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Domestic Socioeconomic Barriers to Hydropower Trading: Evidence from Bhutan and Nepal

Author

Listed:
  • Kaoru Ogino

    (Asian Development Bank, Manila 1550, Philippines)

  • Mikiyasu Nakayama

    (Graduate School of Frontier Sciences, The University of Tokyo, Chiba 277-8563, Japan)

  • Daisuke Sasaki

    (International Research Institute of Disaster Science, Tohoku University, 468-1 Aoba, Aramaki, Aoba-ku, Sendai 980-0845, Japan)

Abstract

Bhutan has increased exports of surplus hydropower generation, whereas Nepal has been suffering from domestic power shortages. Why has Bhutan successfully promoted hydropower development and exports, while Nepal has failed to do so? This paper focuses on inherent development barriers that stem from domestic power supply, internal governance systems, and indigenous societal sensitivity. There are lessons to be learned from Bhutan’s practices that could be applied in Nepal. First, hydropower development can be severely affected by electricity scarcity that arises when power export is privileged over domestic power supply. Nepal has fallen into this negative loop, whereas Bhutan has overcome it through policy interventions that ensure visible links between power exports and domestic power consumption. Second, the sector reforms in the two countries contrast in terms of institutional, operational, and financial efficiency. Without fundamental reforms, Nepal’s sector-wide inefficiency fuels a vicious circle. Third, local resource conflicts and social complexities have made Nepal’s hydropower projects more complicated than Bhutan’s. In planning hydropower projects, it is crucial to pay careful attention to domestic stakeholders and local benefits. Planners and governments must ensure that projects are designed with extensive benefit sharing mechanisms, sustainable value chains, effective sector reforms, and sufficient societal conflict management.

Suggested Citation

  • Kaoru Ogino & Mikiyasu Nakayama & Daisuke Sasaki, 2019. "Domestic Socioeconomic Barriers to Hydropower Trading: Evidence from Bhutan and Nepal," Sustainability, MDPI, vol. 11(7), pages 1-19, April.
    • Handle: RePEc:gam:jsusta:v:11:y:2019:i:7:p:2062-:d:220668
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    References listed on IDEAS

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    1. Singh,Anoop & Jamasb,Tooraj & Nepal,Rabindra & Toman,Michael A., 2015. "Cross-border electricity cooperation in South Asia," Policy Research Working Paper Series 7328, The World Bank.
    2. Mikiyasu Nakayama & Miko Maekawa, 2013. "Economic benefits and security implications of trading hydropower through transboundary power grids in Asia," International Journal of Water Resources Development, Taylor & Francis Journals, vol. 29(4), pages 501-513, December.
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    Cited by:

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    2. Llamosas, Cecilia & Sovacool, Benjamin K., 2021. "The future of hydropower? A systematic review of the drivers, benefits and governance dynamics of transboundary dams," Renewable and Sustainable Energy Reviews, Elsevier, vol. 137(C).
    3. Minna Havukainen & Mirja Mikkilä & Helena Kahiluoto, 2022. "Climate Policy Reform in Nepal through the Lenses of the Institutional Analysis and Development Framework," Sustainability, MDPI, vol. 14(12), pages 1-21, June.
    4. Schulz, Christopher & Saklani, Udisha, 2021. "The future of hydropower development in Nepal: Views from the private sector," Renewable Energy, Elsevier, vol. 179(C), pages 1578-1588.
    5. Zida Song & Quan Liu & Zhigen Hu & Chunsheng Zhang & Jinming Ren & Zhexin Wang & Jianhai Tian, 2020. "Construction Diversion Risk Assessment for Hydropower Development on Sediment-Rich Rivers," Energies, MDPI, vol. 13(4), pages 1-20, February.

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