Which Is The Biggest Hydropower Of Nepal?

Nepal has tremendous hydropower potential, estimated at over 83,000 MW, due to its abundant water resources fed by the Himalayas. However, only about 1% of this potential has been developed so far. At the same time, Nepal faces a severe electricity shortage with only about 67% of the population having access to electricity.

To meet Nepal’s growing energy needs and achieve its ambitious goals to graduate from Least Developed Country status by 2022 and reach middle income status by 2030, large scale hydropower projects will be critical. The focus of this article is examining Nepal’s biggest hydropower projects currently under development.

Table of Contents

Karnali River

The Karnali River, located in western Nepal, is the longest river in the country stretching over 1,080 km. It originates at the Tibetan plateau near Lake Manasarovar and flows through steep gorges and valleys before joining the Ganges River in India (1). The Karnali has a very steep gradient, dropping over 2,000 meters from its origin to the Indian border, resulting in a high velocity flow (2). Its large discharge, averaging 1,080 cubic meters per second annually, comes from monsoon rainfalls as well as steady flows from Himalayan glacier meltwaters (3).

These features give the Karnali an enormous potential for generating hydropower in Nepal. With the steep gradients and high volume of water, dams along the Karnali have the capacity to produce large amounts of electricity. The river’s discharge also remains more consistent than other rivers that rely solely on monsoon rains. While some tributaries sees high variability between dry and rainy seasons, the Karnali maintains higher flows year-round from glacial sources (1). There are currently several large-scale hydropower projects at various stages of development on the Karnali and its tributaries, seeking to harness the river’s immense energy potential (2).

Sources:

(1) https://en.wikipedia.org/wiki/Karnali_River

(2) https://www.forbes.com/sites/jeffopperman/2023/09/07/the-scale-of-solutions-finding-balance-between-hydropower-and-rivers-in-nepal/

(3) https://kathmandupost.com/money/2018/04/05/hydro-projects-expected-to-improve-living-standards-in-karnali

Upper Karnali Project

The Upper Karnali Hydropower Project is located on the Karnali River in western Nepal. With a planned capacity of 900 MW, it will be the largest hydropower project in Nepal once completed.

The project site is located near Chisapani Village in Dailekh and Surkhet districts. The estimated cost of the Upper Karnali project is over USD 1.5 billion.

The developer of the Upper Karnali project is GMR Upper Karnali Hydropower Limited, which is a subsidiary of Indian infrastructure company GMR Group. GMR signed a Project Development Agreement with the Government of Nepal in 2008.

The project is currently under construction and is expected to be completed by 2025. Once operational, it is projected to generate over 3,000 GWh of electricity annually for Nepal’s national grid.

The Upper Karnali Hydropower Project involves constructing a 12 km headrace tunnel along with an underground powerhouse with four 225 MW Francis turbine units.

Arun 3 Project

The Arun 3 hydroelectric project is located on the Arun River in Sankhuwasabha District of Province 1 in eastern Nepal (Wikipedia). It has a planned capacity of 900 megawatts (MW) and an estimated cost of USD 1.04 billion. The developer of the project is SJVN Arun-3 Power Development Company (SAPDC), which is a subsidiary of Indian state-owned hydropower company SJVN Limited (NSEnergyBusiness).

The Arun 3 project will utilize a run-of-river design and consists of a 466 meter long and 70 meter high concrete gravity dam with four underground desilting chambers. It also includes a 12.2 km long headrace tunnel, four pressure shafts, and an underground powerhouse (NSEnergyBusiness). The project is currently under construction and is expected to be commissioned in 2023/2024 (SAPDC).

Upper Arun Project

The Upper Arun Hydroelectric Project is planned on the Arun River in eastern Nepal. With an installed capacity of 1,061 MW, it will be the largest hydropower project in the country once completed (World Bank, 2023).

The project site is located in Sankhuwasabha and Bhojpur districts in the Koshi zone of eastern Nepal. It involves constructing a 225-meter tall roller-compacted concrete dam and underground powerhouse on the Arun River (Power Technology, 2024).

The estimated cost of the Upper Arun project is $2.7 billion. It is being developed by SJVN Arun-3 Power Development Company Private Limited, a subsidiary of Indian state-owned hydropower company SJVN Limited. The project is currently in the planning and approval stages, with financial closure expected in 2025 (Kathmandu Post, 2023).

The World Bank has announced plans to provide up to $1 billion in financing for the Upper Arun project, which will be the bank’s first hydropower investment in Nepal since the 1990s. The project is expected to generate over 3,000 GWh of electricity annually for the integrated Nepali grid (World Bank, 2023).

Comparing the Projects

The three largest hydropower projects currently under development in Nepal are the Upper Karnali, Arun 3, and Budhi Gandaki projects. Here is a side-by-side comparison of some key statistics for each project:

Upper Karnali: 900 MW installed capacity, estimated annual production of 3,636 GWh. Total project cost estimated at $1.4 billion USD. Being developed by GMR Upper Karnali Hydropower Limited. Will utilize water from the Karnali River (http://santoshthapa123.blogspot.com/2018/01/budhigandaki-vs-upper-karnali-vs-arun-3.html).
Arun 3: 900 MW installed capacity, estimated annual production of 3,870 GWh. Total project cost estimated at $1.04 billion USD. Being developed by SJVN Arun 3 Power Development Company. Will utilize water from the Arun River (https://myrepublica.nagariknetwork.com/archive/26006/Arun-III-and-Upper-Karnali-developers-allowed-to-use-forest-land).
Budhi Gandaki: 1,200 MW installed capacity, estimated annual production of 4,180 GWh. Total project cost estimated at $2.5 billion USD. Being developed by Budhi Gandaki Hydroelectric Project. Will utilize water from the Budhi Gandaki River.

As you can see, the Arun 3 and Upper Karnali projects have roughly the same installed capacity and projected annual energy production. However, the Budhi Gandaki project has a significantly higher installed capacity and energy output. In terms of cost, the Arun 3 project is estimated to be the least expensive, followed by Upper Karnali and then Budhi Gandaki as the most expensive.

Challenges

Nepal faces several challenges in developing large-scale hydropower projects. One major challenge is the high seismic risk, as Nepal lies in an active earthquake zone. Constructing large dams in such terrain requires extensive geological and seismic studies, which adds to project costs and uncertainties (https://nepaleconomicforum.org/the-role-of-and-challenges-and-prospects-for-hydropower-development-in-nepals-energy-sector/). Deforestation caused by building access roads and transmission infrastructure is another concern. Large reservoir projects like Arun 3 and Upper Karnali also require resettlement of local communities, which can be contentious.

According to experts, flaws in policies and regulations have also hampered growth of hydropower in Nepal. Issues like lack of coordination between government agencies, problems in land acquisition and insufficient environmental impact assessments have delayed projects and discouraged investors (https://kathmandupost.com/columns/2022/06/16/problems-in-the-hydropower-sector). Addressing these challenges will be key for Nepal to tap its immense hydropower potential.

Benefits

Developing hydropower in Nepal provides significant benefits for the country’s economy and people. Some of the key benefits include:

Increased energy access – Nepal has a huge hydropower potential but only around 2% has been developed so far. Developing more hydropower can provide electricity access to the 25% of Nepalis who still lack it, supporting development.
Reduced load shedding – Hydropower development can reduce Nepal’s dependence on imported electricity and eliminate load shedding which above 8 hours daily in the past.

Higher GDP growth – Studies show developing 10,000 MW of hydropower could boost Nepal’s GDP growth to 8-10% per year. Hydropower exports also generate revenue.
Poverty reduction – Access to electricity raises productivity and incomes. Hydropower development’s contribution to GDP growth also reduces poverty significantly.
Employment opportunities – Large-scale projects create thousands of jobs during construction and hundreds in operation and maintenance.

In summary, hydropower development in Nepal can drive broader economic growth by increasing energy access and exports while reducing poverty. It is a key priority for the country’s development.

Conclusions

The Upper Karnali hydropower project, with a planned capacity of 900 MW, is the biggest hydropower project currently under development in Nepal. Located on the Karnali River in western Nepal, it has the potential to make a significant contribution to increasing Nepal’s electricity generation and reducing chronic power shortages.

However, experts recommend that Nepal pursue a mix of energy sources, including hydropower but also solar, wind and other renewables. Relying too heavily on hydropower carries risks, as output can fluctuate based on rainfall and water flows. A diversified energy portfolio can mitigate those risks. It will likely require utilizing the country’s hydropower potential at multiple river sites to fully meet electricity demand in a sustainable manner.

Further developing Nepal’s energy resources in an environmental and socially responsible way will bring substantial economic and quality of life benefits. But successfully doing so will require long-term planning, regulatory oversight, and targeted investments to expand grid infrastructure and connectivity.

References

The main sources used in the article were as follows:

Nepal Electricity Authority. “Major Hydropower Projects of Nepal.” https://www.nea.org.np/hydropower_projects

International Hydropower Association. “Hydropower Status Report.” https://www.hydropower.org
Ministry of Energy, Water Resources and Irrigation. “10 Year Hydropower Development Plan.” https://moewri.gov.np
Shrestha, R.M. “Challenges for Large Hydropower Projects in Nepal.” Journal of Hydroengineering. 2021.