Green hydrogen in Nepal’s energy transition

Nepal, a country with diverse climates and geography, faces significant climate change impacts, from melting glaciers in the Himalayas to erratic lowland monsoon patterns. To mitigate these impacts, Nepal is investing in renewable energy sources like hydroelectric power, promoting reforestation, and encouraging sustainable agricultural practices to reduce carbon emissions. Nepal’s contribution is insignificant globally, but its commitment to reducing carbon emissions is promising. After the government’s commitment to reducing carbon emissions and exploring renewable energy sources, efforts toward hydropower development, harnessing of solar energy and other green energy sources have gained momentum. For a couple of years, as green hydrogen has been considered the most efficient and sustainable green energy, its potential in Nepal has become of interest to researchers, developers and the government. It represents a promising solution in the nation's transition toward a low-carbon economy. This innovative energy source, derived from renewable electricity, can significantly achieve climate goals while promoting economic growth and energy security. 

Green hydrogen is generated through electrolysis, wherein water is split into hydrogen and oxygen using electricity derived from renewable sources. This contrasts with gray hydrogen, produced using fossil fuels and resulting in significant carbon emissions. Since green hydrogen is created using renewable energy like hydroelectricity, it does not contribute to greenhouse gas emissions, making it a green alternative and becoming the choice of most countries that plan to achieve net zero emissions in the near future.

Nepal’s abundant hydroelectric resources position it as an ideal candidate for green hydrogen production. With over 40,000 megawatts (MW) of hydroelectric potential, the country can leverage this clean energy to generate hydrogen. Till now, Nepal has produced 2,800 MW of electricity from hydropower and is expected to produce 15,000 MW by 2030 and 30,000 MW by 2035. This opens the door to various applications, including the production of green hydrogen, which contributes to reducing Nepal’s carbon footprint while supporting its energy needs and economy.

Green hydrogen can serve as energy storage, capturing surplus electricity during high hydropower generation. This stored energy can then be used during periods of low water flow or peak demand, enhancing grid stability and reliability. As most of Nepal’s hydropower plants are runoff river types, significant energy is expected to be surplus during the monsoon season, where about 80 percent of precipitation occurs. Once more than 30,000 MW of hydroelectricity is generated, it is expected to have significant surplus energy during the monsoon season, which can be transformed into green hydrogen either used during the dry season or in any other form. It can power vehicles, emitting only water vapor as a byproduct. This can significantly reduce emissions in the transport sector and is one of the most significant contributors to air pollution and carbon emissions. Adopting green hydrogen technology can set a precedent for sustainable transport for a country like Nepal, where transportation infrastructure is rapidly developing. The industrial sector can also benefit from green hydrogen. It can replace natural gas and other fossil fuels in various industrial processes, reducing carbon emissions and supporting the country’s climate goal of reaching net zero carbon emissions by 2050. Nepal can benefit from reducing carbon emissions by participating in international carbon trading and offset programs, which allow developed countries to invest in carbon-reduction projects and provide funding and technology. This will promote economic growth, job creation and sustainable practices while enhancing environmental and public health outcomes.

Moreover, green hydrogen presents export opportunities for Nepal. If the country can produce excess green hydrogen, it can become a valuable resource for neighboring countries seeking clean energy solutions. The sale and export of green hydrogen can be easily expanded to several countries, in addition to India and Bangladesh, which are considered hydropower markets only. This could provide an economic boost and position Nepal as a regional leader in green hydrogen production and technology.

Despite the numerous benefits of green hydrogen, several challenges must be addressed for its widespread adoption in Nepal. Infrastructure development is one of the primary hurdles. Establishing hydrogen production, storage and distribution facilities requires significant investment and technical expertise. The cost of building this infrastructure can be high. The cost of green hydrogen will be high due to being more expensive to produce than gray hydrogen, mainly due to the high costs associated with renewable energy and electrolysis technology. However, these costs are expected to decrease as technology advances and economies of scale are achieved.

Government policies and regulations play a crucial role in promoting green hydrogen. Clear guidelines and incentives are needed to encourage private sector investment and drive the development of green hydrogen technologies. Without a supportive regulatory framework, it will be challenging to attract the investment required to build necessary infrastructure. Nepal can form international partnerships to access technology and funding for green hydrogen projects. Collaborating with countries and organizations experienced in hydrogen technology can provide valuable insights and resources to accelerate Nepal’s green hydrogen development. By focusing on advancing green hydrogen technology, Nepal can reduce production costs and improve efficiency. This can lead to broader adoption of green hydrogen across various sectors, fostering economic growth and job creation. An Indian investor is reported to have expressed interest in investing in Nepal’s green hydrogen production and promised to commit Rs 2trn to the project if the Nepal government establishes a supportive policy framework for green hydrogen. Also, other investors, especially from developed countries, might be interested in investing in green hydrogen for their responsibility of combating carbon emissions.

So, green hydrogen can potentially be a game-changer for Nepal as it seeks to combat climate change and transition to a low-carbon economy. By leveraging its abundant hydroelectric resources, Nepal can produce green hydrogen to meet its energy needs and reduce its carbon footprint. The applications of green hydrogen in energy storage, transportation and industrial processes are vast, offering a cleaner alternative to fossil fuels. Despite infrastructure development and cost challenges, Nepal can overcome these hurdles through strategic planning, international partnerships and a supportive regulatory framework. By focusing on innovation and embracing green hydrogen technology, Nepal can position itself as a leader in the region, making way for a rapid economic growth and contributing to global efforts to combat climate change.