But because of various issues-mainly technical difficulties and lack of stable government; Nepal;s hydro-power potential remains under utilized.
For last couple of years, Nepal has been facing acute energy shortage, forcing the state run Nepal Electricity Authority (NEA) to resort to frequent power cuts to stretch out the limited supply. The country imports all its oil and natural gas through neighboring India. State run Nepal Oil Corporation (NOC) is the agency responsible for handling the imports and distributing oil through local dealers. NOC is chronically corrupt and mismanaged institution operating under huge losses-even if it has no competition when it comes to importing oil and natural gas into Nepal.
Developing local energy sources and investing alternative energy is the only way for Nepal to be energy independent and fill the energy deficit.
Bio gas projects and have produced some success in villages in various parts of the country. But solar remains by far the most promising one.
Southern Nepal could be the place for harnessing projects in Nepal; as the region gets plenty of sunlight and is mostly flat terrain-making it easier to install energy distribution infrastructure. As Southern Nepal is developed as solar energy focal point, there is also a possibility to push for energy independence at the local level. Installing solar panels on roof tops, encouraging green building designs and also providing deep discounts on could bring more people to join in
Nepal's private sector and also the government has made encouraging strides on developing alternative energy sources in the country.
Alternative Energy Promotion Centre (AEPC) is a "Government institution established on November 3, 1996 under the then Ministry of Science and Technology with the objective of developing and promoting renewable/alternative in Nepal. Currently, it is under Ministry of Environment. It functions independently, and has a nine member board with representatives from government sector, industry sector and non-governmental organizations." AEPC's projects include-developing small scale hydro-power plants, solar,wind and biomass energy, geothermal energy and also improved water mills.
Number of international donor agencies support AEPC's efforts ,including the USAID and the Asian Development Bank(ADB).
In the private sector, there are numerous projects focused on developing alternative energy sources in Nepal. Here is a short list, which by no means is complete:
Renewable Nepal and Pvt.Ltd.
The Project (REP) (joint effort of the European Union and the Government of Nepal)
Embassy of Denmark in Nepal also has alternative energy development project, along with UNDP and the Norwegian Agency for Development Cooperation.
Energy deficient developing nations can provide a huge boost to their economy and also improve standard of living by investing in alternative and . Nepal has made some progress in being energy independent, but here is still a long way ahead.