic conditions fundamentally shape its electricity demand; the chosen development path, whether a low-carbon or high-growth, significantly influences consumption patterns. Nepal faced a substantial electricity deficit in 2015, with an actual installed capacity requirement of 1,721 megawatts (MW), while the available installed capacity was a mere 800 MW, resulting in load shedding. As per the Government of Nepal Electricity Demand Forecast Report (2015-40) , even if Nepal maintains its historical GDP growth rate of 4.5 percent, it will require an installed capacity of approximately 15,000 MW to meet its growing demand by 2030. Demand is expected to surge to 82,000 gigawatt hours (GWh) by 2040, necessitating an installed capacity of over 35,000 MW. With similar policy interventions alongside a GDP growth rate of 9.2 percent, the installed capacity requirement is projected to reach 18,000 MW by 2025 and exceed 50,000 MW by 2040. As of March 2023, the total installed capacity, including generation from Nepal Electricity Authority, alternative energy promotion centre and independent power producing companies, is 2,577 MW of electricity.