Future of Nepal’s Electricity: long-term policy suggestions

Main points

• Electricity supply and demand varies at different time intervals
• Electricity supply side is heavily based on renewable sources increasing the challenges of creating reliable electricity system
• Demand side management programs, storage systems, trade agreements with India can be some of the long-term solutions

Let’s start with few questions: What determines the supply and demand of electricity? Does the demand remain same throughout the year? What about the supply? Is it possible, technically and economically, to generate electricity as required to serve the load? These are few questions to consider before thinking about developing a reliable and adequate electric system.

In this post, I discuss issues that Nepal’s electricity sector may face in future. One of the previous posts discusses the short-term solutions of current power shortage problems. Moreover, the recent post talks about electricity sector’s possible issues in the future.

Funds for Nepal’s Energy Sector in Annual Budget of 2013

Nepal Government announced the annual budget of Rs. 517.24 billion for the fiscal year 2013/14. Government allocated Rs 30 billion of energy related projects mainly for electricity generation, construction of transmission and distribution lines. This is almost 6 percent of the total announced budget. Other notable allocation are in agriculture (Rs 21.40 billion), education (Rs 80.95 billion), physical infrastructure (Rs 35.27 billion), and health (Rs 30.43 billion). Please note that $1 = Rs 95.

What are government plans in the energy sector?

Government plans to start construction of 140 MW pumped storage hydropower plant in Tanahu from next year and has issued Rs 1.05 billion for this purpose. Similarly, Rs 4.66 billion will be used to complete the construction of 60 MW Trishuli A, 42 MW upper Modi, 32 MW Rahughat, 30 MW Chameliyagadh, and 14 MW Kulekhani hydropower projects.