Energy Options Assessment

The report evaluates Nepal's future energy options, finding that while hydropower remains central, integrating wind, solar, and battery storage can enhance system flexibility and support river conservation. Using the SWITCH model, the study demonstrates that strategic conservation of rivers, such as the Karnali basin, can be achieved with minimal impact on overall system costs. It also highlights the risks of relying solely on hydropower, noting that such a strategy increases costs by 10.7% and requires significant overbuilding of capacity to meet dry-season demand. The analysis further indicates that imports from India are critical for affordability, as eliminating them would increase system costs by approximately 45%. Additionally, the report explores regional equity and export strategies, suggesting that a diversified energy mix can support social goals and potential profitability if export prices exceed 30 $/MWh.

• In the reference scenario for 2040, hydropower provides 75%-80% of annual energy, with the remaining 20%-25% coming from wind energy and imports. Wind power is profitable from the start, growing to nearly 1 GW by 2040.
• River conservation in the Karnali basin can be implemented with very low cost; excluding all hydropower projects in the basin increases system costs by only 3.5% compared to the reference scenario.
• A strategy relying exclusively on hydropower is costly, increasing system costs by 10.7% over the reference case. This approach requires overbuilding capacity by 30%-70% to reliably meet peak demand during the dry season.
• Imports from India are essential for cost containment; eliminating imports entirely would result in system costs approximately 45% higher than the reference scenario, while limiting them to 10% of annual load increases costs by 17%.
• Implementing a Renewable Portfolio Standard (RPS) to meet 50% of energy needs with non-hydropower renewables by 2040 increases costs by 8.5%, though this drops to 2.6% if solar PV costs align with lower Indian market rates.
• An export strategy could be profitable if wholesale prices are above approximately 30 $/MWh. At 40 $/MWh, net costs for 50% and 100% export scenarios are 3% and 6% lower than the reference scenario, respectively, though this excludes transmission expansion costs estimated between $1.6 and $4.9 billion.
• Battery storage can substitute for the flexibility provided by peaking run-of-river (PROR) plants. Removing PROR flexibility increases costs by 4.4%, whereas removing battery storage only increases costs by 1.8%.
• High dependence on hydropower increases vulnerability to cost overruns. If investment is sunk, a 50% increase in hydropower costs raises system costs by 8% in the reference scenario and by 25% in the expansive hydropower scenario.
• Regional equity policies that require minimum installed capacity in each load zone have low cost impacts; a 50% equity requirement increases costs by only 2.4% and can reduce transmission costs by approximately 10%.

APA

WWF International (2020). Energy Options Assessment. https://www.worldwildlife.org/documents/799/35lxjui63u_USAID_Paani_Energy_Options_Assessment_Report_final.pdf

Chicago

WWF International. Energy Options Assessment. 2020. https://www.worldwildlife.org/documents/799/35lxjui63u_USAID_Paani_Energy_Options_Assessment_Report_final.pdf.

Wikipedia

{{cite report |author=WWF International |title=Energy Options Assessment |date=2020 |url=https://www.worldwildlife.org/documents/799/35lxjui63u_USAID_Paani_Energy_Options_Assessment_Report_final.pdf |access-date=23 October 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{wwfinternational2020energy, author = {{WWF International}}, title = {{Energy Options Assessment}}, institution = {WWF International}, year = {2020}, url = {https://www.worldwildlife.org/documents/799/35lxjui63u_USAID_Paani_Energy_Options_Assessment_Report_final.pdf}, urldate = {2026-10-23}, note = {Indexed by Climate Insights Directory} }