The report examines the complex political economy dynamics around mainstreaming renewable energy (RE) in Nepal. It defines mainstreaming RE as establishing the necessary policy conditions for the full integration of non-hydropower RE sources, such as solar and wind, into the national electricity grid. The key insights from the analysis are multifaceted. Firstly, the report notes that the current narratives around RE, which tend to be heavily influenced by global climate change mitigation themes, often lack traction and face resistance within the Nepali context. Instead, the report recommends framing RE as a complement to the country’s dominant hydropower sector, as this alignment is more likely to resonate with policymakers and their perspectives on the energy landscape.  

Notably, the primary concern for the government is not a dislike of RE technology itself, but rather the challenges associated with managing a projected significant electricity surplus in the coming years and ensuring the long-term financial viability of the state-owned utility, the Nepal Electricity Authority (NEA). Increasing domestic electricity consumption and access through widespread electrification has now emerged as a key policy priority for the government, and the report suggests that proponents of RE should seek to align their agenda with this broader narrative of expanding energy access. To navigate this complex policy environment, the report outlines a potential reform pathway that involves conducting rigorous technical studies to strengthen the evidence base, identifying and mobilizing bureaucratic champions within key agencies such as the Alternative Energy Promotion Center (AEPC) and the Water and Energy Commission Secretariat (WECS), building political support at both the national and local government levels, and coordinating with diverse interest groups, including hydropower developers and local authorities. 

Alongside these efforts, the report emphasizes the importance of securing coordinated donor support and investing in institutional capacity building to facilitate the mainstreaming of RE in Nepal. Overall, the report suggests that while the broader factors may be trending towards the mainstreaming of RE, the current policy priorities are not yet fully aligned. However, a politically engaged and strategic reform process, as outlined in the report, has the potential to help expedite this critical energy transition in Nepal.