Approval for Exporting 110 MW of Power to India via Interim Agreement

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522 MW can now be sold in the competitive market and 110 MW through a mid-term agreement in India 

Kathmandu – India has given permission to sell electricity to Nepal through a mid-term agreement. India, which is allowed only in the competitive market, has also allowed the sale of 110 megawatts of electricity for two projects for five years. Along with this, monsoon electricity will be sold uninterruptedly in the Indian market for the next five years.

The Nepal Electricity Authority on Tuesday got permission to sell 110 megawatts of electricity through a mid-term agreement and an additional 70 megawatts in the competitive market.

According to the Nepal Electricity Authority, preparations for export started on Wednesday after getting permission to sell 110 megawatts through a medium-term five-year power purchase and sale agreement (PPA). Prabal Adhikari, director of electricity trade department of the authority, has been given permission to sell the electricity of the 83.42 MW capacity Solukhola (Dudhkoshi) built by Sahash Energy and the 26.19 MW capacity Dordi Khola hydropower project built by Himalayan Power Partner by cutting the transmission line charge by around three percent.

The authority will be allowed to sell the electricity produced during the rainy season from these projects for five years at Rs 8.40 (5.25 IC) per unit. 110 MW sale permission has been received for this year from 5th September to 31st October (19th August to 14th October) due to late approval. From the next year to 2027, from June 1 to October 31, for 5 months, permission has been granted to sell at Rs 8.40. The official informed that the electricity will be sold to Haryana in India through the 400 KV Dhalkebar-Muzaffarpur international transmission line.

The official also mentioned that an additional 70 megawatts approval has been received in the competitive market. Out of this, 70 megawatts will be exported through the Tanakpur-Mahendranagar 132 kV transmission line. In addition to the approved 38.4 megawatts of Upper Kaligandaki and 40 megawatts from Upper Chameliya, these 70 megawatts will be sold in the competitive electricity market. When deducting the transmission line charges in this arrangement, there will be 70 megawatts available. This electricity will be sold in the Indian competitive market, as stated by the authority.

Nepal is selling 452 MW of electricity in the competitive market in the Indian market. With an additional 70, now 522 MW of electricity will be sold in the Indian competitive market. Among the projects that have been approved for sale in India earlier are the 23.28 MW Trishuli Hydropower constructed by the Authority, the 14.55 MW Devghat, the 21.44 MW Chilime Hydropower constructed by the Chilime Hydropower Company and the 22.8 MW Solukhola of the Upper Solu Hydropower Company, the 67 MW Marsyangdi constructed by the Authority. , Kaligandaki A of 140 MW, Madhya marsyangdi of 68 MW and Likhu-4 of 51 MW built by Green Venture Pvt Ltd, Kabeli B-1 of 24.25 MW and Lower Modi of 19.4 MW. Currently, the authority buys water from private hydropower promoters for Rs 4.80 during the rainy season. India’s competitive market is currently fetching higher prices for electricity being sold.

According to the authority, Nepali electricity has started selling at IC 10 (Rs 16) per unit. Due to the heat in India, the demand for electricity is high, and the average price per unit is up to Rs 10.

The Authority has been exporting electricity to India since October/November 2021. For the first time, the sale of 39 megawatts of electricity produced by two hydropower projects was started. In May/June 2022, permission was granted to sell 364 MW electricity from six more projects in the Indian market at competitive rates. A total of 10 projects have already been approved with two more in October/November 2022. On Tuesday, with the approval of 2 more projects, 12 hydropower projects will be allowed to sell electricity in the competitive market.

Just last month, India changed its cross-border electricity trade rules to make it easier for countries with energy trade agreements. The rule has given the facility to make decisions half an hour in advance for the purchase and sale of electricity in the Indian market. Due to the change in the rules, Nepal, Bhutan, Bangladesh and other countries that have energy agreements with India have got the facility to buy and sell electricity in (Real Time) on the Indian Energy Market (IEX). Before that, electricity was sold on the basis of ‘Day Ahead’ in IEX.

Power Trade Agreement passed by India

The Government of India has approved the proposal of a long-term agreement to purchase 10,000 megawatts of electricity from Nepal. India’s cabinet meeting held last week passed a proposal for a long-term agreement to purchase electricity from Nepal. With this, the way has been opened for Nepal to sell 10,000 megawatts of electricity in 10 years.

Last May, during Prime Minister Pushpa Kamal Dahal’s visit to India, an initial long-term bilateral agreement was signed to sell electricity produced in Nepal to India. The agreement could not go ahead because it had to be approved by the Indian cabinet. The initial agreement was signed between the energy secretaries of Nepal and India. But the agreement was not included in the joint statement.

In a joint press conference during his visit to Dahal on June 1st, Indian Prime Minister Narendra Modi announced that he would take 10,000 megawatts of electricity from Nepal in 10 years. Madhu Prasad Bhetuwal, spokesperson of the Ministry of Energy, Water Resources and Irrigation, said that three months after the initial agreement, the proposal for a long-term agreement was passed by the Cabinet of the Government of India.

It has been reported that the Cabinet of India has approved the long-term and mid-term five-year agreement. However, the official letter has not arrived,” he said. “Information will come in the next few days.” Minister of Energy, Water Resources and Irrigation Shakti Bahadur Basnet is preparing to sign the initial long-term agreement with India through a formal program. “We will soon hold a formal program and sign the agreement,” he said.

Shankar Prasad Sharma, the Nepali Ambassador to India, announced on Tuesday that the Indian Council of Ministers has passed the proposal of 10,000 megawatts in 10 years through the social network Twitter. The Cabinet of India has passed an agreement to purchase 10,000 megawatts of electricity within the next 10 years. It can play an important role in the economic development and restructuring of Nepal,” he wrote.

Source: Kantipur