Nepal: Birth of Hydropower in the Himalayas


  • Nepal is situated between two important trade centers that will determine the future of the 21st century: China and India.
  • Nepal includes some of the highest mountain ranges in the Himalayas. Due to its varied resources and central location, Nepal is of strategic importance. 
  • Nepal is of great importance for the development of hydropower. Because Nepal lies above the lowlands, its mountains feed water into the lowland water system.
  • The monsoon, glaciers, and reservoirs contribute to a relative abundance of water resources that can be used for hydropower generation. Some of these resources are already being exploited.


Nepal is located in the mountainous Himalaya region. Local energy companies may find it more challenging to develop the geography. The mountainous character of the land prohibits, in some places, the economic development of its resources.

Developing Nepal’s energy resources can lead to additional costs simply because the landscape is rugged and mountainous. There are few lowland areas. These lowland areas are more likely to be found in southern Nepal, which may be suitable for developing a full-fledged energy infrastructure. This may or may not involve greater integration with regional energy infrastructure with India. The lowlands are particularly important for power grid development. A fully integrated distributed power system may be more difficult to implement because it requires numerous interconnectors that limit operators’ ability to move and shift power loads between subsystems of a comprehensive grid. A comprehensive, extensive, sophisticated electricity grid can allow electricity operators to spread costs. A large network can allow electricity operators to shift loads.

The cost of building and maintaining high-voltage grids is high in mountainous regions, such as those found in Nepal. If we look at other countries that are higher above sea level, such as Switzerland and Austria, we see that the cost of building and maintaining such a power grid can be significantly higher than in the lowlands.

This problem can also be observed in other places. The southeastern edge of the Brazilian mountains is a good example in this regard. The southeastern edge of the Brazilian mountains is a rugged mountainous country that stretches along the southeastern coast of Brazil. This is a specific geographical area in Brazil. The southeastern mountainous rim of Brazil makes it difficult to develop the interior of the country. CAPEX and OPEX are higher, partly because the cost of transporting materials from one place to another is much higher. In the lowlands, it is easier to build power grids and connect them to urban areas. In the lowlands, you don’t have to rely only on the valleys to transport electricity. In the lowlands, you can develop electricity networks and deliver electricity in all directions. 


The energy sector of Nepal is of great importance for the development of the country. Hydropower is also important for the development of other countries on the country’s periphery. This is because hydropower affects the use of water resources as well as the availability of water resources for agricultural production. India relies on water resources from Nepal. Nepalese rivers flow into the Ganges river system: these river systems enable agricultural production in India. Other rivers, mainly from the northwestern part of India, also flow into the Ganges River system, but Nepal still remains a major contributor to the river system that transports nutrients, minerals and water into India and elsewhere. 

Nevertheless, hydropower has a high energy yield and is one of the most competitive forms of renewable energy. It depends on our point of view whether we consider hydropower as a form of renewable energy. 

Other aspects must be taken into account. Hydroelectric power plants are built to hold back water. Hydroelectric power plants retain water that cannot be made available to downstream locations. They alter the water table and the land downstream of the hydropower plant dries up. Many places in the Indian subcontinent may experience reduced rainfall and increased evaporation due to climate change. Further expansion of hydropower resources in the Himalayan region could affect the availability of water, leading to an increased risk of desertification in many places. However, this is difficult to say and this relies on numerous factors.

Another problem is the accumulation of sediment. The Himalayas bring significant sediment to the hydropower plant. This sediment accumulates, over the years, and eventually the hydropower dam needs maintenance. This results in high maintenance costs. 


Nepal can strengthen its position on energy issues through international cooperation. This may help Nepal to develop its own hydropower resources. This can be done by enabling cooperation with Nepal’s neighbors. One can also focus on other decentralized energy projects that have less impact on the environment and agricultural production further south. 

Due to Nepal’s high elevation above sea level, other decentralized energy solutions can make an impact to the success of the energy landscape. Solar systems are particularly useful in urban areas. How can these solar systems be implemented? One could use solar rooftop solar panels in Nepal. At higher elevations, the conversion of solar energy increases. This would somewhat reduce the need for a larger, area-wide power grid. Utilities must justify the cost of building these extensive power grids to provide constant power to end users. Unfortunately, the cost is often passed on to consumers, which would result in an increase in electricity prices. 


  • Nepal has a huge potential with regards to the production of hydropower. But this potential may need to be carefully managed. Cooperation with neighboring countries such as China and India may be needed to build new hydropower plants.
  • New hydropower plants may ensure domestic energy security. The use of these resources has to be economical. New hydropower plants must justify the cost of their construction. Any calculation estimating the overall cost of building hydropower plants must include the cost of connecting the hydropower plant to the power grid.
  • Hydropower plants often come at the expense of land use. This would be another cost that needs to be considered. This is a key issue. India plays a key role in all of this. Regional cooperation with countries like India can help ensure that these projects take into account the regional energy architecture.
  • Decentralized energy solutions become increasingly important for Nepal. Building a high-voltage grid and decentralized power grids is very expensive in mountainous countries like Nepal. This means that electricity prices for end users would have to rise to justify these costs.

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