Electricity Exports Are an Achievement, but Domestic Transformation Is the Real Test

Nepal’s earning of more than Rs 29.32 billion from electricity exports to India and Bangladesh in fiscal year 2082/83 is a significant achievement for the country’s energy sector. A nation once synonymous with prolonged power cuts is now exporting electricity to neighbouring markets. That transition is important. But it also raises a more fundamental question: how reliable, stable and sufficient is the electricity supply available to Nepal’s own citizens and industries?

The success of Nepal’s energy sector cannot be measured by export revenue alone. The country’s hydropower system remains heavily dependent on run-of-river projects, resulting in surplus generation during the monsoon and reduced output during the dry season, when electricity still has to be imported from India. Unless this structural imbalance is addressed, export figures will tell only part of the story.

The condition of the domestic distribution system is equally important. Consumers in Kathmandu and other urban and industrial areas continue to report voltage fluctuations, tripping, overloaded transformers and weaknesses in distribution infrastructure. Electricity availability and electricity quality are not the same thing. A short outage may inconvenience a household, but for an industry it can halt production, damage equipment and impose substantial financial costs.

Nepal’s energy policy must therefore move beyond a narrow focus on generation and exports. Reliable domestic supply and productive internal consumption should now become central priorities.

Increasing domestic electricity consumption is one of the most effective ways to transform the economy. Electric cooking can reduce dependence on imported liquefied petroleum gas. Electric vehicles can lower petroleum imports. Industries can substitute electricity for diesel and coal. Agriculture can use electricity for irrigation, processing and storage.

In this way, the value of hydropower extends far beyond the sale of electricity itself. It can reduce imports, lower production costs, create employment and generate additional economic value within the country.

Exporting surplus electricity during the monsoon is both necessary and practical. The Indian and Bangladeshi markets offer important strategic opportunities for Nepal’s hydropower sector, and regional electricity trade should continue to expand.

But exports and domestic consumption should not be treated as competing priorities. External markets should provide value for surplus generation, while domestic consumption should become the foundation of industrialisation and broader economic transformation.

This requires equal attention to transmission and distribution infrastructure. Generating more electricity will have limited impact if transmission lines, substations and local distribution systems cannot deliver that power safely and reliably to consumers.

Reservoir and semi-reservoir projects are equally important. Nepal must gradually reduce its excessive dependence on seasonal river flows. A system in which the country exports heavily during the rainy season but imports significant volumes during the dry season cannot be considered a permanent solution.

Energy security is not simply a question of how many megawatts are generated. It means that citizens can switch on electricity with confidence, industries can plan production without fear of disruption, and the country can meet its own energy needs when required.

Nepal has successfully opened an important first chapter by becoming an electricity exporter. The second chapter will be more difficult and more consequential: using that electricity to strengthen industry, transport, agriculture and household life.

Earning foreign currency by selling electricity is an achievement. Using electricity to expand the productive capacity of Nepal’s own economy would be an even greater one. That should now become the central objective of the country’s energy policy.