Techno-Economic and Environmental Feasibility of 100% Electrified Steel and Cement Production Utilizing Surplus Hydropower in Nepal

Abstract

This paper evaluates the transition of Nepal’s two most carbon-intensive heavy industries—steel and cement manufacturing—from traditional fossil-fuel-dependent pathways to 100% electrified processing loops. Leveraging Nepal’s expanding, renewable, and cost-competitive domestic hydropower grid, this study models a 1,500 metric ton per day (t/d) green steel plant utilizing Hydrogen Direct Reduced Iron (H-DRI) tied to an Electric Arc Furnace (EAF), alongside a 3,000 t/d green cement facility driven by Industrial Plasma Torch Arrays and Electromagnetic Induction Kilns. Techno-economic simulation indicates that a dedicated combined continuous grid demand of 381.25 Megawatts (MW) is required to power both installations. While the upfront Capital Expenditure (CapEx) premiums are substantial totaling NPR 1,367 Crore for the electrified cement core alone—the structures become highly cost-competitive when evaluated against volatile imported coking coal. Financial viability is achieved by factoring in a monsoon-surplus electricity tariff of NPR 5.00 per kilowatt-hour (kWh) and monetizing avoided emissions through international compliance carbon markets. The combined initiatives prevent approximately 2.08 million metric tons of Carbon Dioxide (CO₂) emissions annually, generating up to NPR 1,185.55 Crore in passive annual carbon offset revenue. This strategic shift shrinks Nepal’s national trade deficit by replacing over NPR 200 billion in annual raw material and fossil fuel imports with domestic renewable energy, transforming the country from an industrial follower into a pioneer of regional green electrometallurgy.

Cite as:

Suresh Sapkota. (2026). Techno-Economic and Environmental Feasibility of 100% Electrified Steel and Cement Production Utilizing Surplus Hydropower in Nepal. Journal of Advanced Research in Industrial Engineering, 8(2), 51–61. https://doi.org/10.5281/zenodo.21702879