Grid Interconnection of Micro-hydro Projects (MHPs) in Nepal

From energypedia


Fig 1: Daily energy use from MHP

Although 90.7% of the Nepalese population have access to the electricity, the power supply is highly intermittent with frequent power cuts (up to 12 hours per day).[1][2]There are two options for tackling this problem either a)connect new generation capacity to the grid or b) interconnect the existing Micro Hydro Power plants (MHPs) to form a larger local grid or connect directly to the national grid.

MHPs were first introduced in Nepal in the 1960s and since then they have been providing access to energy in the rural off-grid houses in Nepal. [2] Until 2018, more than 3000 MHPs with a generation capacity of 35 MW have been developed in Nepal.[3] It cost about NPR 17-25 per kWh for Nepal Electricity Authority (NEA)’s grid to deliver electricity in the rural hilly areas (depending on the distance) whereas it cost about NPR 9-15 per Kwh via a 50-100 kW MHP that is interconnected to the grid.[2] Therefore, it is more economically feasible for Nepal to interconnect the existing MHPs to the grid to solve its energy crisis.

There is also a lack of detailed demand assessment during the feasibility study phase of MHPs. The demand assessment is mostly driven by the government subsidy policy which allocates 200W per household for meeting the lighting load. This has resulted in both under-utilization and over-utilization of MHPs.[4]

The lack of productive activities in the rural areas have also resulted in under-utilization of the MHPs. As shown in Figure 2, during under-utilization, the loss of energy can be as high as 72%. Connecting to the grid can help to divert this extra energy via the national grid and reduce losses. Similarly, during under production, MHPs can also receive power from the grid.[5][6]

Grid Interconnection of MHPs

The first MHP, called Syaurebhumi was interconnection to the grid on 11th January 2018. This MHP has a capacity of 23kW and is located in the Sikre village of Nuwakot district. It delivers a total of 178,245 units of electricity annually. After this project, two more MHPs were connected to the national grid namely, Leguwa Khola MHP (40kW capacity) in Dhankutta district and Chimal MHP (capacity 90kW) in Taplejung district.[6]

Below is a list of the MHPs that are interconnected in Nepal.

Table 1: Interconnected MHP cluster in Nepal

Technology for Grid Interconnection

The interconnection technology used for MHP is different than that for large hydropower plants (typically of MW ranges). The large hydro projects use a governor system to balance frequency by regulating the flow of water, whereas in MHP, Electronic Load Controller (ELC) is used. There is a constant input of water to the MHP turbine unless adjusted by using a butterfly valve. The frequency balance is carried out through adjusting dummy load (also known as ballast load) and consumer load through switching of a thyristor. While MHP is interconnecting to the national grid, the ELC is deactivated. As soon as the MHP becomes islanded with the grid (in the event of any unusual fault), ELC again comes into action and divert the generated power to the grid. The Internal Rate of Return (IRR) with ELC is 20.85% while that with a governor is 13-28%. [6]

Figure 2: Using Electronic Load Controller (ELC) in MHPs

Policy Framework

  • Advocacy started in 2011
  • Decision to interconnect MHP of less than 100 kW capacity in July 2014 [7]
  • First PPA concluded in February 2016
  • First Interconnection completed in January 2018[8]

Impact of Grid Interconnection

  • As the NEA is expanding the grid connection in the rural areas, the existing MHPs have started to become redundant. As of 2015, 34 MHPs with a net capacity of 1 MW have been affected and 56 MHPs with a net capacity of 1.7 MW could be affected by the grid extension. Therefore, interconnecting the MHPs to the grid helps to solve this problem and the community can also generate revenue by selling the surplus electricity (figure 2).[2]
  • The voltage of the feeder line increases, and thus enhances the power quality of the feeder line.
  • Distributed generation helps to minimize the power loss during transmission and distribution by reducing the distance as power is supplied near the load center.
  • Plant load factor increased significantly and therefore increases the economic sustainability of the MHP. [4][8]

Challenges for Grid Interconnection

  • Simple connectivity – instead of a complicated equipment , a simple and compact equipment is needed.
  • For the long-term sustainability of MHPs, the private sector needs to be involved. The private sector can then be responsible for the regular maintenance of the MHPs.
  • Grid interconnecting is expensive and therefore, a subsidy is required until the technology is readily available in the Nepalese market
  • Distribution Grid Code – Code for connectivity
  • New Financing models such as power Exchange Agreement (PEA) is required
  • Moving analog to digital ELC with Droop characteristics[8]


Interconnection of MHPs represents a great potential for Nepal to solve its energy crisis. However, it is costly and requires additional subsidies form the government to do so. It also requires a coordination between the different parties such as the NEA, Alternative Renewable Energy Center (AEPC) and the target communities.

Further Information


This article is inspired by the continued work of the Hydro Empowerment Network (HPNET). Most of the content has been provided by HPNET member, Jiwan Kumar Mallik from Nepal. Contact @ or

  1. “Access to electricity (% of population) | Data.” [Online]. Available: [Accessed: 07-Aug-2018].
  2. 2.0 2.1 2.2 2.3 “Nepal - Scaling up Electricity Access through Mini and Micro Hydropower Applications | ESMAP.” [Online]. Available: [Accessed: 07-Aug-2018].
  3. “impact of practice-to-policy dialogue: nepal’s first grid interconnected micro hydro project,” Hydro Empowerment Network. [Online]. Available: [Accessed: 07-Aug-2018]
  4. 4.0 4.1 B. Shakya, A. Bruce, and I. MacGill, “Micro Hydro Interconnected Mini Grids in Nepal: Potential and Pitfalls,” p. 13.
  5. [5] “Frequently Asked Questions- Grid Interconnection of Micro Hydro Plants | LinkedIn.” [Online]. Available: [Accessed: 08-Aug-2018].
  6. 6.0 6.1 6.2 [10] Jiwan Kumar Mallik Renewable Energy for Rural Livelihood (RERL), Nepal.
  7. “Nepal - Scaling up Electricity Access through Mini and Micro Hydropower Applications | ESMAP.” [Online]. Available: [Accessed: 07-Aug-2018]
  8. 8.0 8.1 8.2 Jiwan Kumar Mallik Renewable Energy for Rural Livelihood (RERL), Nepal.