Hydropower Development

Category

Energy & Hydropower

Key Facts

Nepal's Hydropower Potential

Blessed with a vast river system originating in the Himalayas, Nepal possesses immense water resources with the potential to transform its economy through clean energy production and regional power export.

Capacity and Potential

Theoretical Hydropower Potential: Approximately $83,000\text{ MW}$
Economically and Technically Feasible Potential: Approximately $42,000\text{ MW}$
Installed Generation Capacity: Crossed $3,000\text{ MW}$ as of mid-2024, showing rapid growth compared to less than $1,000\text{ MW}$ a decade ago.
Generation Mix: Over $95%$ of Nepal's electricity is generated from eco-friendly run-of-the-river (RoR) hydropower plants, leading to seasonal imbalances (surplus in monsoon, deficit in winter).

Key Hydropower Projects

Project Name	Capacity	Type	Status / Remarks
Upper Tamakoshi	$456\text{ MW}$	Peaking RoR	Operational; largest completed domestic project, developed using national resources.
Kaligandaki A	$144\text{ MW}$	Peaking RoR	Operational; key baseload plant in central Nepal.
Middle Marsyangdi	$72\text{ MW}$	RoR	Operational.
Arun III	$900\text{ MW}$	Peaking RoR	Under construction; being developed by India's SJVN under a BOOT model.
Budhigandaki	$1,200\text{ MW}$	Storage	Proposed reservoir project; critical for addressing winter dry-season deficits.

Power Trade and Bilateral Agreements

Power Trade Agreement (PTA) with India (2014): Established the framework for bilateral electricity trading and grid synchronization.
Ten-Year Power Export Target: In early 2024, Nepal and India signed a bilateral agreement targeting the export of $10,000\text{ MW}$ of electricity from Nepal to India over the next decade.
Trilateral Power Trade: Initial agreements have been reached to export power to Bangladesh via the Indian transmission grid.

Structural and Environmental Challenges

Hydrological Seasonality: Dry season (winter) river discharge drops to roughly $20% - 30%$ of peak summer flow, forcing Nepal to import electricity from India during winters despite summer surpluses.
Transmission Infrastructure: Inadequate high-voltage transmission lines (such as cross-border and domestic transmission corridors) limit evacuation capacity.
Geological and Climate Vulnerability: High risk of landslides, earthquakes, and Glacial Lake Outburst Floods (GLOFs) damaging infrastructure.