On September 30, 2020, the Nepal Electricity Authority (NEA) recorded a wastage of up to 5 million units of electricity, largely attributed to low domestic energy demand and problems within the electricity distribution system. The issue recurred in September 2023, with 30 hydropower plants wasting 500 MW of the electricity they produced. Currently, Nepal is said to be wasting more than 700 MW of electricity produced during peak season.

Beyond the Dark Age: From Shortage to Surplus

The high hydropower potential of the Himalayan country, which once faced a massive shortage of power supply, resulting in power outages of up to 18 hours a day, has now been struggling with a massive loss of produced electricity for the past few years. Despite aspirations to maximize electricity production, Nepal has been grappling with the challenge of properly utilizing its surplus energy. Aside from some efforts to strengthen transmission lines and a few exports to India, no significant measures have been implemented to address this ongoing problem.

From 2008 to 2016, Nepal, despite its potential to generate 42,000 MW of electricity, was in a 'dark age' due to severe power shortages. Nepalese faced power outages lasting up to 18 hours daily. The World Bank estimated the total economic impact of the energy crisis to be around seven percent of the gross domestic product (GDP), amounting to US $11 billion during that period. After overcoming massive power outages in 2018, the country was expected to achieve larger economic benefits through high economic growth via industrialization and the expansion of the commercial sector. However, the reality has been far from expectations.

Current Power Surplus Problem

Nepal's electricity production capacity has reached 3,157 MW, with an additional 2,300 MW generated in the past eight years. However, the country’s peak electricity demand is only 2,650 MW.

According to the NEA, energy consumption has tripled in the past few years following the end of power cuts and the resumption of regular electricity supply. Eight years ago, per capita energy consumption was 131 units, which has now increased to 400 units.

The total length of transmission lines has reached 6,507 circuit kilometers, more than double the length from eight years ago. However, the availability of high-capacity transmission lines is still limited, with only 1,213 circuit kilometers of 220 kV lines and 644 circuit kilometers of 400 kV lines. While 220 kV single circuits can carry 300-400 MW, a transmission line with a capacity of 400 kV or more can carry over 1,200 MW of electricity from a single circuit. Thus, 400 kV transmission lines are crucial for Nepal to fully benefit from electricity exports.

Similarly, the capacity of grid substations has reached 13,050 MVA, almost six times the capacity over the same period. Despite this development, the infrastructure is still inadequate to support the distribution of the year-on-year increase in electricity production.

According to a government report, at least 10 percent of the population in rural districts such as Bajhang, Dolpa, Bajura, Jumla, and Mugu still lacks access to electricity. Additionally, 70 percent of industries still rely on expensive diesel-powered generators to operate their production plants.

New Projects, New Hope

The Department of Electricity Development has issued licenses to projects with a cumulative capacity of 9,000 MW. Additionally, other projects with a total capacity of 11,000 MW have applied for operating licenses.

Among the large projects (with capacities over 100 MW), the Rasuwagadhi Hydropower Project has completed its test production and will begin commercial production in the next few months, producing 111 MW of electricity. Similarly, the 102 MW Mid Bhotekoshi Hydropower Project, delayed for various reasons, has announced it will start production in October this year.

By Rajesh Khanal