Nepal’s Electricity Authority explores real-time market opportunities in India

KATHMANDU: The Nepal Electricity Authority (NEA) has achieved a significant milestone by gaining permission from India to sell electricity in India’s Energy Exchange (IX) real-time market, marking the first time such approval has been granted.

Previously, NEA conducted electricity sales in India’s day-ahead competitive market through a bidding process. With this development, NEA can now participate in the bidding process a substantial 75 minutes before selling electricity in the real-time market.

This crucial approval came from India’s Central Electricity Authority (CEA), operating under the Ministry of Electricity, and was granted on a Saturday.

The Ministry of Electricity in India had previously amended procedures related to electricity import and export, opening the door for authorized bodies from neighboring countries to participate in the real-time market. This progressive change has far-reaching implications for cross-border electricity trade.

In its initial phase, the CEA of India has permitted the sale of approximately 44 MW of electricity, generated by the 19.4 MW Lower Modi and 24.25 MW Kabeli B1 hydropower projects, in the real-time market. Previously, electricity from these projects was exclusively sold in the day-ahead market, with the permission for day-ahead market sales set to expire soon.

Prabal Adhikari, the director of the Power Trade Department at NEA, shared that two projects seeking renewal for electricity trade in the day-ahead market have received approval for sales in both the day-ahead and real-time markets. This flexibility now allows electricity generated by these projects to be sold in either market, depending on real-time needs.

“This new development allows us to engage in electricity import and export business with a lead time of one hour and 15 minutes, offering enhanced adaptability in scenarios where electricity production experiences sudden changes,” stated the NEA official. Participating in the real-time market is a noteworthy accomplishment for NEA and is expected to streamline electricity management while bolstering cross-border electricity trade between Nepal and India.

The NEA has consistently exported surplus electricity to India during the rainy season, selling approximately 110 MW of electricity to the Indian company NTPC Vidyut Vyapar Nigam Ltd-NVVN through competition in IX’s day-ahead market. Recent developments also include a mid-term power agreement with NVVN for electricity sales in the state of Haryana.

To provide context, the NEA has received approvals for the export of 522 megawatts of electricity in the competitive market and an additional 110 megawatts destined for Haryana, totaling 632 megawatts. Of this, 562 MW of electricity is transmitted through the Dhalkebar-Muzaffar 400 KV transmission line, while the remaining 70 MW flows through the Mahendranagar-Tanakpur 132 KV transmission line.

In the months of August and September during the current fiscal year 2023/24, the NEA successfully exported electricity worth Rs 433.1 million to India, marking the continuing growth of cross-border electricity trade and cooperation between the two nations.