First Business News Portal in English from Nepal
KATHMANDU: The Nepal Electricity Authority (NEA) has released its highly anticipated annual report, under the astute guidance of none other than Kul Man Ghising, who holds the esteemed position of Managing Director at NEA. Within the context of this significant announcement, Ghising confidently asserted his pivotal role in ushering forth a remarkable achievement within Nepal’s dynamic power sector:
MANAGING DIRECTOR’S REPORT
Nepal Electricity Authority (NEA) feels privileged and honored of having fulfilled its commitment of availing reliable, affordable and quality power to its esteemed consumers for the past 38 years.
On behalf of NEA, on this auspicious occasion of its 38th anniversary, I express my sincere gratitude to all concerned for standing with us along the way and at the same time emphasize our continued determination in improving the quality of service and ensuring electricity access to all in the days ahead.
This Annual Report is a reflection of the achievements of the previous year and, at the same time, the targets to be met in the coming years. As in the last few years, the previous year has also witnessed increase in generation capacity and, in particular, the expansion of transmission and distribution system, enhancement of domestic consumption, export of surplus electricity and profit earning. The year under review also achieved the record low T&D losses in NEA’s history.
The recent state visit of the Right Honorable Prime Minister to India has paved the way for long term power export to India and, at the same time, created a conducive environment for the hydropower development in the country along with the possibility of expanding power market to the BBIN level in the near future.
A total generation capacity in the last FY reached 2,684 MW with the commissioning of new projects equivalent to the capacity of 491 MW. The previous year recorded significant reduction in energy generation of NEA and IPP projects due to severely dry winter resulting in increased import at a relatively higher market price.
Nepal entered into the era of power surplus during the wet season months a couple of years ago. This trend will continue to grow with the commissioning of more generation projects in the years to come. At present, a total of around 452 MW of hydropower is being exported to India on the Day-Ahead basis through the Indian Energy Exchange (IEX). This export quantum will increase after obtaining the approval for more hydropower projects submitted to Government of India. This increase in power export will not only enhance NEA’s financial health but also play a significant role in helping the nation increase foreign currency reserves.
Currently, surveillance activities are being conducted by International Credit Rating Association (ICRA) to assess the credit rating of NEA. In FY 2022/23, NEA submitted a Financial Restructuring Plan III to the Ministry of Energy Water Resources and Irrigation with the aim of enhancing existing financial management and operating performance of NEA. This will open avenues for issuing IPO at a premium value which will further enhance NEA’s investment capability for the development of major infrastructure projects in future.
NEA has recognized the potential of digital technologies to revolutionize its operations and enhance the efficiency and reliability of its services. Recognizing the strength of Information and Communication Technology (ICT), NEA has taken significant strides to embrace digital innovation.
Guided by the recently approved “NEA IT Policy 2023”, we are determined to modernize our operations and deliver state-of-the-art electricity services to our consumers. Through online portals and mobile applications, customers can now easily pay bills, report complaints, and access information related to power supply and outage schedules.
Additionally, NEA has introduced Centralized Call Center, allowing customers to receive timely assistance and support, thus reducing response times and improving consumer satisfaction.
The Centralized Payroll and Pension System has been successfully deployed through the centralized system from the year under review. This will ease the process of payment of NEA for income tax, provident fund, citizen investment trust, retirement payments and other staff deductions.
In line with the national commitment on Gender Equality and Social Inclusion (GESI), NEA has adopted the “Gender Equality and Social Inclusion strategy and Operational Guidelines for mainstreaming GESI consideration” within the organization. NEA has been prioritizing the GESI principles throughout its operation supporting women and marginalized communities to participate in its activities.
Despite the high priority given to safety measures by NEA, some unfortunate cases of injuries and casualties were recorded due to electrical accidents. I, on behalf of the entire organization, would like to pay homage to the departed souls and assure greater vigilance and awareness to minimize accidents in the days ahead.
The performances and achievements of NEA in the year under review, 2022/23, are highlighted below:
a) Operational Performance
The number of consumers has been increasing gradually over the years and, in the FY 2022/23,ithas reached 5.14million, an increase by7.76 % against4.77million in the previous year. The figure does not include the consumers under Community Rural Electrification, which is currently serving about 0.51 million consumers across the country. As in the past, the domestic consumer category remained the largest sector with 92.32% share of the total consumers. Industrial and other consumers accounted for 1.31 % and 6.37 % respectively. The total population with access to grid connected electricity has reached 95.03% in FY 2022/23.
NEA’s hydropower plants generated 2,930GWh of electricity in the year, a decrease by10.10 % compared to the highest recorded annual energy of 3,259GWh in FY 2021/22. This was mainly due to the unexpected reduction in river discharge during the dry season months.
The energy purchased from Independent Power Producers (IPPs) and NEA’s subsidiaries was 5,118GWh and 2,488GWh, an increase by 19.41 % and 25.91 % from the figure of 4,286GWhand 1,976GWhin FY 2021/22respectively. The total energy imported from India was 1,833GWhin FY 2022/23as compared to 1,534GWh in FY 2021/22, an increaseby18.79 %. The total available energy in the system increased by 11.80 % to 12,369GWhin FY 2022/23over the corresponding figure of 11,064GWh in FY 2021/22. Out of the total available energy, NEA and its subsidiaries contributed 43.80%, whereas import from India and purchase from domestic IPPs accounted for 14.82% and 41.38% respectively. The contribution of the domestic generation to the total available energy has remained approximately the same with a slight decrease from 86% in FY 2021/22to 85.18% in FY 2022/23.
The total domestic consumption in FY 2022/23was 9,358GWh, an increase by 5.50 % over the corresponding figure of 8,870GWh in FY 2021/22. The total export to India soared to 1,346GWh in FY 2022/23against the previous year’s figure of 493GWh only. Likewise, the net import of energywas487GWh, which accounted for 3.94 % of the total available energy in FY 2022/23 as compared to the corresponding figure of 9.49 % in FY 2021/22.
NEA has again been successful in reducing the system loss from 15.38 % in FY 2021/22to 13.46 % in FY 2022/23.
b) Financial Performance
As compared to the previous year, NEA’s net profit has marginally decreased by 7.76 % to NRs. 12,334 million in 2022/23from NRs. 13,371 million in FY 2021/22 due to reduced generation from domestic hydropower projects and increase in import from India.
The gross revenue generated from energy sales in the FY 2022/23reached NRs 100,032 million, with an increase of 17.77 % over the figure of NRs 87,155 million in the FY 2021/22. Revenue from other sources in FY 2022/23 increased to NRs 17,436 million from NRs 14,997 million in FY 2021/22.NEA’s operating expenses including power purchase cost stood at NRs 80,263 million, an increase by 26.16% from NRs 63,619 million of the previous year. The amount spent for power purchase alone was NRs 61,564 million in FY 2022/23, an increase by 28.14 % from NRs 48,045 million in FY 2021/22.
Other operating expenses for generation, transmission, distribution and royalty in FY 2022/23amounted to NRs 2,254 million, NRs 2,269million,NRs 11,540 million and NRs 1,632 million respectively.
The interest expenses in FY 2022/23 have been calculated as NRs 6,252 million against NRs 5,977 million in FY 2021/22, an increase by4.60 %. Similarly, depreciation and amortization expenses amounted to NRs 8,789 million in FY 2022/23, an increase of 17.20% from NRs 7,499 million in FY 2021/22. Foreign exchange loss decreased to NRs 1,124million from NRs 1,721 million in the previous year. The accumulated investment in Capital Works in Progress (CWIP) reached to NRs. 187,727million with the net addition of NRs. 47,496million for the year 2022/23.
NEA estimated a provision of NRs 1,000 million towards the long-term employee liabilities in respect of gratuity, pension, medical facilities and accumulated leave facilities under employees’ benefit scheme.
c) Ongoing Projects
There are several hydropower projects at various stages of development under the Engineering Services Directorate. In FY 2022/23, NEA identified various projects, namely, Upper Mustang Storage Project, Jawa Tila Hydropower Project, Bharbhung Hydroelectric Project and potential pumped storage projects for future development. The studies of ChainpurSeti HEP, Aandhi Khola Storage HEP and Begnas-Rupa Pump Storage HEP are being continued. NEA has signed MOU with Sutlez Jalvidyut Nigam (SJVN), India,for the formation of a Joint Venture Company to develop Arun 4 HEP with an indicative capacity of 490.2 MW.
NEA completed many transmission line projects, namely, Marsyangdi – Kathmandu 220 kV, New Modi -Lekhnath 132 kV, Butwal-Lumbini 132 kV, Mainhiya-Sampatiya 132 kV, Lekhnath-Pokhara 132 kV, Dordi Corridor 132 kV, Ramechhap (Gariyang)-Khimiti 132 kV, Kushaha-Kataiya 132 kV and Chameliya – Syaule-Attariya 132 kV Second Circuit Transmission Lines. Likewise,Sunwal 132 kV sub-station was also completed in the last year.
The total length of transmission lines of 66 kV and above in operation has increased from5,329 circuit kilometer (ckt.km) to 5,742 ckt.km. and those constructed in FY 2022/23is 413ckt.km. The last eight years have seen a significant increase in the completed transmission lines to a total of 3,118ckt.km.Similarly, a total of 1,718MVA substation capacity has been added to the system in FY 2022/23. This has increased the total substation capacity to 8,867 MVA, with 6,735MVA being added in the last eight years. Similarly, the total Capacitor Bank capacity at present is 748 MVA, an increment of 367MVArover the last eight years.
The total lengths of under-construction transmission lines at 132 kV, 220 kV and 400 kV levels are 1,4341,111ckt. km, 988ckt. km and 754ckt. km respectively, with the total of 3,1752,853ckt. km. Similarly, the total capacity of substations under construction is 10,29010,469 MVA. The total of 8181,141ckt.km, 1,4321,752ckt.km and 3,858ckt. Km of 132 kV, 220 kV and 400 kV transmission lines respectively are planned and proposed. Similarly,12,46515,564 MVA of additional substation capacity is also planned to be built within the next few years.
NEA plans to achieve hundred percent electrification within the next two years after electrifying 22additional districts in addition to the 55districts already electrified in the previous years. NEA commissioned 15new distribution substations of 33/11 kV corresponding to the capacity of 140MVA in FY 2022/23to bring the total number to 187corresponding to the total capacity of 2,204 MVA.
Likewise, the total line lengths corresponding to 33 kV, 11 kV and 0.4/0.23 kV voltage levels completed as of FY 2022/23were 7,237ckt. km, 47,733ckt. km and 145,270ckt. km respectively, whereas the line lengths commissioned in FY 2022/23alone were 617 ckt. km, 2,892ckt. km and 8,675ckt. km respectively. A total of 42,185 distribution transformers has been installed with the total capacity of 4,113 MVA in the system up to the FY under review, which includes 2,824numbers of distribution transformers of capacity 268MVA installed in FY 2022/23.
Following Government of Nepal’s electricity roadmap, NEA’s commitment to provide electricity access to every household by the FY2024/25through adequate network expansion plans all over the country still remained a top priority. Enhancement of system reliability through network strengthening will continue unabated. Similarly, for safety and reliability as well as from the aesthetic point of view, underground cable laying works to upgrade the distribution system is underway in different parts of Kathmandu. Further, installation and commissioning of underground distribution network under Lagankhel, Pulchowk, Bhaktapur,Thimi, Pokhara and BharatpurDistribution Centers are under progress.
NEA has also focused on various activities to enhance its operational efficiency, reduce electricity theft and enable itself to serve its consumers in a better way. The implementation of Smart Grid and Smart Metering System will increase efficiency and reduce losses. Kathmandu Valley Smart Metering Project has already successfully installed smart meters and AMI infrastructure for 97,000 consumers in the areas under Ratnapark and Maharajgunj Distribution Centers. The second phase of the project will start with the objective of replacing 600,000 electromechanical meters under nine distribution centers in the Kathmandu valley by smart meters and integrate them into the Advanced Metering Infrastructure System of NEA. In addition, NEA is replacing hundred percent three phase electromechanical meters by smart meters.
NEA has already initiated Revenue Management System (RMS) in distribution centers. The Distribution Command Control and Data Center is nearing completion at the Load Dispatch Center premises at Suichatar, Kathmandu.
Automation of grid substations will ensure controlled and systematic operation of the grid system. This will ultimately lead to reliable power supply and remarkable savings in the operation of the grid substations. Substation Automation System (SAS) is being installed in 13 grid substations within the valley under Kathmandu Valley Substation Automation Project. This will enable them to be remotely operated from the Master Control Center at Baneshwor Substation. Similarly, Grid Automation Project will install infrastructures for digital control and monitoring of 39 existing grid substations outside the valley.To improve the quality of electricity supply in Madhesh Pradesh, construction of additional distribution system infrastructures including the reinforcement of existing distribution networks is under progress.
The transmission lines and substation capacities of the major cities of the country will be insufficient to meet the growing energy demand as well as the peak demands. The Power Transmission System plan for the major cities and associated industrial areas for the future growth till 2050 AD is being studied and implemented in different clusters.
The demand side management with energy efficiency program implemented in the past to reduce peak and energy demands of the system as a whole will be continued in the coming years. Capacitor Bank installation project for different substations and distribution transformers, which has helped improve voltage profile and reduce technical loss, will be implemented in all Grid and Distribution Substations as required.
d) Subsidiary Companies
The successful implementation of Chilime Hydropower Project under a subsidiary company of NEA encouraged the development of more projects under the company mode to ensure early decision making, public participation and mobilizing domestic fund. The major projects operating under the Company mode are as follows;
1. Chilime Hydropower Company Limited (CHCL):CHCL was the first subsidiary company of NEA and owns the Chilime HEP (22.1 MW). It has five subsidiary companies, namely; Rashuwagadhi Hydropower Company Limited (RGHCL) constructingRashuwagadhi HEP (111 MW), Madhya BhotekoshiJalvidyut Company Limited (MBJCL) constructing Middle Bhotekoshi HEP (102 MW),SanjenJalvidyut Company Limited (SJCL) constructingSanjen HEP (42.5 MW) and Upper Sanjen HEP (14.8 MW), ChilimeSeti Hydropower Company to develop SetiNadi 3 (87 MW) hydropower project and Chilime Engineering and Services Company Limited (ChesCo) to provide Engineering and Consulting Services for developing hydropower projects. All four projects under construction are all nearing completion.
2. Upper Tamakoshi Hydropower Limited (UTKHPL):Upper Tamakoshi HEP (456 MW)started commercial generation from August, 2021 and delivered 1,945.8GWhof energy to NEA in FY 2022/23.
UTKHPL has also started theconstruction process of RolwalingKhola HEP (20.66MW) under EPC mode. The construction of this Project will enhance the dry season energy of UTKHP and increase the peaking hours from 4 to 6 even in the driest months.
3. Tanahu Hydropower Limited (THL):Tanahu Hydropower Project (140 MW) is being developed under THL, under co-financing from ADB, JICA and EIB. The Package 1 Contractor has achieved successful breakthrough of Diversion Tunnel 1, Diversion Tunnel 2 and left bank access tunnel. The Package 2 Contractor has successfully completed the excavation including concrete lining of tailrace, draft tube tunnel and cable tunnel. The concreting works of Powerhouse and Erection Bay are in progress. The Contractor for Package 3 has completed the construction of 66 tower foundations out of 94 numbers. The Project is scheduled for completion by May 2026.
THL further envisages developing Lower Seti Hydropower Project with an installed capacity of 126 MW in the downstream reaches of Seti River. Starting from this fiscal year, the Project is commencing its preparatory works like, land acquisition and road/bridge construction.
4. Trishuli Jal Vidhyut Company Limited (TJVCL):This Company was established with NEA and Nepal Doorsanchar Company Limited (NDCL) as promoters, to develop Upper Trishuli 3B HEP (37 MW) as a cascade of Upper Trishuli 3A HEP. The construction works, stalled in March 2020 due to the lockdown, resumed after more than a year in April 2021. The overall physical progress till date is 70 % and the Project is scheduled for completion by September 2024.
5. Raghuganga Hydropower Limited (RGHPL): RGHPL was established to develop Rahughat Hydroelectric Project (40 MW). Civil and Hydro-mechanical Contractor,Jaiprakash Associates Limited, India,and Electro-mechanicalContractor,Bharat Heavy Electrical Limited, India,are being engaged in their works. The scheduledtime of completionhas been extended till October 2024.
6. Upper Arun Hydroelectric Ltd (UAHEL): UAHEL was formed for the development of Upper Arun Hydroelectric Project (1,060MW) and IkhuwaKhola Hydroelectric Project (40 MW). EIA report of the project in compliance withGoN’s requirements is under final review of Department of Electricity Development (DOED).Consultant for Tender Design, Preparation of Bidding Documents, Construction Supervision and Post Construction Services will be selected by October 2023. Physical Model Test work has begun at Hydro Lab. A contract for the “Construction of Access Road for Upper Arun Hydroelectric Project” was signed on 12 March 2023. Similarly, a contract for “Construction Supervision and Contract Management of Access Road Construction for UAHEP” was signed on 10 April 2023.
The World Bank is leading the Consortium of International Lenders for financing the project and HIDCL is the leading consortium of domestic financiers. The financing for IkhuwaKholawill be from GoN. The main civil works for both projects are planned from mid-2025.
7. TamakoshiJalvidyut Company Limited (TKJVC): TKJVC Limited has been incorporated for the development of Tamakoshi V HEP (99.8 MW), which is a cascade development of the Upper Tamakoshi HEP. A Tripartite loan agreement was signed between NEA, TKJVC and Employee Provident Fund (EPF) on 21 May 2023 for the debt funding. Contract Agreement for the Construction Management and Supervision of construction was signed with DolsarEngineering Inc. Co., Turkey. Construction works are to be implemented in two packages; Package 1: Civil and HM works and Package 2: Electromechanical and Transmission Line works. A Re-Tender for Contract 1 was published on 26 June 2023.
8. DudhkoshiJalvidyut Company Limited: This Company has been established for the implementation of Dudhkoshi Storage HEP (635 MW). The Consultant has submitted most of the reports and is working to submit the Detailed Design Report incorporating all the comments from the Panel of Experts (POE) by the end of November 2023. ADB is leading the financing of this Project. Financial arrangement is expected to be completed by December 2024 and the actual construction will start in the beginning of 2025.
9. Modi Jalvidyut Company Limited (MJCL):MJCL is established to develop and implement two projects, namely, Upper Modi A Hydroelectric Project (42MW) and Upper Modi Hydroelectric Project (19.8MW) inKaski District. Financial Closure with NMB Bank and HIDCL is in the final stage. Tender for Civil and HM works (Package 1, EPC contract) of UMAHEP was published in July 2023 and EM tender will be published soon. Similarly, Tenders for UMHEP will be floated in the current FY.
10. Utterganga Power Company Limited (UGPCL): This company was established to undertake the study and development of Uttarganga Storage Hydroelectric Project (828 MW) in Baglung district of Gandaki Province. Since the Consulting Contract for the Detailed Design of the Project was terminated,the Company is preparing the documents for re-inviting Expression of Interest (EoI).
11. NEA Engineering Company Limited (NEC):NEA established NEC to provide complete engineering services and solutions in the development of the energy sector as well as other infrastructures. NEC is providing the consulting services for Feasibility Studies, Detailed Engineering Design, Design and Documents review, Project Management, Construction Planning, Financial Analysisand Supervision of Hydroelectric and other Infrastructure Projects in different fields such as civil, hydro-mechanical, electro-mechanical, transmission lines and distribution system, plant operation, maintenance and rehabilitation works, etc.
12. Nepal Power Trading Company Limited (NPTC): NPTC has been established with the objective of carrying out power trading within and outside the country. The Company received the trading license and transaction approval for its operation.
13. Power Transmission Company Nepal Limited (PTCN): This company has been established with the objective of developing high voltage transmission interconnection system between Nepal and India. The Nepal portion of the 400 kV double circuit line between Dhalkebar and Muzaffarpur was implemented by PTCN.
e) Private Sector Participation
NEA has been facilitating the participation of the private sector through Power Purchase Agreements (PPA) to ensure meeting the energy demand of the country.
A total of 27new projects developed by the Independent Power Producers (IPPs) with a combined installed capacity of 491MW were commissioned in FY 2022/23. This has increased the total number of IPP-owned projects in operation to 159with a combined installed capacity of 2,023 MW, with NEA’s subsidiary company projects contributing 478 MW.
A total of 126projects to be developed by IPPs, with a combined installed capacity of 3,103 MW, are under construction after financial closure. Similarly, 107IPP-owned projects with a combined installed capacity of 2,632 MW are at various stages of development, with financial closure yet to be achieved.
During FY 2022/23, a total of 35new PPAs with a combined installed capacity of 1,350MW were concluded includinga solar plant of 5 MW.This has increased the total number of PPAs signed with the various IPPs to 392with the combined installed capacity of 7,758 MW as of FY 2022/23.
So far as power purchase from domestic solar power developers is concerned, RfP was invited for the selection of developers for setting up of Grid-connected Solar PV Power Projects in Nepal for the purchase of power with the benchmark price of NRs 5.94 per kWhthrough tariff-based competitive bidding process.
f) Cross Border Power Trading
NEA experienced difficult times in the last FY while interacting with the Indian power market. As the last winter remained much drier than the previous years, there was an unprecedented fall in the domestic hydro generation, pushing NEA onto the higher dependence on power import from India to ensure reliable supply to our valued consumers.
NEA eventually decided to procure power through bids from the Indian generators and traders with the hope that competition would significantly lower the purchase price of electricity and it would culminate in positive implications on the overall financial performance of the organization.
However,since the lowest bid prices exceeded the average price trends with the Day-ahead market of India’s both Power Exchanges, NEA was bound to annul the bidding process and cling to a bilateral agreement for the months of March, April and May at the prices to be negotiated with the Indian power traders. Despite the certainty of losses due to higher purchase prices, NEA has provided uninterrupted supply to its consumers, affirming its strong commitment to serve the nation.
Likewise, revision of the electricity tariff under the Indo-Nepal Power Exchange Committee (PEC) mechanism from the Indian fiscal year 2021/22 to 2022/23 stretched upward by 5.5 percent on annual average including the tariff escalation determined for the ongoing Indian fiscal year 2023/24 as per the decision of the 14th PEC meeting with regard to the power transaction of NEA with Bihar, Uttar Pradesh and Uttarakhand at 132 kV, 33 kV and 11 kV levels.
NEA and NVVN also signed a medium-term agreement for the sale of 200 MW of power to Haryana, India, on 23 May 2023.
It was followed by another milestone Power Purchase/Sale Agreement signed between NEA and PTC India Limited on 28 June 2023 for purchase/ sale of power up to 300 MW through Power Exchange or bilateral mechanism using Bihar’s transmission infrastructure and 132 kV Nepal-Bihar transmission lines. Nepal and India had positively deliberated during the 10th Joint Working Group/ Joint Steering Committee meetings on India-Nepal Power Sector Cooperation towards Nepal’s request that 132 kV lines between Nepal and Bihar be allowed for export of power from Nepal to India during the wet season months.
On the cross border transmission infrastructure front, Indian portion of New Butwal – Gorakhpur 400 kV Transmission Line has entered into implementation phase after NEA and Power Grid Corporation of India Limited (PGCIL) signed Joint Venture & Share Holders’ Agreement (JVSHA) on 50:50 equity-sharing basis followed by signing of Implementation and Transmission Service Agreement (ITSA).
So far, Nepal has obtained approval from the Government of India only for the 10 hydropower projects to export power of about 452 MW to the Day-ahead market of the IEX though the power transfer capacity as mutually agreed in the 10th India-Nepal JWG/JSC meetings for the Dhalkebar-Mujaffarpur 400 kV Transmission Line is 800 MW, whereas applications submitted through NVVN for the hydropower projects, far more than the remaining transmission line capacity, are in the process of India’s approval.
Going forward, NEA, NVVN and Bangladesh Power Development Board (BPDB) are almost in the final stage of signing a Tripartite Agreement on medium-term basis after agreeing on the tariff for the export of 40 MW of hydropower from Nepal to Bangladesh by using the Indian grid and the commencement of the said power transfer to Bangladesh through Baharampur – Bheramara 400 kV HVDC link between India and Bangladesh is expected to take place from the ongoing wet season. It may be considered as a landmark event since NEA will be marching into an era of sub-regional cross border power trading with India and Bangladesh on board.
g) Way Forward
NEA, as a government-owned power sector utility, has always been moving forward to meet its main objective of satisfying its consumers with reliable, quality and affordable supply of electricity as well as maintainingsound financial health for further development. Succeeding in meeting this objective has culminated in people’s trust and optimism in our endeavors towards achieving the long-standing goal of becoming self-reliant in our energy uses and reducing trade deficit by exporting surplus electricity to neighboring countries.
NEA will continue its efforts in developing hydropower projects on its own and with joint venture partners, through subsidiary companies. Our focus will be more on large-sizereservoir and peaking hydropower projects. NEA is initiating construction of Dudhkoshi reservoir (635 MW), Upper Arun (1061 MW), ChainpurSeti (210 MW), TamakoshiV (99 MW) and Upper and Lower Modi (60 MW) projects with utmost priority. Likewise, Arun 4 Hydropower Project (490.2 MW) is being developed by joint venture company between NEA and SatlejJalvidyut Company, India.Similarly, the fourth Joint Steering Committee (JSC) meeting between Nepal and Bangladesh has agreed to form a JV company to develop Sunkoshi III HEP (683 MW) in the near future.
NEA has set the policy to purchase solar power through competitive bidding process from the prospective bidders. Recently, NEA issued the Request for Proposal (RfP) for the purchase of 100 MW of solar power with the maximum price capped at NRs 5.94 per KWh. Further, a new PPA policy is under review for power purchase by allowing developers to design hydropower projects with the optimum Probability of Exceedence(PoE) in order to generate maximum energy and eventually enhance the power export quantumduring the wet season.
NEA’s prime focus is to upgrade and expand transmission and distribution infrastructure for ensuring reliability and quality of supply to our consumers and enhancing the quantum of power export in coming future. More high capacity transmission interconnections are being planned between Nepal and India for commissioning in different timeframes. Indian portion of Butwal –Gorakhpur 400 kV cross border line is under implementation through the Joint Venture Company established between NEA and PowerGrid, India. Likewise, the Joint Steering Committee (JSC) meeting between Nepal and India has decided to implement two more 400 kV cross border transmission lines to connectNew Inaruwa, Nepal to Purnia, India and Dodhdhara, Nepal to Bareli, India, by FY 2027/28 and 2028/ 29 respectively.
Further, a high voltage transmission line from Ratamate (Nepal) to Kerung (China) will lead to Nepal-China power trading in the years to come. The feasibility study of Nepal side of transmission line has already been completed and environmental studies are being carried out. This transmission line will connect China to the South Asian Region.
NEA is constructing 400/220 kV backbone transmission lineswithin Nepal withthe investment ofGoN/NEA and the support from various donor agencies. Considering the prospects of high demand growth in Kathmandu and other major urban areas of the country, NEA has formulated plans for building transmission and distribution infrastructures to meet the growing demand of the next thirty years. Various studies in this regard are being conducted, whereas the land acquisition for 20 different substationswithin the Kathmandu valley is in progress.
Similarly, the studies on the transmission system for 11 clusters of major cities outside the Kathmandu valley are being carried out for their early implementation. This will not only meet the power demand until 2050, but also enhance the reliability and quality of power supply. Furthermore, studies on 400 kV and 220 kV multi-circuit south corridor transmission lines, approximately 600 km, along the postal highway are underway. This will connect various industrial corridors to meet the load demand of the upcoming industries near the Indo-Nepal border. These transmission infrastructures will ultimately support cross border power trading between Nepal and the neighboring countries.
NEA will manage the fund required for the implementation of these projects with its internalresources and the concessional loans from the various multilateral financing agencies including Exim Banks.
The primary objectives of NEA is to increase domestic demandand enhance the quantum of power export. Nepal has already embarked on clean energy transition inseveral sectors like cooking, cooling, heating, transportation and manufacturing industries. The use of Electric Vehicles (EVs) and electric cooking are now being increasingly popular day by day. This will not only help consume more electricity, but also save millions of dollars being spent on oil, gasand coal import.
NEA is committed to build robust infrastructures to promote EVs and electric cooking. Under this mission, NEA has already completed the installation and commissioning of EV charging stations based on DC Fast Charging Technology at 51 prime locations all over Nepal and additional 13 more charging stations are being installed at different locations.At the same time, NEA has also adopted the policy to encourage private sector to come into this business, following which,many private companies have established charging stations at various locations.
Nepal has lately transitioned from a nation of chronic electricity deficit to the changed landscape of electricity surplus. Moreover, NEA has been playing a crucial role to enhance cross border power trading with India and beyond.The recent state visit of the Rt. Honorable Prime Minister to India has paved the way for the export of 10,000 MW to India in the coming 10 years. Likewise, mid-term agreements have been signed with NVVN and PTC India for the export of 200 MW and 300 MW of power to India respectively. Similarly, atripartite agreement between NEA, BPDB and NVVN is likely to be concluded soon for the export of power to Bangladesh utilizing the existing available transmission infrastructures.
As Nepal Power Trading Company, a NEA subsidiary, has recentlyobtained the transaction approval for its operationalization, NEA is committed tostart the trading business through itinboth domestic and cross border markets soon.
Green Hydrogen is becoming a major source of fuel for transportationand industrial use in near future. Green Hydrogen is not only used for transportation, but also forproducing ammonia and chemical fertilizers. Nepal should focus on production of Green Hydrogen, Ammonia and Urea to ensure our energy and food security. With the abundance of water and surplus hydropower, Nepal can play a major role in this new field. In this context, NEA has carried out feasibility study for Green Hydrogen collaborating with GGGI (Global Green Growth Institute) and School of Engineering, Kathmandu University, so as to establish a Green Hydrogen Plant in Nepal as a pilot project. NEA is also looking for regional collaboration in green hydrogen initiatives in the years to come.
NEA has formulated IT Policy 2023, aiming to modernize its functionsand ensure secure, stable and standard IT infrastructure. Our endeavor towards this direction will lead to Digital NEA which will be in line with the GoN’s vision of Digital Nepal.
Organizational restructuring of NEA will continue to be our priority in the days to come and it will be accomplished with the adoption of a suitable modality by making necessaryamendment to the NEA Act, 2041. The initial framework for restructuring has already been formulated in Corporate Development Plan, 2019, as approved by the NEA Board.
NEA has recently prepared Financial restructuring Plan III and submitted it to Ministry of Energy, Water Resources and Irrigation for approval from the cabinet. As per the Plan, NEA is going to issue its portion of shares to the general public. This will ultimately monetize the assets within NEA and open the avenues for more investments in infrastructure projects.
Capacity building programswill be continued on a larger scale for efficient operation and implementation of NEA’s activities. In this regard, training for all levels of employees within the organization will be effectively conducted in the years to come.
It is our firm belief that ensuring the best service delivery with reliable, affordable and quality supply and improving morale and financial health of our organization will definitely improve our credibility and will enhance the prospects for overall development of the organization. Our every endeavor shall be focused for better and efficient NEA.
I, on behalf of NEA, would like to take this opportunity to acknowledge the contribution of everybody, directly or indirectly associated with the performance and achievements of NEA. First of all, I would like to bestow my sincere gratitude on the Right Honorable Prime Minister for his dynamicleadership in creating conducive environment for hydropower development in the country and taking remarkable initiatives in cross border power trading with the neighboring countries by reaching mutual understanding with India for long term power export.
I would also like to express my gratitude to the Honorable Minister of Energy, Water Resources and Irrigation, Chairman of NEA Board of Directors, for his proactive leadership in boosting the morale of team NEA and providing the right direction to the organization. I am also grateful to the Secretary, MoEWRI, for his continuous and unwavering support and direction in meeting the targets assigned to NEA. My sincere gratitude also goes to the members of the NEA Board of Directors for their expert and valuable guidance in decision making and formulating policies for the overall organizational performance and achievements within the framework of authorities and responsibilities envisaged in the NEA Act, 1984.
I would also like to thank the Government of Nepal, Ministry of Energy, Water Resources and Irrigation, Ministry of Finance and other concerned Ministries of the GoNfor their continued support, encouragement and patronage in the development of energy sector. I sincerely acknowledge the great concern shown by the parliamentary committees in our regular operation and development pursuits. I would also like to express my sincere gratitude to Electricity Regulatory Commission (ERC) for effective regulatory functions.
I am also grateful to the development partners including World Bank, ADB, JICA, EIB, AIIB, KfW, NORAD, Exim Bank of India, Exim Bank of Chinaand Exim bank of Korea, who have always helped us in the past and are willing to continue their involvement in the coming days to achieve our goal of fulfilling the growing needs of energy.
I also extend my sincere appreciation to Employees Provident Fund (EPF), Citizen Investment Trust (CIT), HIDCL and RashtriyaBeemaSangsthan for their help in fulfilling our investment needs. I sincerely appreciate the banks, auditors, IPPs, suppliers and investors for bestowing faith on us and helping us move forward. Likewise, my thanks also goes to the Indian power trading companies- NTPC VidyutVyapar Nigam (NVVN) and PTC India Limited- for continuously trading power with Nepal.
The role of the media in disseminating factual information about the organization to the general public has always been encouraging. I look forward for similar support in the days ahead. I would also thank and express my gratitude to all my predecessors, who have contributed to NEA’s growth.
The entire staff of NEA including the Employee Unions deserve appreciation for their hard work, support and cooperation for daily operation of activities and in implementing the policies even in difficult situations. Finally, I would like to express my sincere thanks and appreciation to our valued consumers and different professional organizations for bearing with us at times of extreme difficulties and boosting our morale by recognizing our untiring efforts. I would like to assure our valued consumers that every possible step will be taken to maintain a continuous, reliable and safe power supply in the coming days.
Kul Man Ghising
Note: this article is solely belongs to Kul Man Ghising and NEA.
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