Small scale hydro has a lot of potential in my opinion for Nepal. Many are very small scale. One problem where I was though was that it actually increased deforestation stranegly enough. In one village area in the mountains where I was, the villages used to go to sleep when it got dark and the fire was put out. But small scale hydro electrical units provided low wattage electrcity enough for lighting. So that meant they could stay awake until about 10 or 11 at night (and so they kept the fire going until 10 or 11 at night, instead of putting it out at 6 and then going to bed). Firewood consumption increased dramatically, and so did surrounding deforestation. But that is just teething problems with putting in new technology into systems like that, and I am a fan of the small scale hydro plants (some of them are built with just three sacks of cement and the generator so are small enough to be built several days from the nearest roads using porters to bring equipemrnt in).
There are many charities that establish these small scale hydro power units.
see
http://practicalaction.org/?id=region_nepal
you might also be interested in this site which goes into some detail about the renewable efforts and problems in rural Nepal
http://www.hlf.org.np/energyintro.htm I found this quote on the site interesting "For most villagers, kerosene for lighting is a significant expense, accounting for 10% to 20% of a typical family’s earnings.......Disposable flashlight (dry cell) batteries, used for flashlights and radio/cassette players are another significant expense for villagers, accounting for an additional 10% of families’ earnings. ." From my limited experience I would agree with that assesment (but please keep in mind that one persons experience is a very limited view).
I think biogas for cooking fuel has a significant potential as well for these poor communities. I made a drum biogas unit as an experiment and for water heating when I was in Nepal after getting the idea for it from a site that suugest them for volunatry workers in poor countries.
http://www.angelfire.com/mac/egmatthews ... iogas.html
the only difference was that I used vegitation mostly (weeds)instead of dung like they suggested because the locals needed all the dung for fertiliser. I got about 10 cubic ft of gas for every kilogram of weeds, but I think half that was carbon dioxide and the other half methane (roughly, as it is hard to be accurate). I had to use a batch system though instead of daily feed system because I used vegitation instead of dung. (I used it to boil drinking water for myself to make it safe). And
The only main issue with getting more sustainable energy into these poor communities is cost and knowledge. Which is probably why in the mountains it is often the monasteries that set up the small hydro units, or charity groups (they are the only ones with the money and the knowledge).
But please keep in mind that Nepal is a land of extreme geography from hot lowlands to high mountains and I only experienced living in the mountain village areas, so I am only talking about the remote mountain village areas of Nepal (these areas have an annual population growth rate of 1.8%, but the lowland Terrai has an annual population growth rate of 4.7%). About 50% of the population live in the hills and mountains, and the other half live in the Terrai (flat hot lowland).
Just a bit of food for thought about Nepals hydrocarbon use from the site about Nepals energy problems
"Because Nepal has no fossil fuel reserves, dependence on imports of kerosene, gasoline and diesel have put a strain on the economy and made Nepal vulnerable to embargoes. Fossil fuel imports accounted for 24% of total export earnings in 1993/93, down from 32% in 1991/92. In 1989, a kerosene embargo levied by India brought the Nepalese economy to a halt, and incited mass public demonstrations. "
..... and this was back in 1993 when crude oil was selling for $20 USD a barrel. Now project these figures forward to $60 a brrel. And you can see that $85 crude can utterly destroy Nepals's economy (as it has been doing) even without the Maoits problems they had.