Nepal and India: Water and energy Security

    Gyanendra Lal Pradhan
    Engineer Gyanendra lal Pradhan,  Water Resource expert, Nepal

    Less than 3% of the earth’s total water is fresh. Water has become a scarce resource now. The U.N. Food and Agriculture Organization (FAO) predicted that a serious risk of water becoming a casus belli in some of the arid parts of the world as populations expand, economies grow, and the competition for limited water supplies intensifies. Nepal has water in abundance with an annual runoff of 224 billion cubic meter of water. About 70% of the waters in Nepal flow unregulated for four months of the year, to empty into salt seas in the Indian states and getting polluted adding up to a huge waste of this precious resource; In the context of rapid demographic growth, the importance of clean renewable power and clean water in the coming 10-30 years will be immense in the future (both at the domestic and regional front) which would need augmentation of the storage capacity for the available clean water. Water storage capacity of rivers of Nepal is over 225 billion cubic meters, which is astounding in the region.

    Because of the topography, Nepal and her southern neighbors would benefit immensely if this resource were harnessed in such a way that each of the cooperating countries could be in a win-win situation. In other words, if -the rivers flowing from Nepal were properly harnessed, they would make substantial contributions to the socio-economic development of not only the people of Nepal but hundreds of millions of people living in the Gangetic belts of India and Bangladesh, as well.

    Nepal and India enjoy an age-old relationship. Now, a new relationship has begun in the usage of clean water and hydro energy for the benefit of the region as a whole.

    Of all the engagements the two countries have to deal with, water resources and hydro energy are the most important for both the countries, which have not been able to ,achieve much till now. This is because water and hydropower is the most important natural resource that Nepal possesses, although most of it is yet to be exploited. With more than 6,000 rivers and rivulets in Nepal, as per Hydro Solutions’ estimates, the total hydropower potential of Nepal stands at around 200,000 MW against the popularly assumed, figure of 83000 MW if the Indian market is opened up. The northern part of the country has numerous projects with high heads, the mid hill region has potentials for medium sized projects and in the southern parts where 6,000 rivers merge to make the huge rivers like Mahakali, Karnali, Narayani and Koshi, there is a high possibility of generating hydropower through larger projects like Sapta Gandaki (600MW), Koshi High dam (3500MW), Pancheswor (6,400MW), Karnali Chisapani (10,800MW) and Sapta Koshi (3,500MW). This potential (one million GW hour of electricity) is adequate to meet the total domestic and part of regional energy demands for many years.

    Widening Trade deficit of Nepal with India:

    Overall trade dynamics of Nepal always leaves its most bold influence on Nepal’s trade balance with its largest trade partner, India.

    According to the latest report of Nepal Rastra Bank (NRB) on macroeconomic situation of the country, Nepal recorded a trade deficit of over 500 billion NPR (in July of 2013). Increasing imports of petroleum and cereals contributed highest to Nepal’s increasing payable to India. Nepal’s high dependence on imports from India has increased its trade vulnerability to a level of concern.

    As usual, petroleum continued to be the No 1 import item for Nepal. In 2012-13, Nepal imported petroleum products worth Rs 107 billion. Of the total imports of $6.2billion in FY2013, 19.6% was oil imports (($1,222.3 million).In US dollar terms this is equivalent to $ l.2 billion. higher thin ‘value of the Country’s total exports. :


    The electricity sector in India had an installed capacity of 225,793.10GW as of June 30, 2013, the world’s fifth largest. India generated 855 BU (855 000 MU i.e. 855 TWh) electricity during 2011—12 fiscal.

    As of January 2012, the per capita total consumption in India was 778 kWh. India currently suffers from a major shortage of electricity generation capacity, mainly in the fast growing states like UP and Bihar that are adjoining states to Nepal. The overall electrification rate in India is 64.5% while 35.5% of the population still lives without access to electricity.

    The I7th’electric power survey of India report claims:

    • The electrical energy demand for 2016—17 is expected to be at least 1392 Tera Watt Hours, with a peak electric demand of218 GW.

    • The electrical energy demand for 2016-17 is expected to be at least 1915 Tera Watt Hours, with a peak electric demand of 29 GW.

    India needs to add about 135 GW of power generation capacity, before 2017, to satisfy the projected demand after losses. McKinsey claims that India’s demand for electricity may cross 300 GW, earlier than most estimates. Four key reasons include:

    • India’s manufacturing sector is likely to grow faster than in the past.

    • Domestic demand will increase more rapidly as the quality of life for more Indians improve.

    • About 125,000 villages are likely to get connected to India’s electricity grid.

    • Currently blackouts and load shedding artificially suppresses demand; this demand will be sought as revenue potential by power distribution companies.

    If we analyze the India’s supply/demand situation, we  see that the surplus power in the east and northeast regions is not adequate to meet the gap in demand. There is acute power deficit in northern India. This deficit will put huge demand on oil and coal imports by India. Nepal’s hydroelectric Power can play a significant role to boost the economy of India. Nepal should establish transmission links with India as quickly as possible to cash in on the vast opportunity in the Indian market.

    Sources of Power in India:

    About 30% of India’s energy needs are met by petroleum. But some 80% of this oil is imported – the major factor behind the country’s ballooning trade and current account deficits. In the fiscal year ending March 2013, India’s net oil import was 2.6 million barrels per day (bpd), at Brent crude prices averaging $110 per barrel. Over the past decade, the more than five-fold rise in India’s net oil import bill enlarged its trade deficit, causing a deficit of 4.8% of its $1.8 trillion GDP. It is this data that hurt the rupee last summer and led some nervous foreign investors to pull their money out of the country.

    Energy is possible through different sources but clean energy alone ensures energy security and stability for the nation and the region alike.

    Paper presented by the author at a Nepal-India seminar held September 12, 2014, Kathmandu. 

    Source : Telegraphnepal