Pumped-storage hydropower projects are special types of projects that generate electricity using two reservoirs and special equipment. When the demand for electricity in the power system is high, electricity is generated from special types of turbines (pump-turbines) and generators (motor-generators) by pouring water from the upper reservoir to the hydro power house near the lower reservoir.

After electricity is generated, water is stored in the lower reservoir. When there is an increased supply of electricity in the system, water in the lower reservoir is pumped back to the upper reservoir by the same pump-turbine. The water is channeled down to generate electricity when the demand rises again.

For Nepal, pumped-storage hydropower is an entirely new concept. In 2017, the Ministry of Energy, Water Resources and Irrigation awarded a survey licence to the Nepal Electricity Authority (NEA) for the Begnas-Rupa Pumped-storage Project in Kaski. Once the project, a first of its kind in Nepal and estimated to cost around Rs 14 billion, is completed water will be pumped from Rupa Lake to Begnas Lake to generate electricity when power demand is low to supply that electricity during the peak four hours of daily demand. It has been estimated that about 150 MW of electricity can be generated in those four hours by channeling down water from Begnas to Rupa which is below 60 metres in altitude from Begnas. As there is no technical manpower in Nepal to study this project, Nepal Electricity Authority has sought the assistance of Japan International Cooperation Agency (JICA).

There is no need to develop much infrastructure for this project due to its close proximity to the city of Pokhara. The proposed Begnas-Rupa Pumped-storage Project, which is located along the Prithvi Highway, requires a 10 km long transmission line to supply the generated power to the grid.

Similarly, some additional access roads need to be built to construct the project. Currently, NEA is conducting an environmental impact assessment (EIA) and technical feasibility study for the hydropower project which will be constructed in coordination with the Rupatal Conservation Integrated Development Project.

Only time will tell if this proposed project, which NEA is working on, will be constructed, or its development will be completed within the estimated time and cost. Nonetheless, this will not lessen the importance of pumped-storage hydropower projects for a country like Nepal which has to rely on rain-fed river-based power systems to fulfill its electricity needs. This is because such projects can give us the ability to generate electricity when we need it the most in winter or the rainy season.

However, the power market must decide on whether there is a need for pumped-storage projects. In a market-oriented economy, the price of any commodity is determined by the market. This rule also applies to electricity. Producers can benefit by buying electricity at cheaper prices during midnight times when the demand for electricity is low for pumping water to generate and sell electricity when the demand for electricity is high.

While economic benefits can be reaped from pumped-storage hydropower projects, developing such projects can also help to maintain a balance in the power supply across the country.   

The conclusions of the above mentioned feasibility study should be drawn on the basis of the economic and technical aspects and what benefits these types of projects offer to the country’s power system and the electricity market.

Afterall, electricity generated by pumped-storage hydropower projects has to compete with the electricity produced by other types of projects. The economic viability of a pumped-storage hydropower project can be established by determining the minimum price of electricity during low demand hours and the selling price during high demand hours, the cost of capital for constructing the project, the longevity of the reservoir and for how many years will the investor be allowed to operate the project.

As no such project has been studied in Nepal before, the implementation of the Begnas-Rupa Pumped-storage Project will provide much clarity in this regard. It will also help to develop such projects in other places of the country as well.
The Begnas-Rupa Pumped-storage Project will also be important for Nepal in terms of garnering knowledge about the maximum utilisation of the country's water resources and topography for hydropower development.