Economics of Household Cooking Using Electricity in Nepal

Overview & Synopsis

The residential sector is one of the main consumers of energy in Nepal, with cooking being a major end-use. Unprocessed solid biomass fuels are the primary cooking fuels, with approximately 60% of households relying on them for their cooking needs. However, liquefied petroleum gas (LPG), which is entirely imported, is being widely adopted in urban areas. Electricity, which is primarily based on hydropower, a clean domestic energy source, has been used for cooking in less than one percent of households. This paper examines the cost economics of alternative technologies and fuels or their combinations for household cooking across different topographical regions in Nepal from both private and social perspectives. It finds electricity, on average, cheaper than fossil fuels but costlier than biomass fuels from a private perspective. If the costs of local air pollutants, particularly PM2.5, are considered, electricity would be the cheapest option for cooking, except for biogas, which also has minimal external costs. The study also attempts to explore the wider economic benefits of substituting imported LPG with domestic hydropower for household cooking.