Energy in Nepal

Nepal is a country enclosed by land, situated between China and India. It has a total area of 148,006.67 square kilometers and a population of 29.16 million.^[1] It has a small economy, with a GDP of $42 billion in 2024, amounting to about 1% of South Asia and 0.04% of the World's GDP.

Nepal's total energy consumption in 2019/2020 was 14.464 million tons of oil equivalent, increased from 10.29 Mtoe in 2012.^[2] Electricity consumption was 3.57 TWh. The energy mix is dominated by traditional sources like firewood and agricultural residue (68.7%), most of this primary energy (about 80%) represents solid biofuels used in the residential sector (for heating, cooking etc.).^[2] Smaller shares of energy come from commercial sources like petroleum and coal (28.2%) and renewable sources.^[3] About 23% of the electricity is imported, with the rest almost completely supplied by hydroelectricity. Nepal also exports hydroelectricity to India in the wet season.

Nepal has no known major oil, gas, or coal reserves,^[4] and its position in the Himalayas makes it hard to reach remote communities. Consequently, in the absence of the energy grid reaching remote locations, most Nepali citizens have historically met their energy needs with biomass, human labor, imported kerosene, and/or traditional vertical axis water mills. Energy consumption per capita is thus low, at one-third the average for Asia as a whole and less than one-fifth of the world average.

The country has considerable hydroelectricity potential.^[5] The commercially viable potential is estimated at 44 GW from 66 hydropower sites.^[4]

In 2010, the electrification rate was only 53% (leaving 12.5 million people without electricity) and 76% depended on wood for cooking. With about 1 toe for every $1,000 of GDP, Nepal has the poorest energy intensity among all south Asian countries. The country has therefore very large energy efficiency potential.^[2]