Nepal’s national electricity grid is supplied with power from a remarkably decentralised array of 162 hydropower projects and 14 solar photovoltaic schemes spread across 43 districts, supplying power over the grid to 30 million people.
Another 249 hydropower projects and 14 solar projects are at different stages of construction, positioning 11 new districts to contribute power to the grid by 2030. Six of the country’s seven provinces generate hydropower as their main energy source, while Madhes Province generates solar energy.&nbsp;
While NEA (Nepal Electricity Authority) and its subsidiaries own and operate 20 generation stations, the remaining are owned and operated by Independent Power Producers (IPP). All but two of the IPPs are Nepali companies that have successfully mobilised over $2 billion in investment.
This investment has been spread widely across the country. Eleven districts generate more than 100MW each with Dolakha, Lamjung, Solukhumbu, and Ramechhap each exceeding 200MW (map). The average size of hydropower projects on Nepal’s grid is 15.5MW, while the average solar project is 4.2MW.
The average size of projects under construction is larger -- 39.5MW for hydro and 6.9MW for solar respectively.&nbsp;
For most hill and mountain districts, hydropower is easily the largest investment, private or public, in their history. &nbsp;
This decentralised power generation model is a relatively recent development for Nepal. In 1995 when the World Bank withdrew (adjoining article) its planned investment from the 201MW Arun III project, NEA had not envisioned the entry of the private sector. In fact, its published strategy was to mobilise international aid for hydropower projects larger than Arun III.
The well-known cancellation of Arun III in 1995 and the availability of alternative models led to Nepal's decentralised power development. It matters that this distributed generation and storage of electricity is close to the point of use.
Centralised power stations have been the norm for industrialised and emerging economies to achieve rapid and cheap electrification, taking advantage of economies of scale of large power plants.
Also in Nepal, when its vast hydropower potential was first quantified in the 1960s, plans were drawn up for mega hydropower projects with reservoirs such as Karnali, Kosi, and Pancheswar. None of these could be realised, however, due to lack of financing.&nbsp;
Donor funds could never be aggregated at the scale needed for the investments required, and the country was not attractive to the international private sector. Nepal opted not to invite India to construct its large hydropower projects to supply the Indian market the way Bhutan did.
It took the country 40 years to find its way -- generation led by private domestic investment supplemented by public sector involvement by the NEA.&nbsp;
The cancellation of Arun III resulted in the government signing expensive dollar-denominated power purchase agreements (PPA) with international producers like Khimti (60MW) and Bhote Kosi (45MW) to partially make up for the shortfall. These were against the wishes of NEA management.&nbsp;
It was in reaction to these expensive PPAs that engineers at NEA received permission to develop Chilime (20MW) with rupee-denominated PPA and the government at the time announced a standard tariff in NPR for power generated by IPPs.&nbsp;
Once NEA showed its willingness to sign these PPAs, hundreds of companies sprang up to apply for licenses to survey and construct small hydropower plants throughout the country.
Decentralised power development contributes to construction jobs and infrastructure investment, especially in remote districts where many of the best hydropower sites are located.&nbsp;
Construction of an electricity generation station provides at one go the two most important infrastructure any district needs to generate jobs — power and a road.&nbsp;
Decentralised generation provides energy security to load centres throughout the country since damage to power plants in one part of the country need not affect other areas that have their own generation. It also reduces transmission losses as large amounts of power do not have to be transported from one end of the country to another.
Nepal’s strategy of decentralised power development is coming to maturity in the era of the climate crisis, when the global response has been a surge in renewable energy investments and grids all over the world pushing to become decentralised.&nbsp;
Landslides, flooding and glacial lake outburst floods have always posed risks to infrastructure projects in the Himalaya, and climate breakdown has increased this risk with the severity and frequency of cloud bursts.&nbsp;
The 2024 monsoon has been particularly bad, temporarily shutting down NEA’s 456MW Upper Tamakosi, 60MW Upper Trisuli 3A, 40MW Chameliya, and 10MW Sunkosi projects,&nbsp;
It also downed the 36MW Balefi, 20MW Lower Modi, 18MW Middle Modi, and 7.5 MW Indrawati III operated by IPPs.
Nonetheless, there has not been any increase in load shedding because power plants across other river basins continued to generate without interruption.&nbsp;
Having power plants spread across two thirds of the country rather than concentrated in a few river valleys distributes the risk to the country’s entire power supply.&nbsp;
Adding solar energy to the generation mix diversifies the types of renewable energy available and contributes to power in the winter months. It also makes the grid more secure during periods of drought when hydropower production declines.&nbsp;
Solar energy is a perfect complement to hydro since by definition its production will peak during periods with low rainfall.
Distributed generation is shaping up to be an important component of Nepal’s decentralised energy system. This increases energy security to users and reduces transmission losses.
The roughly 10MW of rooftop solar PV systems that have been installed in the past year by hotels, factories, medical colleges and flour mills to reduce their electricity bills is an example of how it is catching on.
Decentralised and distributed generation do have additional costs in the need for more extensive power networks. Extending high voltage transmission lines to evacuate power from smaller local projects adds cost.&nbsp;
However, every power plant and the transmission line to access it has aided Nepal in accelerating electrification and strengthening power infrastructure to the district where it is located.
As networks become more complex, utility-scale battery storage, and the availability of distributed storage in electric vehicles, the grid needs to be made smarter to better manage the tens of thousands of generation and storage points Nepal is likely to have in the coming years. &nbsp;
Bikash Pandey is Director of Clean Energy and Circular Economy at Winrock International. People Power is his new regular column in Nepali Times on global energy issues relevant to Nepal. &nbsp;

Bikash Pandey

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Decentralising power in Nepal

<figure><img width="1400" height="787" src="https://superdesk-pro-c.s3.amazonaws.com/sd-nepalitimes/2022110714114/636902ac9c7e80680e037c79jpeg.jpg" alt=""/><figcaption>DHCF</figcaption></figure>Nepal’s planners have always faced an uphill task in ensuring energy self-sufficiency. The main issues in the past have been politics, the absence of a strategic vision, and policies that forced the country<a href="https://www.nepalitimes.com/here-now/how-they-kept-nepal-in-the-dark-ages/" target="_blank" rel="noopener"> to suffer chronic power cuts</a>. But the country has a new beginning with a new government that has promised political stability and economic prosperity.The other challenge is an engineering one. Nepal may have one of the highest per capita hydropower potential, but most of the total 1044MW capacity today comes from run-of-river plants which depend on the water flow to turn turbines, and not from <a href="http://archive.nepalitimes.com/regular-columns/Comment/storing-water-reservoir-Nepal,1042" target="_blank" rel="noopener">reservoirs</a> that can store monsoon water for the dry season.This means the country suffers from <a href="http://archive.nepalitimes.com/article/nation/How-%20to-%20avoid-power-cuts-this-winter-solar-energy-LED,3769" target="_blank" rel="noopener">shortfalls in production during winter when peak demand is highest</a>. There are also the daily peaks in the mornings and evenings that need to be covered by Nepal’s only storage dam, the 92MW Kulekhani cascade. Currently, Nepal meets nearly all its peak demand by <a href="http://archive.nepalitimes.com/article/nation/nepal-india-thermal-power,3570" target="_blank" rel="noopener">importing coal-fired electricity from India</a>.Peak load demand is traditionally met with electricity from hydropower reservoirs or power plants burning fossil fuels. But as countries try to meet carbon emission targets, there is pressure to adopt solar and other renewable energy sources to meet gap. <img width="736" height="1500" src="https://superdesk-pro-c.s3.amazonaws.com/sd-nepalitimes/2022110714114/636902af9c7e80680e037c7ajpeg.jpg" alt="">This is precisely what the <a href="http://www.dolmaimpact.com/" target="_blank" rel="noopener">Dolma Himalayan Climate Fund (DHCF)</a> is trying to do with its proposal to generate 150MW of solar power and store 20MW of it in battery systems to meet Nepal’s seasonal and daily peaks.Called Peak Energy Management (PEMa) System, the first phase of the project got approval from the Investment Board Nepal (IBN) last week to ‘time-shift’ daytime solar generated power to help meet evening peak demand, and also store surplus hydroelectricity generated during the night to partially meet the morning peak demand.Such generation and storage of solar power would have been prohibitively expensive till even two years ago. But the cost of storing energy in batteries dropped to less than $200/kWh from $1,200/kWh ten years ago. The price of photovoltaic cells have similarly plummeted to only $60/MWh compared to $400/MWh in 2008.The other advantage is that a project of this scale can be up and running within two years compared to the decade that it will take for Nepal’s next big reservoir projects like Budi Gandaki and Tanahu. Solar is also much more ecologically benign. There is a neat fit: Nepal’s peak demand is in winter when solar generation is highest because of cloudless skies.“We are not trying to replace hydro with solar, we just want a flexible and reliable system to meet peak demand by complementing hydropower,” explains Mike Winkel, Director of the Dolma Himalayan Climate Fund, an offshoot of the Dolma Impact Fund, the first international private equity fund for Nepal which has investments in the hydropower, technology, agriculture and health sectors.The Dolma Group was set up by Tim Gocher, a finance executive and professor specialising in energy. (<a href="https://www.nepalitimes.com/business/a-part-of-something-bigger/" target="_blank" rel="noopener">Read interview</a>, and <a href="https://www.youtube.com/watch?v=zzp3Lh9zCNU" target="_blank" rel="noopener">watch Nepali Times Studio on our YouTube Channel</a>.)“The project is not going to replace hydro by any means, but solar does give Nepal another energy option which should directly offset some of the imports from India,” Gocher told Nepali Times.The PEMa serves the same purpose as a storage dam to cover peak winter demand, but unlike reservoirs it can be completed in two years, and can be quickly upscaled to 850MW in the second phase. This makes business sense because Nepal’s electricity demand is expected to grow at 7% per year, while peak deficit will continue for another ten years until the big dams come online.“It will buy Nepal time with short-term supply of power to meet peak time deficits,” says Sandip Shah, Managing Director of DHCF, an energy specialist who was formerly with the Norwegian SN Power. <img width="839" height="355" src="https://superdesk-pro-c.s3.amazonaws.com/sd-nepalitimes/2022110714114/636902b29c7e80680e037c7bjpeg.jpg" alt="">“My entire career has been with hydropower, and I have always grappled with making Nepal self-reliant in meeting daily and seasonal peak power deficits. With prices of solar and battery coming down, the technology is finally there to make Nepal energy independent,” explains Shah.When it comes into operation, possibly by 2020, PEMa will be one of the first utility scale battery operated grid power plants in the region, and it will immediately reduce Nepal’s power import bill as well as carbon footprint which has doubled due to the current import of coal-fired energy from India.At the Investment Board Nepal, CEO Maha Prasad Adhikari is also excited about the venture. “This is an innovative way to improve Nepal’s energy mix, and can support our peak-time and dry season demand within a short timeframe.”The Dolma Impact Fund will also be building on its investments in <a href="http://archive.nepalitimes.com/article/nation/reservoirs-of-suspicion/hydropower-geopolitics%20,3991" target="_blank" rel="noopener">Nepal’s hydropower</a>, that include the 28.1MW Lower Likhu project in Okhaldhunga and the 6.4MW Suri Khola Project in Dolakha into which the Fund has injected $4.5 million and may invest more in hydropower or other solar projects.Winkel used to be with the global energy giant E.ON managing 60,000MW grids, and says PEMa is trying to find the optimal technology to meet the shortfall in Nepal’s peak energy supply. He adds: “Making renewable energy competitive has driven me for many years, and PEMa makes this vision a reality by combining state-of-the-art power generation and storage technologies to deliver clean, secure and competitive electricity for Nepal.”Read also:<a href="https://www.nepalitimes.com/here-now/how-they-kept-nepal-in-the-dark-ages/" target="_blank" rel="noopener">How they kept Nepal in the dark ages</a>, Ramesh Kumar<a href="http://archive.nepalitimes.com/regular-columns/Comment/storing-water-reservoir-Nepal,1042" target="_blank" rel="noopener">Storing water</a>, Bishal Thapa<a href="http://archive.nepalitimes.com/article/nation/nepal-india-thermal-power,3570" target="_blank" rel="noopener">Cloud with a dark lining</a>, Om Astha Rai

Kunda Dixit

Nepal turns to solar and batteries to meet peak demand

Samsung Nepal has opened pre-orders for the Galaxy A57 5G and A37 5G. Both phones run Samsung’s One UI 8.5, featuring AI capabilities like voice transcription, Circle to Search, and photo editing. They feature a 50MP triple-camera system, a Super AMOLED display, and six years of OS and security updates.

Galaxy A series

Know your Ministers

‘One early morning, we heard the ambassador’s wife cry out, “Ram, Ram, Ram!” A disaster has befallen Nepal!” She had heard on the radio that a fire had consumed Singha Durbar." This is not about the arson attack on 9 September 2025, but the one on 8 July, 1973. It started in the South Wing of the then single-largest building in all of Nepal. It took two days to bring the blaze under control, requiring the use of explosives to demolish one wing to protect the imposing western facade. As Bhekh Bahadur Thapa recalls in the English translation of his memoir A Life in Public Service: Nepal from Autocracy to Democracy, he was then on leave from the Nepal government serving with the IDRC in Ottawa.&nbsp; He had already served as Nepal’s Finance Secretary at age 25, went on to be Finance Minister and Governor of Nepal Rastra Bank. He was already younger than some of the GenZ ministers in Nepal’s present RSP government. Thapa, now 89, was at the launch of the book in February which was attended by former diplomats and bureaucrats. After speeches by panelists, there was a question from the audience about how Thapa had managed to be the diplomat he was, managing Nepal’s international relations on the world stage.&nbsp; Writer and journalist Akhilesh Upadhyay, who was moderating the panel, responded by going into the section of the book where we see Thapa as an ambassador to the US, playing tennis with White House officials, cultivating a network of contacts to project the identity and welfare of Nepal, and making it possible for a state visit by King Birendra to Ronald Reagan’s America. The book is full of anecdotes that suggest Thapa was a clever and strategic diplomat, always calm and unruffled, easily making friends in high places with his maturity and engaging sense of humour. Thapa’s memoir is heavy on details about Nepal’s administrative history during the years he was active in public service, serving as minister and ambassador under three kings: Mahendra, Birendra and Gyanendra, and alongside five prime ministers.&nbsp; Aside from an insider look on how certain treaties, development deals and research projects in Nepal came into fruition, Thapa goes into great detail about his personal and professional relationships with the kings, ministers, ambassadors, foreign leaders and politicians.&nbsp; As a reader, one is struck by the level of detail around the events that unfolded in Nepal over the years during Thapa’s tenure. Was Thapa recording a journal over the years of the events and the conversations that transpired, or were they committed to his phenomenal memory? Either way, the reader gets a glimpse of Nepal’s recent history from the early days of the Panchayat, through the People’s Movement and the democracy period, the Maoist insurgency, Royal Palace massacre of 2001, and Gyanendra’s coup of 2005.  <figure> <img src="https://publisher-publish.s3.eu-central-1.amazonaws.com/pb-nepalitimes/swp/asv65r/media/2026041204048_125dc8ae300a1e33124f394abe724d42727f83e067b0201d2008b58d60c459a4.jpg" data-media-id="editor_0" data-image-id="2026041204048_125dc8ae300a1e33124f394abe724d42727f83e067b0201d2008b58d60c459a4" data-rendition-name="original" width="1584" height="1000" loading="lazy" alt="How to win friends and influence nations NT"> </figure>  Not enough is said about the political parties of the time whose presence led to the way Nepal’s multiparty democracy came to be shaped. The book keeps its focus on the administration and the key figures around it, mostly those in the Panchayat era. Towards the second half of the book, we do start to hear about political parties, but not in great depth. Another figure whose presence in the book is conspicuously less prominent is that of his wife, Rita Thapa — the person who seems to have rescued him every time financial quandary or family care became a challenge. Yet, we do not see her as a full person. Perhaps because of the personal tragedies in his life, the children are also barely mentioned.&nbsp; The book is therefore less personal and more technical. Throughout, we learn about Thapa’s thinking as he navigated the world of diplomacy to win him the trust of those who mattered. There are tips here for a new generation of Nepali officials and diplomats about how much commitment and focus is needed to be good at one’s job and serve the national interest. This book adds to tomes that have been written on Nepal’s fragile relationship with India. ‘India has always wished for Nepal to remain dependent on it,’ writes Thapa, who served as Nepal’s ambassador to India and later in the Eminent Persons Group &nbsp;on Indo-Nepal relations that has been allowed to languish. The book has several insights into the Indo-Nepal trysts with diplomacy and agency.&nbsp; China’s role is also recorded, viewed through conversations during a visit to Beijing, but all that was before Nepal’s neighbour to the north emerged as a world economic and military power. The book also has such sudden instances of quirkiness and humour. For instance, we see a young Thapa in America explaining to a government official why he would like to return to Nepal instead of settling down in the US. “Because, Nepal is beautiful,” he said. The text is immaculate and does not read much like a translation, credit for which clearly goes to the team that put the edition together: translator Prawin Adhikari, &nbsp;Anagha Neelakanthan and Bhekh Thapa’s daughter, Manjushree. As Nepal enters a new era of governance and diplomacy, A Life in Public Service: Nepal from Autocracy to Democracy should be essential reading for students of political science, economics and foreign affairs who can gain a fresh perspective on the country’s trajectory.&nbsp; There are dozens of forgotten state secrets recorded in the book, but the reader must also remember this is a story told from one person’s perspective and there may be others.&nbsp; So, what really made Thapa the diplomat he was? I met him in 2004 at the Kantipur TV studio when he was serving as king Gyanendra’s foreign minister. He was there for a studio interview, and I was just done with my English newscast.&nbsp; He surprised me at the door: “Pratibha! I’ve been reading your articles in The Kathmandu Post. You must keep writing.” I thanked him, glad to have been noticed for my work by a stranger. That was perhaps one of the things that set Thapa apart — he excelled at staying close to those in power, while also noticing those who were not.  <figure> <img src="https://publisher-publish.s3.eu-central-1.amazonaws.com/pb-nepalitimes/swp/asv65r/media/20260412040412_213e706136a038ec9f5e2b8c6d7f7c1e9ceed9479e22fe2884872ad7bd20955f.jpg" data-media-id="editor_1" data-image-id="20260412040412_213e706136a038ec9f5e2b8c6d7f7c1e9ceed9479e22fe2884872ad7bd20955f" data-rendition-name="original" width="1136" height="702" loading="lazy" alt="Book details"> </figure>

How to win friends and influence nations

Prime Minister Balendra Shah on Wednesday broke tradition and met with 17 foreign envoys collectively, a move that was a notable departure from how his predecessors operated.&nbsp;
Shah had already set himself apart by talking less, listening more, and delegating to trusted friends. But by meeting all ambassadors at one go in the presence of the Foreign Ministry, he signalled a paradigm shift in how he wants Nepal to be seen: no longer just balancing India and China, but as a country confident about its <a href="https://nepalitimes.com/opinion/guest-editorial/tripolar-contestation-over-nepal">strategic importance and place in the world</a>.
In just two weeks, the <a href="https://nepalitimes.com/news/rsp-dos-and-don-ts">RSP has sprung into action </a>on multiple fronts to implement its ambitious 100-point, 100-days action plan. It has taken short-term measures to mitigate the impact of the Gulf war, as well as medium- and long- term measures to streamline the bureaucracy. A few high-profile figures have been made examples of to drive the message home.
Earlier this week, the government recalled six politically appointed ambassadors, the most notable being long-serving Shankar Sharma from New Delhi. The Kathmandu District Court issued arrest warrants against former prime minister Sher Bahadur Deuba and his former foreign minister wife Arzu Rana on charges of money laundering and corruption.
Each ministry has been trying to clean up the accumulated rot from the past three decades: regulatory overhaul of microfinance, education, health and service delivery.&nbsp;
These actions widely disseminated campaign-style on YouTube and TikTok have made most Nepalis hopeful that the party they installed in power means business.
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BACKLASH
But such attempts to overhaul a long-entrenched political culture were bound to face backlash. In their impatience and enthusiasm to get things done, some of Prime Minister Shah’s ministers have over-reached.
It was common knowledge that government-paid advertising in the mainstream press was kickback-driven, but the PMO’s directive that official notices be published or broadcast only on state-run media has been denounced — especially as the media industry struggles to stay afloat.
More serious are some recent appointments by ministers of relatives and figures closely associated with the RSP to key positions. This has rankled because this party built its political plank on ending nepotism and graft.&nbsp;
News that Home Minister Sudan Gurung allegedly had not paid rent on leased land, which illegally encroached on the lake in Pokhara did not help. &nbsp;
Prime Minister Shah himself has come under scrutiny for appointing a kitchen cabinet full of male buddies from his time as Kathmandu mayor. To douse criticism he brought in as adviser investigative journalist Deepa Dahal, who has exposed corruption in high places of the previous coalitions.&nbsp;
Shah’s appointment of another political adviser Asim Shah to the head Constitution Amendment Task Force, is also seen as problematic. He is a filmmaker and former lawmaker, but does not have a background in constitutional law.&nbsp;
Even more controversial is the Cabinet’s decision to appoint RSP Chair Rabi Lamichhane’s legal counsel, Narayan Kandel, as Attorney General. Kandel used to be a UK permanent resident, and does not have as much experience practicing law in Nepal.&nbsp;
Kandel’s appointment drew flak and raised eyebrows, and with the pending legal cases against Lamichhane this appointment represents a flagrant conflict of interest.
Health Minister Nisha Mehta was also accused of favouritism after reappointing Junu Shrestha, wife of Labour Minister Dipak Kumar Shah, as member of the Health Insurance Board which had earlier suspended her. The Labour Minister’s rambling rant at the Board’s meeting on Tuesday has not helped the RSP’s image.&nbsp;
(UPDATE: On Thursday, Prime Minister Shah sacked the Labour Minister after the RSP found him in breach of the party's code of conduct and discipline. He served 14 days in the Cabinet, one of the shortest tenures for a minister in Nepal )
It is hard to know what <a href="https://nepalitimes.com/news/ball-in-balen-s-court">Balendra Shah is thinking</a>, and how Rabi Lamichhane is going to justify some of these moves. After all, making politics, governance, and bureaucracy a meritocracy has been the core tenet of the RSP, and it risks alienating its mainly youth base if these missteps persist.
But at least for now, most RSP supporters seem to be giving the party the benefit of doubt.

energy-generation

Decentralising power in Nepal

Nepal turns to solar and batteries to meet peak demand

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How to win friends and influence nations

Nepal’s new government springs into action