Key facts
- Nepal's electricity generation is almost entirely dependent on hydropower.
- Recent floods destroyed 12 hydropower plants, impacting over 10% of the nation's power capacity.
- Over 1,300 people died in the floods, with thousands still missing.
- Experts are calling for Nepal to diversify its energy sources beyond hydropower, including solar and wind.
- International lenders are facing criticism for investing in high-risk hydropower projects.
- Rising insurance premiums are making hydropower operations financially challenging for private operators.
Nepal's heavy reliance on hydropower has been exposed as a significant vulnerability following devastating floods that destroyed numerous power plants and caused widespread fatalities. The nation, which previously struggled with power outages but achieved 24-hour supply by 2018 through hydropower expansion, now faces a critical challenge as over 10% of its generation capacity has been wiped out.
The recent floods, which killed over 1,300 people and left thousands missing, severely damaged 12 hydropower facilities in the Trishuli River basin. Operators are uncertain about the repairability of these plants. While the state-owned Nepal Electricity Authority has assured the public of adequate supply, officials acknowledge the need for a policy rethink due to increasing climate-related disasters.
Experts and industry figures are urging Nepal to diversify its energy sources, advocating for the serious adoption of solar and wind power to enhance resilience against single-point system failures. They argue that an over-reliance on hydropower, despite its competitive advantage in the region, is too risky in the current climate. Some reports suggest Nepal's solar potential is significantly larger than its hydropower capacity.
International lenders, including the Asian Development Bank and China's Export-Import Bank, are facing scrutiny for their investments in projects like the Upper Trishuli-1 and Upper Trishuli 3A, which were heavily damaged. Critics argue these lenders were aware of the extreme dangers but failed to demand stringent preventive measures. The historical volatility of the Trishuli River basin, with previous floods in recent years, further underscores these concerns.
Private hydropower operators are already experiencing financial strain, with rising insurance premiums making business unfeasible. The disaster highlights the interconnected nature of climate risks, with calls for international cooperation in data sharing, impact assessment, and the development of early-warning systems.