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Energy Situation in Nepal

Nepal is a country with abundant natural resources, particularly water, solar, and wind energy. Despite this potential, the country faces significant energy challenges that affect households, industries, and overall economic development.

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  • Nepal has huge potential of hydropower about 83,000 MW but less than 2% is currently produced and used.

Understanding the energy situation in Nepal requires examining the sources, consumption patterns, and challenges in the sector.


a) Hydropower

  • Nepal has an estimated 83,000 MW of theoretical hydropower potential, with about 42,000 MW considered economically feasible.
  • Hydropower is the primary source of electricity in the country, supplying both domestic and industrial needs.
  • Seasonal variations and reliance on rivers make energy generation variable and dependent on monsoon cycles.

b) Fossil Fuels

  • Nepal lacks significant fossil fuel reserves and imports petroleum products such as petrol, diesel, and LPG for transportation, industries, and cooking.
  • Dependence on imports increases the trade deficit and exposes the country to global fuel price fluctuations.

c) Renewable Energy

  • Nepal has potential for solar, wind, and biomass energy.
  • Solar energy is increasingly being adopted in rural areas for household electrification.
  • Biomass (firewood, agricultural residues) remains widely used in rural households, though it is inefficient and environmentally unsustainable.

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