Power sector in 2030
While power generated domestically for the central grid is next to fully decarbonised, Nepal imports on average around 33% of the electricity from its neighbouring India, where the sector is still largely reliant on fossil fuels.- Power consumption thus remains somewhat carbon intensive, with approximately 25% of central grid consumption in 2021 relying on such imported fossil fuel-generated electricity.,
Increasing Nepal’s renewable energy capacity to 15 GW by 2030, as outlined in the country’s 2020 NDC,would replace electricity imports from Indian power plants and lead to further decarbonisation of power consumption within the upcoming decade. Nepal’s LTS envisions further increasing its renewable energy capacity to 53.2 GW by 2050 with the aim of electrification of major end-use sectors and trade of surplus clean energy.
In addition to increasing hydropower and renewable energy generation, such substantial change in the power sector requires holistic cross-sectoral policy packages, including those that upgrade the power transmission and distribution infrastructure.
Towards a fully decarbonised power sector
As envisioned in its NDC and LTS, with increasing domestic production of clean energy, Nepal can drive decarbonisation through electrification of its end-use sectors. Promoting electric transportation and cooking technologies as well as industries that run on this clean energy would significantly reduce fossil fuel usage and curb household biomass combustion.
Around 5% of Nepali households, mostly in remote areas, still do not have access to electricity. In other parts of the country, despite accessibility, reliability and quality of service remains low. To improve energy access and security and promote electrification of end-use sectors, the government will need to expand and improve grid accessibility and load capacity, invest in pumped and storage hydro, improve energy mix by establishing large scale solar and wind projects, promote standalone energy storage systems, increase affordability of electricity, and provide subsidies and tax incentives on clean technologies.,