Nepal is entering another monsoon season with a familiar problem in its power sector: the country will generate a large volume of electricity but waste a significant share of it. During the peak monsoon months this year, leaked or unused power could rise to around 1,200 MW. The primary reason for this massive wastage is the failure of authorities to develop transmission lines and distribution systems at the same pace as power generation. Nepal now has close to 4,000 MW of installed capacity, but delays in building transmission lines, forest clearance hurdles, land compensation disputes, and weak coordination between the Nepal Electricity Authority and private developers have resulted in much of this power going unused. What makes the situation harder to accept is that Nepal is already exporting electricity. Power sales to India and Bangladesh have generated more than Rs 18 billion in revenue. Even so, during the monsoon season, 700 to 800 MW of electricity is wasted every day. While domestic demand declines during this period, limited internal and cross-border transmission capacity constrains supply.
Energy experts say electricity currently contributes about 15 percent to GDP and could contribute far more if power were smoothly transmitted from project sites to households, industries, and export markets. The real issue is neither water availability nor generation capacity—it is the grid. Over the past decade, hydropower construction has accelerated, while transmission line development has lagged behind. Ironically, many hydropower projects were completed before the grid was ready to carry their output. Smaller projects, particularly those below 10 MW, have been hit the hardest. Many are fully operational but are frequently asked to halt production when transmission lines become congested, reflecting poor planning. When electricity cannot be evacuated, the financial viability of these projects suffers severely. Poor planning is also evident in transmission line capacity. In several locations, 132 kV or 220 kV lines were built where 400 kV lines were clearly required. The Dordi and Marsyangdi corridors illustrate how such decisions create bottlenecks. Retrofitting these systems later is costly, time-consuming, and disruptive, fuelling frustration across the energy sector.
Best still to come from World Cup favourites after shocks galor...
Cross-border transmission has also faced delays. India–Nepal transmission lines funded by the Millennium Challenge Corporation offer a practical solution. Once completed, they could significantly increase export capacity and ease pressure on the domestic grid. Other transmission projects under construction across major corridors and river basins could also help convert surplus electricity into substantial revenue—but only if completed on time. Delays are not limited to approvals for transmission lines. Domestic manufacturers of transmission towers face policy constraints as well. High taxes on raw materials make local production expensive, even as the government speaks of strengthening domestic capacity. When tower production slows, transmission projects stall, harming the entire energy sector. The government has set a target of producing 10,000 MW within five years. This goal will remain unattainable if transmission expansion continues to lag. Electricity that cannot reach consumers or export markets yields no return. Transmission lines must therefore be treated as priority infrastructure. To expedite expansion, forest clearance processes need to be streamlined and compensation disputes resolved promptly. Transmission capacity must align with generation plans from the outset, and all ongoing projects must be completed on schedule. Every unit of electricity wasted during the monsoon represents lost income. Nepal has sufficient water resources and power plants—but without adequate transmission capacity and speed, surplus power will continue to go to waste, raising serious questions about institutional commitment to a reliable national grid.
