Almost 100% of Nepal's electricity comes from hydropower. This production capacity is so much that Nepal earns about 200 million dollars every year by selling electricity to India and Bangladesh.
But the glaciers and mountains that have given Nepal this natural bounty are now vulnerable to global warming – and last Wednesday's (26 August) devastating floods highlighted the risks to the country's hydropower ambitions.
More than 1,300 people died in this disaster, while thousands are still missing.
Entire villages were washed away near the Nepal-Tibet border. Twelve hydropower plants in the Trishuli river basin were badly damaged and knocked out more than 10% of Nepal's total power generation capacity.
Plant operators told the BBC that they do not yet know whether any of these plants will be able to restart.
Six of these 12 plants belong to the government-owned Nepal Electricity Authority (NEA). He has assured domestic consumers that there will be no interruption in supply at present.
But its spokesperson Rajan Dhakal admitted that as climate-induced disasters continue to increase, "it is time to rethink our hydropower policy."
By 2010, only two-thirds of the population in Nepal had access to electricity. And in these houses too there was power cut for 16 hours every day.
The situation changed by 2018, along with efforts to curb corruption and increase electricity imports from India to meet seasonal shortages, as well as expansion of hydropower infrastructure. By that time most parts of Nepal started getting 24 hours electricity.
According to Nepal Electricity Authority, currently there are 225 hydropower plants in Nepal, whose total installed capacity is more than 3,900 MW. With this capacity, electricity can be provided to about 30 lakh houses simultaneously.
Hundreds of new plants are under construction or in the pipeline. Most of these are being built high in the mountains, where electricity can be generated from fast flowing streams. In these projects there is little or no need for storage systems.
However, the higher reaches of the Himalayas are warming 50% faster than the global average, further increasing environmental risks. Initial investigation into last week's flash flood has attributed it to the collapse of a glacier and its rocky layer.
Scientists say that it is too early to make a direct connection with climate change. But Nepal's Disaster Risk Reduction and Management Authority had already said that more than 90% of the disasters recorded between 2018 and 2024 were 'climate-related'.
Nepal's former Energy Minister Kulman Ghisingh has called this devastating flood a 'once in a century' event, but he believes that it is important to learn lessons from it in the design of plants and selection of construction sites.
"We need to design plants to be more resilient to floods. The most important thing is to have early warning systems and robust emergency evacuation measures," he told environmental news outlet Mongabay.
It is feared that hundreds of workers, engineers and local residents of hydropower plants are trapped in the mud-filled tunnels of these plants.
Rajan Dhakal of the Nepal Electricity Authority says a 'rethink' of hydropower strategy could include reservoir-based plants that would not need to be built high in the mountains. In these, water can be stored and released as per requirement, but its economic and environmental costs will also be huge.
Some experts are raising questions about whether Nepal has become too dependent on hydropower.
Renewable energy expert Kushal Gurung, who has founded a clean tech company called Windpower Nepal, says, "In such dangerous times, we should not put all our eggs in one basket. We have to seriously adopt alternatives like solar and wind power. This requires a change in the energy policy, which is currently very hydropower-centric."
Vivek Shastri, a researcher at Columbia University's Center on Global Energy Policy, also supports his point. He says that "significant expansion of wind and solar generation is a resilience strategy that will limit future risks of concentrated or interconnected power system failure."
According to a report by a German aid agency, the technical capacity to produce solar energy in Nepal is about 10 times higher than that of hydropower.
Pushpa Sharma, senior research fellow at the Institute of South Asian Studies at the National University of Singapore, believes Nepal should diversify energy sources, but cautions that this can be done 'only to a limited extent'.
“While solar and wind have untapped potential, it is actually hydropower that gives Nepal a huge competitive edge over its South Asian neighbours,” he says, citing several comparative studies of renewable energy sources in the region.
Large scale investment in Nepal is still focused on hydropower. Some climate activists say funding has continued despite the disaster risks being known.
The Upper Trishuli-1 project, which was almost completely destroyed in last week's floods, was one of Nepal's largest foreign direct investment projects. Its price was estimated at approximately 647 million dollars. Those who provided financial assistance to it included the Asian Development Bank and the International Finance Corporation.
The money was invested in the badly affected Upper Trishuli 3A by the Export-Import Bank of China.
Himanshu Thakkar is the coordinator of South Asia Network on Dams, Rivers and People. He says international creditors were "fully aware of the extreme risk to which they were exposing thousands of workers, officials, residents, rivers, infrastructure and territory."
He says, "Their own reports were repeatedly emphasizing this. But they did not take any steps for prevention, did not create a strict system of checking, nor were they prepared for the disaster that they knew was likely to occur."
Thakkar reminds that the Trishuli river basin has been unstable in the past also. There were floods here in the last two years. In September 2024, there was a massive cloudburst over the Trishuli and Bhotekoshi river basins, causing flash floods in Rasuwa, Nuwakot and Dhading – the same settlements that were worst affected in last week's floods.
Then in July 2025, a glacier lake in Gyirong County, Tibet burst and came into Nepal through this river route, killing at least 11 people. That flood damaged vital infrastructure and halted trade on the busy Nepal-China corridor. Movement at the border remained closed for six months and was reopened on January 1 this year.
Nepal Electricity Authority's Dhakal admits that even if the climate risk assessment was done correctly, "the plants were not designed accordingly."
He said, "It is clear that we have to improve the way hydropower plants are constructed and operated."
Private operators are already feeling the economic impact. According to Uttam Bhlon Lama of the Independent Power Producers Association of Nepal, insurance companies have paid out about $40 million for flood damage to more than 20 private plants in the past three years.
He warned that insurance premiums were rising rapidly and the costs of doing business were becoming 'impractical'.
Manjit Dhakal, a member of Nepal's climate delegation to the United Nations Climate Change Conference, says that this disaster shows that climate risks are international and Nepal cannot handle them alone.
He emphasizes that governments and international organizations should work together to share data, assess impacts and develop early warning systems.
He says, "Nepal is among the countries least responsible for the greenhouse emissions that increase these risks."
"The irony is that our hydropower industry is an attempt to further reduce our already very low emissions. We should not be forced to face these risks alone."
