Trends in Energy Consumption and their Relationship with Economic Growth in Nepal (2003/04-2023/24)

Abstract

Energy plays a vital role in economic growth and sustainable development. This study examines the changing patterns of energy consumption in Nepal and their relationship with economic growth during FY 2004/05–2023/24. A quantitative longitudinal research design was employed using secondary data obtained from the Ministry of Finance, Water and Energy Commission Secretariat, Nepal Electricity Authority, National Statistics Office, and other official publications. Descriptive statistics, trend analysis, and correlation analysis were used to assess changes in energy consumption and GDP. The findings show that total energy consumption increased substantially alongside economic growth, although Nepal's energy system remains dominated by traditional biomass and commercial fossil fuels. While electricity consumption and renewable energy have expanded steadily, renewable energy continues to account for a relatively small share of the national energy mix and exhibits a weak, statistically insignificant relationship with GDP growth. The study concludes that expanding renewable energy, promoting clean cooking technologies, improving energy efficiency, and strengthening domestic electricity utilization are essential for accelerating Nepal's energy transition and supporting sustainable economic development.