Hydropower in Nepal

If you were a landlocked, developing country without any fossil fuels, how would you handle your energy needs? What if I told you that you could harness the power of your rivers to not only provide you all the energy you would ever need, but also you could sell the excess energy to needy countries downstream from you? Well, if you are Nepal, this is exactly what you are trying to do, though there are a few headaches you have to deal with as well.

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Table of contents

    Potential of hydropower in Nepal

    Thanks to the mountain glaciers of the Himalayas, Nepal has enormous potential to generate energy from falling water, which is known as hydropower.

    Hydropower: a form of energy generation whereby the kinetic energy of a river or stream as it runs downhill is harnessed and turned into electricity.

    Some hydropower is associated with the storage of water in dams behind reservoirs, while other 'run of the river' projects don't use dams.

    Both ways employ turbines that the flowing water turns to generate power. The energy generated is either used locally or supplies an energy grid so it can be distributed across a wide area through transmission lines.

    This potential is due to Nepal's geography. This country twice the size of Ireland has the tallest mountains on earth all along its northern border. These mountains contain glaciers, a more-or-less permanent source of water for the foothills and Indo-Gangetic Plain to the south.

    Hydropower in Nepal, Himalayas nepal, StudySmarterFig. 1 - Snowmelt from the Himalayas supplies Nepal's rivers. Mt. Everest is pictured above

    Advantages of hydropower in Nepal

    Nepal has many hydropower advantages for itself and its neighbours. Nepal has no oil or natural gas to speak of, so the only way it can get fossil fuels is by buying them from other countries- an expensive proposition, indeed! Hydropower can be a huge advantage for Nepal's energy needs.

    Selling to India and China

    Nepal's hydropower can supply the massive energy needs of the downstream goliath, India, as well as northern neighbour China. These two countries have growing economies and not enough of their own energy, so electricity from a neighbouring country is a valuable option for them. Nepal's enormous hydroelectric potential means it can easily fulfil its own needs, and sell the excess to its neighbours.

    Flood control

    Another advantage Nepal has, particularly in the age of global warming, is flood control for its neighbours. Though the countries in the drainage basin of the Ganges River, by treaty, are not supposed to damage each other's water supplies, Nepal has a unique advantage. Reservoirs for hydroelectric projects can slow and catch the flow of rapidly melting Himalayan mountain glaciers, thus helping control the catastrophic floods that occur downstream.

    Hydropower in Nepal, Beni Kali Gandaki, StudySmarterFig. 2 - Beni, Nepal, on the banks of the Kali Gandaki River

    In addition to flood control for India and Bangladesh, the water that is retained in reservoirs can be released slowly, when it is needed, so there is a triple benefit: energy production, flood control, and supply of water downstream during the dry summer months.

    Problems of hydropower in Nepal

    As we mentioned above, there are some headaches associated with this whole scenario. Remember that hydro is clean and renewable energy and that it produces a huge amount of energy compared to the amount of energy that this needed to create it because it is simply harvesting water that is falling due to the force of gravity. By contrast, fossil fuels take enormous amounts of energy to harvest. Unlike fossil fuels, in hydro, nothing needs to be burned, so carbon dioxide is not being released into the atmosphere. How could there be any problems?

    It's expensive

    Constructing hydropower projects isn't cheap. In addition to the costs of the turbines, the dam (if there is one), all the infrastructure, and the connections to the electricity grid (towers, lines, transfer stations, etc.), there are also huge costs involved with relocating thousands or tens of thousands of people.

    It's dangerous

    Dam failures, particularly in earthquake zones like Nepal, can and do result in catastrophic loss of life from floods. The Himalayas are a dynamic and unstable natural system, and even normal annual floods can place great strains on human-created infrastructure. Extreme floods, which are going to occur more often because of climate change, may be too powerful for even the strongest hydros to withstand.

    It destroys human livelihoods

    This is perhaps the most serious accusation against hydros- at least the large kind- worldwide. From Brazil to the US to China, large hydros have a history of removing people, often by force, for an area to be flooded. In Latin America, hydro projects are typically met with fierce resistance as people are afraid they will not be reimbursed by the government, or they have nowhere to go. In China, millions were removed, including entire cities, to make way for the Three Gorges Dam.

    The environment loses

    Riparian habitat- habitat along streams and rivers- is some of the richest in terms of plants and animals and it is the biggest loser when a hydro comes along. Even when surrounding areas might end up being protected after people are moved out, the riparian areas are lost forever.

    It's not sustainable

    Hydros are not built to last. Every hydro has a certain lifespan, determined by how fast sediment fills in reservoirs and destroys turbines. With all the risk factors listed above, and the looming threat of the disappearance of the Himalayan glaciers from climate change, the time for constructing big hydros that might last no longer than 50 years may already be past.

    Future of hydropower in Nepal

    There are three ways of looking at the future of Nepal's hydropower.

    A positive future

    According to the Asian Development Bank,1 Nepal has about 42 gigawatts of hydropower potential that it can actually harness, out of 89 total. Of that 42, at present, the country only harnesses 1.2 gigawatts.

    • Nepal could become energy self-sufficient and sell excess energy to neighbouring countries.
    • Nepal could protect itself from rising fossil fuel costs and be well-positioned for a post-carbon future. Think of all the fossil fuel emissions that would be avoided!
    • Using hydros to generate electricity could actually help the environment because, at present, the main source of energy for the predominantly rural country is firewood for cooking stoves and other household needs. While most villages now have some sort of electricity, it is far from sufficient for their needs, so the unsustainable cutting of steep mountain slopes for wood continues. This causes erosion and even landslides.
    • A modern electric grid supplied by hydro could help Nepal do what other countries have done- transition to electric cooking stoves and electric lights in every home.
    • Human health and labour are benefitted, because the smoke from cooking fires is enormously damaging to the eyes and lungs, and collecting firewood is a lot of hard work which could better be focused elsewhere.

    A negative future

    We have already touched on the negatives of hydropower above:

    • habitat loss
    • displacement of people
    • threat of dam failure
    • unsustainability

    The big picture, according to those who see big hydros as a mirage for Nepal, also includes the debt that the country would have to take on to be able to afford to build these projects. They don't come for free! Would a country with a recent history of unstable governments and even civil war be the best place in which to invest the hundreds of millions of pounds (equivalent) it would take to build all this?

    Nepal is still one of the least developed countries on Earth, so would hydro really lift its people out of poverty quickly enough for them to be able to afford to buy all the electrical appliances needed for their homes and workplaces?

    Hydropower in Nepal, Damage from earthquake, StudySmarterFig. 3 - damage from the 2015 earthquake in Nepal

    Perhaps the most serious charge against hydro as the answer for Nepal's future is the nearly inevitable loss of the Himalayan mountain glaciers due to climate change.

    Is investing so much in hydro really the best way to prepare for a future where the main source of water is going to disappear?

    Fortunately, there are alternatives.

    An alternative future

    Big projects of any kind, when situated in countries that can't afford them, are often doomed to fail, but for a country like Nepal, small is beautiful, as the saying goes. Nepal's alternative energy future, as envisioned by the Alternative Energy Promotion Centre (AEPC), a Nepal government agency, is based on many small energy projects.

    Hydropower in Nepal under construction

    According to 2020 figures published by the Asian Development Bank,1 the Nepal government has granted over 300 licences for new hydro projects generating almost 16 gigawatts of energy. Of these, 172 projects have been fully approved and are in some stage of construction, with over 4.6 gigawatts of new energy on the horizon.

    And now for the biggest headache of all: the mysterious case of the Budhi Gandaki project.2 This Himalayan 'mega-dam,' by far Nepal's largest, is projected to generate 1.2 gigawatts of power, thanks to a 45-kilometre-long reservoir and one of the highest dams on Earth. Some 50,000 people will have to be relocated. The problem? A Chinese company was granted a licence to build the dam in 2018, and it was slated to be completed by 2022, doubling the energy-generating capacity of the entire country of Nepal. Nothing happened.

    In April 2022, Nepal's government scrapped the licence and announced it would build the project on its own.3

    Importance of micro hydropower in Nepal

    For sake of comparison, a gigawatt is 1,000 megawatts. Anything above 1 megawatt is a typical big hydro project, but when you go below 1 megawatt, you get into the world of 'mini hydros' (100 kilowatts and above) and 'micro hydros' (10 Kw to 100 Kw). Micro hydros are seen by many to be the answer to Nepal's energy current energy needs, as they can be funded, built, and sustained at the level of villages and towns. They do not cost much, and usually use run-of-the-river and so do not involve destroying or flooding out habitats and homes. Even if they need small dams and reservoirs, these are on a manageable scale for communities.

    Micro hydros use local water and because they generate electricity, problems like those associated with cooking fuel, discussed above, can be eliminated. Local forests are protected as fuelwood needs disappear, and villagers see the necessity of protecting and regenerating forests to increase the quality of their local watersheds.

    Because they are not connected to an unstable national grid, micro hydros provide a stable and permanent source of energy for even the most remote communities. The government of Nepal and various foreign aid groups are currently working to make Nepal's energy future sustainable, and micro hydros are a big part of that equation. But they are not the only part.

    Solar energy potential in Nepal

    Nepal is a tropical country that receives a lot of sunlight. Solar cooking, drying, and water heating can be done using cheap and efficient technologies tested and proven all over the world. These systems are for individual households, replacing the need for firewood, which currently supplies over 85% of local energy needs and engages women and children in many hours of daily labor. Being able to easily heat water is also a health benefit, because water-borne diseases are eliminated when water used for drinking is first boiled.

    Small systems that use sunlight directly, combined with slightly more complex systems that store solar energy in photovoltaic cells (solar panels), are thus a sustainable alternative for Nepal.

    Wind energy potential in Nepal

    According to the AEPC, Nepal's mountainous geography provides many opportunities for harvesting energy from wind. Overall, it is estimated that Nepal has around 3 gigawatts of wind power potential, though this is virtually untapped.

    The Asian Development Bank has begun a few moderate-sized projects, but as with the solar examples above, the real future for wind as a sustainable power source in Nepal is at the village level. The AEPC promotes wind-solar hybrid energy systems because if both power sources are combined when one is lacking (the sun isn't shining or the wind isn't blowing), the other can pick up the slack.4

    Hydropower in Nepal - Key takeaways

    • Nepal has over 40 gigawatts of hydroelectric potential, and around 10% of this is currently in the process of being turned into actual energy-generating projects.
    • Nepal can reduce its dependence on fossil fuels and its carbon footprint by transitioning to hydropower to supply its own electricity and sell to neighbouring countries, while also helping those countries reduce risks from floods and drought.
    • Big hydro projects are not sustainable and present many risks: they displace people and flood out plants and animals, are very expensive, can fail and cause catastrophic floods, and may not be feasible in the age of global warming.
    • Micro hydro projects are feasible and sustainable for villages, helping people get away from firewood dependence and generate their own energy without having to rely on an unstable national grid
    • Small solar, wind, and hybrid solar-wind energy projects are also feasible for Nepal's rural population.


    1. Gunatilake, H., P. Wijayatunga, and D. Roland-Holst. ‘Hydropower development and economic growth in Nepal.' Asian Development Bank. 2020.
    2. Bhushal, Ramesh. 'Budhi Gandaki: Nepal’s mega-dam remains a mirage.' thethirdpole.net. 2021.
    3. Lamsal, Himal. 'Chinese company's license to build Budhi Gandaki Project scrapped, Nepal says it’ll build the 1200MW project on its own.' myrepublica.nagariknetwork.com. 2022.
    4. aepc.gov.np
    Frequently Asked Questions about Hydropower in Nepal

    What is hydropower?

    Hydropower is energy generated by water flowing downhill. Water in rivers flows through turbines that convert its energy into electricity which can be used locally or distributed through an energy grid to distant locations. When river water flows directly into turbines, this is called ‘run of the river’; otherwise, hydro plants store water in reservoirs behind dams.

    Why is hydropower important in Nepal?

    Nepal does not have fossil fuels, so it has to import energy from other countries. Nepal has huge hydropower potential which it can harness to supply its own energy needs as well as sell to neighboring countries.

    What issues does Nepal face regarding hydropower?

    Hydropower is expensive, dangerous, harmful for people and the environment, and unsustainable.

    How is solar energy used in Nepal?

    Solar energy is used in rural homes for cooking, drying, and heating water.

    Is wind energy possible in Nepal?

    Yes, wind energy is possible in Nepal. In fact, over 3 gigawatts of wind energy could be harnessed in the country. Hybrid wind-solar energy generation in villages is one sustainable alternative.

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