Hydropower in the Himalayas: the economics that are often ignored

Summary

Of all Himalayan nations, China has made the most progress towards hydropower development. This has been driven by three major factors. First, China has insufficient reserves of fossil fuels to meet the needs of its growth aspirations. The ongoing 13 th 5-year plan of the nation places substantial emphasis on increasing domestic consumption so as to promote consumption-led growth of the economy, marking a shift from its previous regime of export-led growth. This has to be associated with large-scale urbanization. Hence, the energy demands are only going to increase. Second, with the government’s aspirations to achieve energy independence, hydropower can play a big role in the energy policy of a fossil-fuel-deficient economy. Third, the concerns of global warming and climate change and the concerns raised under the COP also create the imperative towards less carbon-emitting sources of energy than fossil fuels. Though China’s potential hydropower capacity is estimated at up to 600 GW, the technically exploitable and economically feasible capacity is around 500 GW. There is therefore considerable potential for further hydro development.In South Asia, however, the hydropower potential has barely been tapped. Despite India’s tremendous potential in hydropower – fifth in the world – hydropower accounts for merely 12% of the total generation in the country as compared to thermal power’s contribution of over 70%. This shows the marginal role of hydropower in the Indian economy. On the other hand, the other Himalayan nations like Nepal and Bhutan boast of their hydropower potential due to the perennial nature of their rivers and the steep gradient of their topographies. Yet, even they have not been able to develop substantial parts of their hydropower potential.

Creators/Authors

Nilanjan Ghosh
Dr. Nilanjan Ghosh is Director, Observer Research Foundation (ORF) Kolkata. His previous positions at various points in time include Senior Fellow and Head of Economics at ORF Kolkata, Senior Vice President & Chief Economist at MCX (I) Limited in Mumbai, and Professor of >>

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