There are huge possibilities of producing energy in Nepal. Availability of enormous water resources and topographic situation gives rise to a potential for 83,000 MW of hydropower of which about 43,000 MW of power production seems to be economically and technically feasible. Till now, where only about 563 MW has been harnessed which is mainly consumed in urban areas, the rural and remote areas of the nation has no access to reliable and clean energy. In the other hand, in spite of enough possibility of producing energy in rural areas in the form of biogas, solar energy, wind energy, improved water mill, micro and mini hydropower, it has not been used as per the needs.
In Nepal, only 160,000 biogas plants have been installed out of the installation potential of 1.9 million biogas plants. There has been savings in the energy consumption by installing 250,000 improved cooking stoves. Similarly, in spite of huge potential of solar energy, only 75,000 solar home systems have been installed. With regard to the wind energy, it has not been possible to harness its potential. Up to now about 2,000 traditional water mills have been improved. Onlyabout 8 MW power is produced through micro hydro. These efforts have made it possible toprovide electricity services to about 40 percent of the population in the country. In the ruralareas, only 29 percent of the population has access to electricity.