Nepal Electricity Authority achieves over Rs 9.5 billion in electricity sales to India

KATHMANDU: The Nepal Electricity Authority has reported a substantial revenue of more than NPR 9.5 billion from the sale of electricity in the Indian market over a span of three months. During the first quarter of the fiscal year 2080/81 (encompassing July, August, and October), the Authority successfully traded electricity amounting to NPR 9.64 billion and 53 lakhs.

This remarkable figure represents a significant increase of NPR 3.45 billion compared to the same period in the previous fiscal year when electricity sales reached approximately NPR 6.2 billion. In total, the Authority exported electricity worth NPR 11.80 billion and 28 lakhs to India between May and October.

The initiative to sell surplus electricity, particularly generated during the rainy season, commenced on June 28 this year. Notably, during the month of October alone, the Authority exported electricity worth NPR 4.2 billion and 3.5 million.

The Authority asserts that the average rate of electricity exported to India during these three months stands at 10 rupees and 27 paise per unit. The export and import of electricity are conducted through a bidding process in the Indian market.

In May and June, electricity exports to India totaled 405 million rupees and 1 billion 757 million rupees, respectively, with an average rate of 9 rupees and 67 paise per unit, according to the Authority.

In the current financial year, electricity exports amounted to NPR 2.14 billion and 33 million rupees in July, NPR 3.47 billion and 85 million rupees in August, and NPR 4.2 billion and 2.35 million rupees in October. In the prior fiscal year, July, August, and October recorded electricity sales worth 1.94 billion, 2.54 billion, and 1.71 billion rupees, respectively.

In the current fiscal year, the Nepal Electricity Authority has been granted approval to export 632 MW of electricity. This approval has paved the way for the export of NPR 9.64 billion and 53 lakhs in the initial three months.

The average selling price of electricity exported to India in July, August, and October of this fiscal year is 8 rupees and 43 paisa, 11 rupees and 97 paisa, and 10 rupees and 20 paisa, respectively. The collective export of electricity is contributing positively to reducing the trade deficit between Nepal and India and bolstering the country’s foreign exchange reserves.

Kulman Ghising, the Executive Director of the Authority, has expressed optimism that, given the present conditions, Nepal can potentially export electricity worth approximately 16 billion rupees this year. He explained, “We submitted a proposal to the Central Electricity Authority of India for permission to export around 100 megawatts of electricity. As we haven’t received approval yet, we resubmitted the proposal recently.

The festival season has already commenced, during which factories are closed, and the cold season has started in Kathmandu and the Terai. With the end of summer, domestic demand for electricity will decrease. Without the permission to export more electricity from India, there may be a situation where power plants have to be shut down. In this scenario, we are confident of receiving approval to export more electricity soon.”

The Nepal Electricity Authority is selling electricity to the Indian company NTPC Vidyut Vyar Nigam Li-NVVN through competitive processes in the day-ahead market and, for some time, under the medium-term power agreement.

The Central Electricity Authority of India has also allowed the sale of about 44 MW of electricity in the real-time market, out of the total approved export capacity of 522 MW to the competitive market in the initial phase. The Nepal Electricity Authority has obtained approval to export 522 megawatts to the competitive market and an additional 632 megawatts to NVVN, totaling 110 megawatts.

Of these, 562 MW of electricity is exported through the Dhalkebar-Muzaffarpur 400 KV international transmission line, and 70 MW is transmitted via the Mahendranagar-Tanakpur 132 KV transmission line.

Notably, Nepal, which initially only sold electricity in the competitive market, received permission in mid-August to export through the medium-term agreement, thus expanding avenues for selling electricity in the competitive and mid-term markets.

In contrast, India, which was initially allowed only in the competitive market, permitted the sale of 110 megawatts of electricity for two projects for a five-year period, further enhancing electricity exports through mid-term agreements. The Authority had received approval for the export of 522 MW in the competitive market and 110 MW to the state of Haryana through NVVN.

Various projects have received permission to sell electricity in the interim period, such as Solukhola and Dordi Khola. By reducing the transmission line charges by approximately three percent, the 83.42 MW Solukhola (Dudhkoshi) project, developed by Sahash Energy, and the 26.19 MW Dordi Khola hydropower project by Himalayan Power Partner have been authorized for sale for five years under this agreement.

These projects will be permitted to sell electricity generated during the rainy season at 8 rupees and 40 paise per unit. Due to the delayed approval, the permission for the sale of 110 MW extends from September 5 to October 31 in the current year. Starting from next year and lasting until 2027, they will be allowed to sell electricity from June 1 to October 31 (five months) at 8 rupees and 40 paise.

Several other projects have been approved for sale in India, including the 23.28 MW Trishuli Hydropower project constructed by the Authority, the 14.55 MW Devighat, the 21.44 MW Chilime Hydropower project developed by the Chilime Hydropower Company, and the 22.8 MW Solukhola by the Upper Solu Hydropower Company.

Other approved projects include the 67 MW Marsyangdi project constructed by the Authority, Kaligandaki A at 140 MW, Madhyamarsyangdi at 68 MW, and Likhu-4 at 51 MW, operated by Green Venture Pvt Ltd, Kabeli B-1 at 24.25 MW, Lower Modi at 19.4 MW, and the latter two projects of Upper Kalangad at 38.4 MW and Upper There’s jasmines at 40 MW.

Currently, the Nepal Electricity Authority purchases electricity from private hydropower producers at a rate of Rs 4.80 per unit during the rainy season. The Authority commenced exporting electricity to India in November 2018, beginning with the sale of 39 megawatts produced by two hydropower projects.

In May 2079 BS, approval was granted to sell 364 megawatts from six more projects in the Indian market at competitive rates, with a total of 10 projects approved and two more in October 079. This plan encompasses the sale of electricity generated by 14 hydropower projects in the competitive market, two in the mid-term market, and two for later use.