Chapter-1

Introduction to Hydropower
Development

Presented By: [Link] Adhikari

Lumbini Engineering College
 Content
1.1 Energy Sources, Hydropower Development in a context; Storage and
ROR plants
1.2 History of Hydropower Development in the world and Nepal
1.3 Status of Hydro-Projects in Nepal and future trends, Hydro-Potential
1.4 Hydropower Development Policies of Nepal
1.5 Nepal Hydropower Guidelines
1.6 Cross-border power trade and future energy security, Water Treaties
1.7 Stakeholders in Hydro-Development, Role of Private sector Participation
and Nepal Electricity Authority, other government agencies for Hydropower
development, PPA
 Sources of Energy
The sun is the main source of energy on Earth. Other energy
sources include coal, geothermal energy, wind energy, biomass,
petrol, nuclear energy, and many more.
Energy is classified into various types based on sustainability
as renewable sources of energy and non-renewable sources of
energy.
1. Renewable source of energy:
 Energy which is continuously produced by nature and cannot
be exhausted is called renewable source of energy.
The main example of renewable source of energy are Solar
energy, wind energy, hydro power , geothermal energy , bio-
mass and tidal energy .
2. Non -Renewable source of energy:
Energy which have been stored in nature for millions of years
and cannot be replaced quickly if exhausted are called non-
renewable sources of energy.
The main example of non- renewable source of energy are
coal, natural gases, petroleum and nuclear energy.
 What is Hydropower ?
Hydropower is a type of renewable energy that uses the power of water flows to
generate electricity. The energy that is generated by hydropower plants is clean,
reliable, and sustainable, making it a relevant low-carbon alternative to fossil
fuels in the fight against climate change.
To produce hydropower, the kinetic energy of flowing or falling water is
transformed into electrical energy by using a generator. In simple terms, this
means that moving water causes turbines to spin, which generates power.
Flowing water has three energy heads . They are pressure head, potential head
and kinetic head.
E= +z+
 Run-off- River (RoR) Hydropower Plant
Run-of-River projects utilize the natural flow of the river with little or no storage.
Water is diverted from the river through an intake, passed via a headrace tunnel or
canal to the powerhouse, and then returned to the river.
 It may have following three possible layouts:
 ROR project with canal system
 ROR project with pipe option
 ROR project with tunnel option
Keeping the considerations during peak hours, ROR plants may be constructed with
pondage, which can regulate daily hydrograph or weekly hydrograph and store water
(full or partial) to run the plant under full capacity is called PROR plant.
Main Features:
Small or no reservoir (only daily pondage).
Generation depends on river flow—higher in wet season, lower in dry season.
Environmentally less disturbing.
Shorter construction time and lower cost compared to storage projects.
Example : Upper Marshyangdi, Sunkoshi
 Storage Hydropower Plant
Those plants which can regulate the hydrograph of river by one or more seasons, are
usually known as storage plants. Such plants are located in non-perennial rivers. A
dam is constructed across the river that creates a large reservoir in front of it. It may
be of following types:
a. Storage project with powerhouse at dam toe
b. Storage project with powerhouse at certain distance d/s of dam

The storage project may be of seasonal storage, annual storage, and pumped storage
based on regulation of water. Pumped storage plants use excess electricity during
periods of low demand to pump water from a lower reservoir to an upper reservoir.
Then, during periods of high electricity demand, the stored water is released from the
upper reservoir to the lower reservoir, generating electricity in the process.
Example : Kulekhani I and II
 History of hydropower development in Nepal
1. Historical background :
 First hydropower plant, pharping hydropower plant (500KW) in 1911 AD.
 It was constructed to supply electricity to Singh Durbar and Rana Family houses.
 It took almost three decades before 640 KW Sundaraijal plant came into operation .,
followed by 2400KW Khopari plant that was commissioned in 1965.
 In 1989, total installed capacity reached about 250MW after successive plants
Kulekhani , Trishuli , Marsyangdi, Sunkoshi etc.
 In 1996, first tunneling 500KW hydropower project in Tinau River at Butwal was
commissioned through Butwal Company ltd.
History of hydropower development in world
More than 2000 years ago, Greeks used water to turn water wheels for
grinding wheat into flour.
In 20th century, water power is used for generating electricity.
The world's first hydroelectric power station was installed in 1882 in Appleton,
Wisconsin, USA, with a capacity of about 12.5 kilowatts (kW).
In 1936, hydropower plant established in Hoover dam, on the Colorado river
produces 704 MW of power and upgraded with 2080MW in 1960 AD.
Large Hydropower Plant in World
 Status of Hydropower Project in Nepal
Total Capacity from 178 Hydropower projects (above 1MW)= 3498.174MW.
Total Capacity from 18 Hydropower projects (below 1MW)=14.222MW
Other than Hydropower Project
Thermal Power from 2 projects =53.41MW
( Morang-39MW and Makwanpur-14.41MW)
Solar Energy from 25 projects = 141.74 MW
Co-generation from 2 Project = 6 MW
(Everest Co-generation and Electricity Project= 3MW and Indushankar
Cogeneration and Transmission Project = 3MW)
 Hydropower Potential in Nepal
Suitable topographical and geological condition, abundant water from Himalayas
and monsoon water offers tremendous energy potential for hydropower
generation in Nepal. There are three types of Hydropower potential which are as
follows.
1. Gross Potential (Theoretical) :
It is the power potential of all the surface flow of water( i.e. theoretical power
possible to generate ).
The major river basins are Koshi, Gandaki, Karnali and Mahakali. The total
power in the river basin can be calculated by using the following relation.
 P= Σ η γ Q H
100
Were, γ = Specific wt. of water (9.81KN/m3 )
η =overall efficiency
Q= discharge (m3 /s)
H=Total Head (m)
P= Power (KW)
The estimated gross potential of Nepal is 83000MW .
 2. Technical Potential
It is the part of gross potential, which can be utilized with the help of
construction of HP stations ( i.e. the power which is technically feasible).
All the theoretically possible power in nature can’t be produced due to
various constraints like unfavorable geology, topography, climate conditions,
accessibility, etc.
The technical potential of Nepal is 44000MW.
3. Economic Potential
It is the part of technical potential use of which is economically effective
with the consideration of fuel power, balance of region, multi-purpose
utilization of water resources and preserving ecological balance.
The projects are usually considered economically feasible if, IRR >
Prevailing interest rate , B/C > 1
• The economic potential of Nepal is 42000MW.
Hydropower Development Policy,2001
 With an aim of developing nation’s vast hydropower potential to meet
electricity need of the country and to generate export revenue, G.N
approved a new “Hydropower Development Policy,2058 (2001AD) on 15
October 2001.
 It attempts to make hydropower development procedures simple, clear ,
investment friendly and transparent for domestic as well as export purpose.
 Objectives
 To utilize the existing water resources of the country and to produce electricity
at a low cost.
 To ensure dependable , reliable and quantity electricity services within the
country at a reasonable rate.
 To tie-up electrification with the economic activities .
 To extend rural electrification to support rural economic development and
 To develop hydropower as an exportable commodity.
 Key Features
 Arrangement has been made to attract private sector investment in hydropower sector.
 Concept of integrated water resources development and multipurpose projects are
recognized.
 Role of hydropower in rural electrification has been considered. Rural electrification
fund to be set up 1% of royalty received from hydropower generation to be contributed
to the fund.
 Detailed procedures and arrangement made for granting licenses, production,
transmission and distribution. Survey license is granted for 5 years and generation
license is provided for 30 years and 35 years for export oriented and domestic
consumption-oriented project respectively. For storage projects, license can be
extended up to 5 years. No license required to generate hydropower up to 1MW.
 Incentives to motivate hydropower production for domestic consumption (less royalty,
longer expiration period of license i.e. 35 years etc.
 Royalty structures set and formulated. Royalty structure are higher for export-oriented
projects compared to domestic consumption.
Cross Boarder Energy Trade (CBET)
 Cross-border power trade is the exchange of electricity between two or more
neighboring countries through interconnected transmission lines. It allows
one country to export surplus electricity and another to import power when
needed, improving reliability, energy security, and regional cooperation.
 Nepal has CBET with India and Bangladesh.
 As per the tripartite agreement, executed recently in October 2024 with
Nepal’s National Electricity Authority (NEA), the Bangladesh Power
Development Board (BPDB) and India’s NTPC Vidyut Vyapar Nigam
Limited (NVVN), Nepal will export surplus electricity to Bangladesh during
the rainy season, from June 15 to November 15 each year, leveraging India’s
transmission grid.
 Future Energy Security and Water Treaties
 Future energy security is the ability of a nation or region to provide its
population with affordable, reliable, and environmentally friendly energy,
while also ensuring long-term investment and a transition to a sustainable
system.
 A water treaty is a formal agreement between two or more countries that
share a transboundary river basin, lake, or groundwater system . These treaties
establish the legal and political framework for managing and sharing these
resources, often addressing issues like water allocation, flood control, hydropower
generation, and environmental protection.
 For Nepal, an upstream country rich in water resources, the most significant water
treaties have been signed with its downstream neighbor, India. For e.g., Koshi
Agreement, Gandak Agreement, Mahakali Agreement.
Stakeholder in Hydropower Development in Nepal

The list of major institutions involved in Nepal are :

1. Ministry of Energy (MoEn)
 Former Minister of Water Resources divided into Minister of energy and
Ministry of Irrigation.
 The Ministry of Energy is the line ministry with prime jurisdiction and
authority over the hydropower sector .
 Responsible for development and protection of Nepal’s water resources
 The Minster of Energy have been the chairman of NEA Board of Director.
2. Water and Energy Commission and its Secretariat (WEC/WECS)
 Established in 1975 AD to assist government to formulate policies and
strategies for water resources and energy sector.
 Analyzing Bilateral and Multilateral Projects
 Reviewing multipurpose large and medium projects
3. Electricity Tariff Fixation Commission (ETFC)
 Formed in 1994 under Electricity Act,1993
 Review on electricity tariff level
 Fixation of tariff structure
 Fixation of charges for all consumers
4. Department of Electricity Development (DoED)
 (DoED) was established on 1993AD under the Ministry of Water Resources.
 Study and development of multipurpose, bilateral and major hydropower
projects
 Promotion and development of private investment in power sector including
licensing.
 Preparation of standards for transmission and distribution of electricity and
inspection and monitoring for its compliance.

5. Nepal electricity Authority (NEA)

 NEA established under the “ Nepal Electricity Act,1984”
 NEA is responsible for most of the generation, dispatch, transmission and
distribution of electricity of electricity in the country.
 It carries out system planning studies, including demand forecasting and
generation planning.
6. Private Sector :
 After the first hydropower development policy was formulated and made
effective in 1992, private sector has become an important player in hydropower
development in Nepal.
a. IPPAN (Independent Power Producer Association of Nepal)
b. NMHDA (Nepal Micro Hydro Development Association)
 Role of Private sector Participation and Nepal Electricity Authority,
other government agencies for Hydropower development

Role of Private sector Participation for Hydropower development

a) Mobilization of large investment.
b) Faster project development.
c) Use of modern technology and expertise.
d) Major contribution to national hydropower capacity.
e) Increased national energy security.
f) Promotion of electricity export.
g) Employment generation.
h) Strengthening of PPP model.
i) Contribution to government revenue.
j) Project transfer to government after license expiry.
 Role of Private sector Participation and Nepal Electricity Authority,
other government agencies for Hydropower development

Role of NEA for Hydropower development

a) Planning and development of hydropower projects.
b) Construction and operation of generation plants.
c) Expansion and management of transmission lines.
d) Power distribution across the country.
e) Power Purchase Agreements (PPA) with private developers.
f) Grid connectivity and system operation.
g) Ensuring reliable and stable electricity supply.
h) Investment in large and strategic hydropower projects.
i) Promotion of energy export to India and Bangladesh.
j) Implementation of government energy policies and targets.
 Role of Private sector Participation and Nepal Electricity Authority,
other government agencies for Hydropower development

Role of other government agencies for Hydropower development

a) Formulation of national energy and hydropower policies.
b) Approval and coordination of major hydropower programs.
c) Long-term water and energy resource planning.
d) Preparation of hydropower and river basin master plans.
e) Technical research and advisory support to the government.
f) Regulation and determination of electricity tariff rates.
g) Ensuring fair tariff structures for consumers and developers.
h) Issuance of survey and generation licenses.
i) Monitoring and regulation of hydropower project progress.
j) Promotion of private sector participation and compliance with hydropower
laws.
 Power Purchase Agreement (PPA)
 Power Purchase Agreements (PPAs) are long-term contracts between energy
buyers and sellers, primarily used to secure renewable energy at a fixed price,
providing stability and supporting new energy projects.

 NEA BOARD DECISIONS ON THE POWER PURCHASE RATES AND

ASSOCIATED RULES FOR PPA OF ROR/PROR/STORAGE PROJECTS
EFFECTIVE FROM 2074/01/14 (April 27, 2017) –Study this
Opportunities of HP development in Nepal
The opportunities of hydropower development in Nepal have
been listed as follows.
 Abundant Water resources and huge hydropower potential
available.
 Topographical aspect: high head available within short river
length.
 Geographical aspects : Perennial rivers originating from
Himalayas.
 Interest on foreign investors
 High demand in local and regional market
 Environment risk free after construction.
 Challenges in hydropower development in Nepal
The main challenges in hydropower development in Nepal have been
listed as follows.
Improving power system planning
Increasing access to electrification in rural areas
Raising the needed investments for hydropower development
Institutional strengthening of agencies involved in the power sector
Promoting power exchange and export
Reducing the cost of Hydropower development.
Political instability, poor governance and government interference.
Difficulty terrains and isolated load centre.