Nepal is a country enclosed by land, situated between China and India. It has a total area of 148,006.67 square kilometers and a population of 29.16 million.CBS, G. o. N., National Statistic Office. (2021). National Population and Housing Census 2021. It has a small economy, with a GDP of $42 billion in 2024, amounting to about 1% of South Asia and 0.04% of the World's GDP.
Nepal's total energy consumption in 2019/2020 was 14.464 million tons of oil equivalent, increased from 10.29 Mtoe in 2012. Electricity consumption was 3.57 TWh. The energy mix is dominated by traditional sources like firewood and agricultural residue (68.7%), most of this primary energy (about 80%) represents solid biofuels used in the residential sector (for heating, cooking etc.). Smaller shares of energy come from commercial sources like petroleum and coal (28.2%) and renewable sources.AEPC, A. E. P. C. (2021). Annual Report. About 23% of the electricity is imported, with the rest almost completely supplied by hydroelectricity. Nepal also exports hydroelectricity to India in the wet season.
Nepal has no known major oil, gas, or coal reserves, and its position in the Himalayas makes it hard to reach remote communities. Consequently, in the absence of the energy grid reaching remote locations, most Nepali citizens have historically met their energy needs with biomass, human labor, imported kerosene, and/or traditional vertical axis water mills. Energy consumption per capita is thus low, at one-third the average for Asia as a whole and less than one-fifth of the world average.
The country has considerable hydroelectricity potential. The commercially viable potential is estimated at 44 GW from 66 hydropower sites.
In 2010, the electrification rate was only 53% (leaving 12.5 million people without electricity) and 76% depended on wood for cooking. With about 1 toe for every $1,000 of GDP, Nepal has the poorest energy intensity among all south Asian countries. The country has therefore very large energy efficiency potential. Oil products Petroleum is the second largest energy fuel in Nepal after firewood and accounts for 11% of primary energy consumption in the country. All petroleum products are imported from India.
At the moment, the import of petroleum products is transacted exclusively between the Nepal Oil Corporation and the Indian Oil Corporation. 75% of the imports are diesel, kerosene and gasoline. Due to the high energy demand in the country, the dependence on petroleum imports is increasing. More than 62% of the petroleum products are used in the transportation sector. Besides that, petroleum products constitute important energy sources for cooking purposes in households.
Biomass
Biomass is by far the most important primary energy source in Nepal. Biomass comprises wood, agricultural residues and dung.
One major problem with this is that burning these biomass substances for cooking is a common practice (87.3%) and thus exposes those living in the house to harmful air pollutants.Ranabhat Chhabi Lal et al., "Consequence of indoor air pollution in rural area of Nepal: a simplified measurement approach," Frontiers in Public Health 3 (2015), https://doi.org/10.3389/fpubh.2015.00005. Those who cook and live a substantial amount of time in the household (often women and children) are exposed to these pollutants and incur a high risk of acute respiratory infection. In addition, the burning of these biomass fuels often emits large quantities of greenhouse gases (GHGs) into the outside air. One study in a mountain village of Nepal showed that carbon emissions from traditional cooking methods were around 8 tons per person per year.Suwal Rajani and Bajracharya Siddhartha Bajra, "Assessment of Current Energy Consumption Practices, Carbon Emissions and Indoor Air Pollution in Samagaun, Manaslu Conservation Area, Nepal," Journal of Natural Resources and Development 6 (2016), https://doi.org/10.5027/jnrd.v6i0.07.
Biogas The farming system in Nepal is heavily dependent on livestock, with at least 1.2 million households owning cattle and buffalo. The biogas potential is therefore high and is estimated to be at least one million household-size plants, 57% located in the Terai plains, 37% in the hills and 6% in remote hills.
According to Nepal's Alternative Energy Promotion Centre, as of July 2011, 241,920 biogas plants were installed in more than 2,800 Village Development Committee areas and in all 75 Districts under their Biogas Support Program.
Biogas uses anaerobic digestion, in which microorganisms break down organic matter into methane and carbon dioxide without oxygen.David Fulford, Small-scale rural biogas programmes a handbook (Rugby, England]: Rugby, England : Practical Action Publishing, 2015) A positive byproduct of biogas is that excess wastes produced by the system can be used as organic fertilizer. Biogas as an alternative energy source helps reduce dependence on low grade energy sources (biomass) which pose significant health risks and contribute to GHG emissions. The Nepalese have reported barriers to biogas implementation, including the large upfront capital costs, the inability of traditional biogas systems to operate in cold and mountainous climates, and the isolation of villages making installation logistics more difficult.Gloria V. Rupf et al., "Barriers and opportunities of biogas dissemination in Sub-Saharan Africa and lessons learned from Rwanda, Tanzania, China, India, and Nepal," Renewable and Sustainable Energy Reviews 52, no. C (2015), https://doi.org/10.1016/j.rser.2015.07.107.
Renewable energy
Renewable energy in Nepal comes from hydropower, solar energy, biomass, biogas, and wind energy.
Solar Nepal has favorable solar resources, receiving daily average solar radiation of 3.6 to 6.2 kW/m2. Sunshine duration is around three hundred days per year or 6.8 hours per day, equivalent to approximately 2100 hours annually. This indicates good potential for solar power generation across most regions in Nepal.Bhattarai, U., Maraseni, T., Apan, A., & Devkota, L. P. (2023). Rationalizing donations and subsidies: Energy ecosystem development for sustainable renewable energy transition in Nepal. Energy Policy, 177, 113570. Nepal's favorable solar resources have attracted interest in solar technology due to their relatively low upfront costs and fast installation. As a result, some solar applications like household lighting, water pumping, water treatment, domestic space, and water heating have been used in Nepal over the past few decades. Although the solar technology implementation in Nepal has been a small, isolated system, extensive integration is possible into the national grid. It might contribute significantly to fulfilling overall energy demand in Nepal. The Government of Nepal plans to develop a large-scale 250 MW solar project in the Tarai plains, including a 20 MW storage systemNEA/GoN, N. E. A. (2023). Energy Synopsis Report 2023.
Hydropower
Nepal has a highly mountainous landscape, with elevations rising from 60 meters above sea level to 8848 meters within an average north-south distance of less than 150km. An annual water discharge of 225 billion m³ flows out of the country, supplemented by high hydraulic heads.Authority, N. E. (2020). Nepal Electricity Authority a year in review—The fiscal year 2019/2020. In: Kathmandu. Nepal is often called the "water tower of South Asia" due to its vast water resources. The country's rugged topography, numerous rivers and streams with 6000 a total length of about 45,000 km, lends itself to hydropower generation.Adhikari, D. (2006). Hydropower development in Nepal. NRB Economic Review, pp. 70–94. Hydroelectric potential in Nepal is approximately 83000 Megawatts, of which 45,000MW are economically and technically viable.Alam, F., Alam, Q., Reza, S., Khurshid-ul-Alam, S., Saleque, K., & Chowdhury, H. (2017). A review of hydropower projects in Nepal. Energy Procedia, 110, 581-585.
Around 86% of Nepal's population has access to grid electricity, while 10% depend on off-grid distributed generation, mainly from renewables; between 2018 and May 2022, Nepal doubled its installed capacity from 1,069 MW to 2,100 MW. Continuing capacity expansion can be used to address long-suppressed domestic demand, replace imported fossil fuels, and export to the South Asian region.PROJECT, U. U. N. (2022). Tariff-based competitive procurement of solar power in Nepal. D. C. LLP.
The rivers of Nepal can be broadly classified into three types according to their origins: The four central river systems of the country: Koshi, Gandaki, Karnali, and Mahakali. All of them originate from glaciers and snow-fed lakes. Rivers originating from the Mahabharat range, including Babai, West Rapti, Bagmati, Kamala, Kankai, and Mechi. Streams and rivulets originating from the Chure hills; these rivers cause flash floods during monsoon rains but have very little or no flow during the dry season.ADB, I. (2006). Environment assessment of Nepal: Emerging Issues and Challenges. Kathmandu: ICIMOD.
At present, about 10% of the total rainfall in Nepal falls as snow. Around 23% of the country's land area is above the enduring snow line at 5000 meters. Glaciers cover about 3.6% of Nepal's total area. Nepal has 3,252 glaciers spanning an area of 5,323 km², with an ice reserve of around 481 km³. The country also has 2,323 glacial lakes encompassing 75 km².Mool, P. K., Wangda, D., Bajracharya, S. R., Kunzang, K., Gurung, D. R., & Joshi, S. P. (2001). Inventory of glaciers, glacial lakes, and glacial lake outburst floods. Monitoring and early warning systems in the Hindu Kush-Himalayan Region: Bhutan. Inventory of glaciers, glacial lakes, and glacial lake outburst floods. Monitoring and early warning systems in the Hindu Kush-Himalayan Region: Bhutan.
Small-scale hydroelectricity generation in Nepal dates back to the 1960s, when the government promoted subsidies for remote installations. The semi-government Nepal Electricity Authority is responsible for significant hydropower projects. The Alternative Energy Promotion Centre (AEPC) was established as an autonomous institution in 1996 to promote large-scale sustainable renewable energy use under the Ninth National Plan. It has been mandated to advance various renewable energy technologies in Nepal. The AEPC is the government agency responsible for promoting renewable energy technologies. It provides subsidies and technical assistance to community and regional government offices.
The Nepal Micro-Hydro Development Association represents around 60 microhydropower companies in the country.Butchers, J., Williamson, S., Booker, J., Tran, A., Karki, P. B., & Gautam, B. (2020). Understanding the sustainable operation of micro-hydropower: A field study in Nepal. Energy for Sustainable Development, 57, 12-21. It advocates for these companies and regulates training for plant operators and managers. Locally, district coordination committees represent communities within a district. These committees usually provide financial support to renewable energy projects in their districts.Kumar, P., Yamashita, T., Karki, A., Rajshekar, S., Shrestha, A., Yadav, A., & Asia, S. (2015). Nepal-Scaling up electricity access through mini and micro hydropower applications: a strategic stock-taking and developing a future roadmap (Vol. 2): Summary. Washington, DC: World Bank Group. Available online at: http://documents . worldbank. Org/curated/en/527221467993505663/Summary.