Nepal is considering reducing power tariffs in the coming weeks to avoid a potential wastage of the power generating capacity as the country is on the verge of being an energy surplus state. This is seen as a remarkable achievement for a South Asian nation as Nepal, between 2007 and 2017, had gone through a massive electricity shortage, resulting in power outages of up to 18 hours a day. And, in turn, the shortage crippled the country’s growth potential.  

Nepal's peak demand for power was 1400 MW last year while the total installed capacity of the power projects was 1369 MW during the first half of the current 2020-21 fiscal year, according to the Nepal Electricity Authority. However, with the addition of the 456MW Upper Tamakoshi Hydropower Project to the national grid, the country will have surplus power. 

The government would prioritize increasing the domestic consumption of electricity by offering power at lower prices, Energy Minister Pampha Bhusal was quoted as saying by The Kathmandu Post. 

The government expects to have a surplus during rainy seasons. If the country is unable to increase domestic consumption or export excess power, the electricity will be wasted.

The surplus energy should be exported, the minister said, adding her priority, for now, will be to increase domestic consumption from a strategic point of view. The government, she said, may provide free electricity to people living below the poverty line or reduce power tariffs for industries. The latter has been a longstanding demand of the industry.

“Boosting domestic consumption with increased use of electricity in kitchen and industries, and promoting electric vehicles are other measures for increasing the domestic use of electricity,” she said.

The World Bank, in one of its reports, estimated that a reliable power supply would have increased the country's annual gross domestic product by almost 7 percent while annual investment would have been 48 percent higher.

(SAM)