Er.energyNP@Gmail.com

Energy experts and stakeholders have stressed that Nepal’s energy sector should move beyond electricity generation and be integrated with modern technologies, domestic electricity consumption, industrialization, and the green economy.

Speaking at a discussion program titled “Effective Implementation of Nepal’s Energy Strategy for Domestic Energy Security and Industrialization,” organized on the occasion of the 64th Engineers’ Day, participants said that Nepal’s long-term energy security depends not only on electricity exports but also on expanding productive domestic electricity use.

Modern technologies key to a reliable power system

Nepal Electricity Authority (NEA) Managing Director Dirghayu Kumar Shrestha said the utility is prioritizing modernization, efficiency, and customer-centric services to strengthen the country’s power sector.

According to him, the NEA is pursuing an integrated strategy that combines data centers, green hydrogen, pumped-storage hydropower, battery energy storage systems, and solar energy to balance surplus monsoon electricity with winter demand.

He added that the authority aims to make Nepal’s electricity system safer, more reliable, and more efficient through the deployment of smart grids, SCADA (Supervisory Control and Data Acquisition), smart meters, and grid automation.

Shrestha emphasized that genuine energy security cannot rely solely on utilizing excess monsoon electricity. Instead, Nepal must develop generation, transmission, and distribution infrastructure in an integrated manner so that domestic production can also meet winter demand. He also called for timely resolution of land acquisition and forest clearance issues that continue to delay transmission line projects.

Roadmap 2035 targets

Under the government’s Roadmap 2035, Nepal aims to generate 28,500 MW of electricity, build more than 17,000 kilometers of transmission lines, and expand substation capacity to over 40,000 MVA by 2035.

The expansion of cross-border 400 kV transmission lines, including the Dhalkebar–Muzaffarpur and New Butwal–Gorakhpur interconnections, is expected to facilitate greater electricity imports and exports.

Domestic demand must grow

NEA Electricity Trading Department Chief Tharka Bahadur Thapa said that although Nepal targets 28,500 MW of installed capacity by 2035, around 13,500 MW is planned for domestic consumption.

He noted that Nepal’s current average electricity demand is only about 2,200 MW, but various studies indicate that domestic demand could increase to 7,000–8,000 MW.

Thapa said reducing electricity tariffs alone would not significantly boost consumption, as electricity use is closely linked to overall economic activity and gross domestic product (GDP). He stressed that investment in transmission and distribution infrastructure must accompany increased power generation.

He further noted that nearly 70 percent of Nepal’s future electricity demand is projected to be concentrated in 11 major cities, and suggested adopting a Tariff-Based Competitive Bidding (TBCB) model for transmission projects to attract private and foreign investment.

Shift toward productive energy use

Shubha laxmi Shrestha, Deputy Director at the Alternative Energy Promotion Centre (AEPC), said Nepal’s energy policy has evolved from ensuring access to electricity toward promoting productive energy use.

She said AEPC has installed more than one million small solar systems over the past three decades and is now expanding rooftop solar systems exceeding 500 kW in the industrial sector.

According to her, electricity quality, reliability, and safety are more important than price. Greater electricity use in industrial and commercial sectors would generate significant multiplier effects across the economy.

She added that the Sustainable Energy Challenge Fund has encouraged private sector investment, with 60 MW of solar capacity already installed and another 60 MW under development.

She also highlighted the importance of expanding net metering, net billing, agrivoltaics, and integrated hydropower-solar-storage systems to strengthen Nepal’s energy security.

Data centers and digital economy

Senior Consultant for Data Centers and Crypto Mining, Dipendra Bad Shah, said Nepal currently has fewer than 15 public and private data centers, consuming around 15 MW of electricity.

He said Nepal’s cool climate, particularly in the mid-hill region, offers a competitive advantage by reducing cooling costs for data centers.

Shah argued that data centers should be officially recognized as industries rather than commercial establishments, enabling them to receive electricity under industrial tariff rates instead of commercial rates.

He also emphasized the need for service-level agreements (SLAs) with the Nepal Electricity Authority to ensure uninterrupted power supply, which is essential for data center operations.

With the rapid growth of artificial intelligence (AI) and the digital economy, he said demand for hyperscale data centers will continue to rise. To support this, Nepal should invest in battery storage, pumped-storage hydropower, and reservoir-based projects to ensure year-round reliable electricity, while simultaneously expanding high-quality internet infrastructure across hilly regions.

Prioritize productive domestic consumption

Infrastructure developer and advocate for industrial electricity consumption Arun Kumar Subedi said Nepal should prioritize productive domestic electricity use over exports.

According to him, expanding electricity consumption in data centers, crypto mining, and manufacturing industries could generate substantial economic benefits.

He said Nepal’s cool climate and abundant hydropower resources make it an attractive destination for international technology companies seeking locations for data centers, which would increase both employment and electricity demand.

Subedi also called for policy discussions on legally recognizing crypto mining.

He cited the stalled Dhaubadi iron ore project in Nawalpur, which has the potential to produce green steel through foreign investment, as an example of how political inaction and cumbersome administrative procedures have hindered major industrial projects.

He urged the government to reduce excessive regulation, create a more investment-friendly environment, encourage private sector participation, reopen Power Purchase Agreements (PPAs) for large projects, and facilitate industrial investment.

Shared conclusion

Speakers agreed that Nepal must end the recurring situation in which surplus electricity is wasted during the monsoon while the country still imports 600–700 MW of electricity during the dry season.

They stressed that greater investment in reservoir-based hydropower, energy storage systems, and transmission infrastructure is essential.

The participants concluded that Nepal should treat electricity not merely as an export commodity but as a foundation for industrial production, the digital economy, green industries, and high-value manufacturing. Expanding domestic electricity consumption and accelerating industrial transformation, they said, should take priority before focusing on electricity exports.

Urjasanchar