1. Load Shedding in Nepal
Nepal is being ravaged by the electricity crisis. The electricity supply and supply capacity is less
as compared to their respective demand. In 2008, Nepal Government declared National
Electricity Crisis in our country
There was no load shedding through till 2005. Nepal faced the problem of flood in the first week
of August 2008.This severely affected communication network and infrastructure including road
network. NEA used to point out the shortage of water in rivers whenever it came up with a load
shedding schedule, but even in such abundance NEA imposed a load shedding of 2 hours each
day, two days a week. With effect from 27th August, 2008 the load shedding hours was
increased to 16.5 hours/week.
In Nepal, traditional sources like firewood, animal residue, agriculture residue meet bulk of total
energy with an 85% while very few requirements is met by hydroelectricity which is 2.04% as in
2007/08 as suggested by the diagram below:
Figure: Energy consumption in 2007/08

2. Nepal can generate 83,000 Mega Watts of electricity of which 42,000 MW is commercially
viable capacity. Currently, electricity demand during peak time is around 1000 MW, but supply
is hardly 700 MW during summer and 400MW during winter, which includes total NEA
production from hydro and thermal, purchase from the private sector, and import from India. Of
the total availability, NEA supplies 55 per cent, private sector contributes 27 per cent, and 18 per
cent is imported from India.
The chart below shows the total supply of electricity from 2001-2011.
Figure: Supply side of electricity
NEA experienced a good increment in the no. of consumers from 062/063-065/066 which
accounts to 1.6 million i.e. 25% increment. However, the production side almost remained
stagnant with just 1.3% (7.85 MW) power addition during the same period. This led to huge
pressure in smooth supply of power during the period.
While demand increases by around 100MW every year, electricity production is almost
stagnant. The inadequate supply of electricity in turn will force the firms to depend on petroleum
products. Indeed, most losses of Nepal Oil Corporation is attributed to the shortage of electricity
supply i.e. consumption doubled between 2007-08 and 2010-11 to power up the factories and
offices. This will increase the cost of production and erode competitiveness of Nepali goods and
services since cost of domestic goods might be higher imported goods. This shows how
electricity crisis can indirectly affect other economic sectors.

3. Demand and supply side of Electricity
Table: Demand and supply forecast (08/09-011/012)
The above table shows the demand and supply forecast made by one of the officials of NEA. The
actual demand and supply of electricity during the particular period were almost similar to the
forecast made. In order to address the problem of mismatches in demand and supply of
electricity, NEA responded with power cuts, in other words load shedding.
Causes of Electricity Crisis
Monopoly of NEA: Production, transmission and even distribution of electricity is the sole
responsibility of NEA. Private sectors participation in the production is very rare. Only few
requirements of electricity are made through imports from India and private sectors.
Inadequate private investment: There is inadequate private investment in production of
electricity. It is why the resource in the private sector needs to be channelized in the productive
sectors including hydroelectricity. Only about 25% of the total installed capacity is carried by
national and international private sector.
Underproduction and lack of timely maintenance: Most hydro-electricity has never attempted
to generate power at its claimed installed capacity. Frequent breakdown of sub-systems and low
generation due to inefficient appliances are collective cause of the crisis.
Seasonal supply variation: During the winter season, the volume of water in the river declines
drastically. This will led to decline in the generation of power as well. This reduction in power
generation puts heavy pressure to manage demand during the period. The water reservoir of
Kulekhani supports only 46 MW of electricity while dry rivers support only 230 MW.

4. Others: Other reasons for the energy crisis are supply lag over demand and resources deficit.
Supply shortfall over the demand of consumer is the immediate cause of present load shedding.
Demand has inclined sharply in the few past years due to urbanization. The annual demand of
electricity is around 9.3%. In addition, at present demand exceeds over 808 MW.
Effects of Load Shedding on Imports
Due to increasing load shedding in the country since past many years, people have started relying
on alternative sources of energy such as solar power, torch lights, candles, gasoline, firewood,
coals, agriculture and animal residue. There has been significant increase in the imports of
products like batteries, generators, torch lights, inverters, and other varieties of lights from China
and India. Batteries, generators, inverters are usually imported from India while rest of the
products like torch lights and other small led lights are imported from China. This has
significantly boosted the business of small footpath sellers selling such products. The Chinese
products are attractive to the people as they ensure both quality and low prices.
Such alternative sources of energy have helped people to meet their need of energy to a great
extend. The use of alternate sources of energy like batteries, invertors and generators helps to
increase the supply of electricity available to them. This increase in supply is attributed to an
individual/consumer own effort and is not attributable to NEA.
Conclusion:
The government of Nepal launches various strategies to reduce load shedding and makes
various decisions to start hydro power projects, thermal plants etc. However, government
always lacks on the implementation part. Even with the proper planning, it takes several years
to develop necessary infrastructures for power generation and transmission. With Nepal’s never
ending political situation, NEA plans to reduce power shortages may take few more years than
anticipated. Excessive politicization of the hydro sector and inefficiencies within NEA has been
the two biggest hurdles so far. Unless, new investment are encouraged to enter in the, the outlook
remains the same.
Following are some of the ways to cope with the problem of electricity crisis in our country:
 Harvesting solar power and using other alternative sources
 Encouraging public- private partnership to address the resource deficiencies.
 Political commitment
 Infrastructure development such as proper road access and transmission line
 Control electricity leakages and prevent transmission losses.