Food, energy, and water (FEW) resources have high interconnection and interdependencies as each resource can be affected by the other two. Thus, the Nexus approach is introduced and implemented to manage FEW. In addition, the concept of decentralization for FEW-nexus is focused on equal distribution of food, water, and energy resources with a motive to attain sustainability.

Decentralized energy, water, and food (EWF) systems can be used as a supplementary measure to the existing centralized energy system. Decentralized systems typically use renewable energy sources, including small hydro, combined heat and power, biomass, solar, and wind power. A decentralized EWF system can increase the security of supply, reduce transmission losses, and lower carbon emissions. Decentralized energy systems provide opportunities for deploying renewable energy sources locally available as well as for expanding access to clean energy services to remote communities.

Although Nepal is small, landlocked, and is gifted with huge renewable energy resources, especially hydropower, solar, and wind power. It has a population of  29,192,480, with roughly 18.7% of the population living below the poverty line. Currently, Nepal’s Human Development Index is 0.602, with a ranking of 142nd of 189 countries. The majority of Nepalese people still have to rely on traditional energy sources such as biomass because of a lack of access to modern forms of energy. Moreover, the development and management practices of EFW are centralized and focus mainly on urban areas, thus leaving the majority of rural populations away from the EFW systems. The economy is dominated by agriculture, which provides a livelihood for over 80 % of the population and accounts for 41% of the Gross Domestic Product. Over 85% of Nepalese people living in rural areas use biomass as their energy source, especially fuelwood and agriculture residues. Commercial energy sources, such as petroleum and electricity occupy 12% of energy consumption of which nearly 2% represent the electricity of the total energy consumption. About 56% of the population has access to electricity in which urban areas have better access to electricity in comparison to rural areas (urban area 93% and rural area 49%). About two-thirds of households use firewood as their main source of fuel for cooking.

The total installed generation capacity in Nepal is only 1,182 megawatts (MW) against a peak electricity demand of 1,320 MW in fiscal year 2018–2019.The slow progress of hydropower development is because of insufficient planning and investment in technology, transmission, and distribution capacity also it concerned about the ability of the Nepal Electricity Authority (NEA) to honor take-or-pay contract obligations; and the delays in project development, due to legal and regulatory shortcomings. As a result, Nepal now suffers from a severe power crisis including frequent load shedding and it ranks 137th out of 147 countries in quality of electricity supply. Nepal has the potential to decentralize renewable energy supply systems, such as micro-hydro, solar PV, biogas, and improved cooking stoves, which can provide feasible and eco-friendly supply options.  Renewable energy technologies that can be used in Nepal include  100 MW of electricity that can be generated from the micro-hydro schemes;2100 MW from solar and 3000 MW from wind. Moreover, the country has the capacity to develop about 1.1 million domestic biogas plants.

Farmers have not always been able to access the subsidized farm power connection and due to irregular and unreliable supply of electricity which leads to plentiful groundwater at relatively shallow depths in most parts of the Terai, but low utilization of the resource due to high energy costs and different factors hinder access to water in the hills, mountains, and plains of Nepal. In the hills and mountains, the main problems are geophysical, with water mostly accessible in the valleys below the steep slopes, and rocky subsoil limiting the possibility of storage. Thus, rainfed agriculture is still the method of choice in most of this area. The plains areas of the Terai are mostly suitable for irrigation, but irrigation use remains low. Irrigation infrastructure in Nepal uses the traditional type, which requires more labour and resources for repair and maintenance. Increasing erosion, landslides, and sediment have further complicated repair and maintenance, making it more costly and reducing the command area for surface irrigation. Though Nepal is bestowed with rich agricultural biodiversity, providing over 66 percent of the employment opportunities and contributing 33 percent to GDP, in the present situation, irrigation systems in Nepal are running at low levels of both technical and allocative efficiency due to which the production of crops is minimized day by day which results in a high hunger hunt as by 2050, there will be around 36 million people in Nepal. Crops play a vital role in vendor-centric supply chains. It is often seen that farmers are compelled to sell crops at a low prices, but when customers receive the final product, there is massive growth in the price range. Moreover, farmers are not paid timely and are forced to sell their hard work at the lowest price to the monopoly market. In Nepal, it has almost become impossible for more than 80% of farmers to buy seed and fertilizer without vendor credit.

The vendors thus strategize from the farmer’s helplessness by providing them with seeds and fertilizers for free of cost and making sure that in return they shall sell all their crop productions to that same vendor. In the end, this monopolist group of the society snatches all the production of the poor farmers at very low rates.  So, it has become a trend for vendors to make the sole decision about crop prices before selling it to the next buyer at an excess profit.  The market is ruled by middlemen rather than farmers. There are no rules and regulations to stop this group from monopoly and monopolistic markets.