KATHMANDU: Nepal's energy generation capacity has increased significantly during the last three years, from approximately 1,700 MW to 3,157 MW. This is a significant increase above the total installed capacity of 855.88 MW at the end of fiscal year 2014-15. The country's production capacity has increased by around 2,300 MW over the last eight years.

Hydropower facilities generate 95% of this capacity, with thermal plants producing 53 MW, solar energy producing 107 MW, and biomass producing 6 MW. The Nepal Electricity Authority (NEA) and its subsidiaries generate the remaining 1,900 MW of the 2,991 MW of hydropower capacity through private sector initiatives.

NEA Managing Director Kulman Ghising reported that the peak electricity demand in Nepal has reached 2,650 MW, a significant increase from the 40 MW demand five decades ago. The NEA has executed power purchase agreements (PPAs) for 10,300 MW to date, a substantial rise from the 2,800 MW agreements made eight years ago.

Hydroelectric projects with a combined capacity of 7,000 MW are now being developed, while another 10,000 MW or more are awaiting PPAs. Furthermore, the NEA has demanded PPAs for 800 MW of solar energy. By fiscal year 2028/29, the country's power production capacity is predicted to have risen to 10,000 MW.

Projects nearing completion include 270 MW led by the NEA’s Chilime Hydropower Company, with plans to start another 300 MW project. Construction has begun on several new projects, including the 42 MW Upper Modi A, 18.2 MW Upper Modi, 210 MW Chainpur Seti, and 99 MW Tamakoshi V. Additionally, financial closures have been completed for the 1,063 MW Upper Arun and 670 MW Dudhkoshi Storage Hydropower plants.