Kathmandu — Solar energy promoters have stated that the Water Resources and Irrigation Department has not issued a recommendation letter confirming that the proposed solar power project’s survey and construction area do not fall within irrigable land, national parks, or conservation areas. According to the project plan, a letter was sent to the department, but even after a month, the solar energy promoters have not received a response.
The promoters state that although the Grid-Connected Alternative Energy Development Procedure, 2022 specifies that the letter should be issued by either the Irrigation Department or the provincial ministry, the Department of Electricity Development has requested letters from both.
The Department of Electricity Development has stated that both letters were requested because the central government has information about completed and ongoing irrigation projects under Water Resources and Irrigation, while the provinces have information about their respective projects. The department also mentioned that the delay in issuing the recommendation letter is due to inconsistencies between the provisions of the Grid-Connected Alternative Energy Development Procedure and the Irrigation Master Plan (Updated 2024).
On January 7 (Nepali calendar), a meeting chaired by the Director General of the Irrigation Department, Devaraj Niraula, decided to request the ministry for necessary guidance regarding the issuance of a recommendation letter. The decision was made due to uncertainty about issuing the recommendation, as required by the Grid-Connected Procedure, to confirm that the proposed project area does not include irrigable land.
“The Grid-Connected Alternative Energy Development Procedure, 2022 and the Irrigation Master Plan 2019 (Updated 2024) were approved on June 24 . According to the approved procedure, the recommendation should be based on land that can be irrigated by completed and ongoing irrigation projects,” the decision states.
“As the approved Irrigation Master Plan designates irrigable land, uncertainty has arisen regarding whether the department can issue a recommendation for purposes other than agricultural use—specifically for solar power project surveys and construction under the provisions of the Grid-Connected Alternative Energy Development Procedure, 2022. Therefore, a request has been made to the Ministry of Energy, Water Resources, and Irrigation for necessary guidance.”
The Director General of the Water Resources and Irrigation Department, Devaraj Niraula, stated that a letter has already been sent to the ministry for a policy decision, as there is uncertainty about how to issue the recommendation under the provisions of the existing procedure and master plan.
“We were uncertain about issuing the letter to the promoters based on the provisions of the procedure and master plan, so we have already sent a letter to the ministry. However, we have not received a response yet,” said Niraula. “We must follow the existing laws and regulations. Once the ministry sends a reply, we will proceed accordingly.”
The Irrigation Department is waiting for the ministry’s response. Sarita Dawadi, Secretary of the Ministry of Energy, Water Resources, and Irrigation, stated that there has been some delay because the concerned Joint Secretary is currently on a field visit.
The department had sent a letter for further clarification, but there was a slight delay as the Joint Secretary was on a field visit,” Niraula said. “We will send the letter to the department within 2–3 days. It is the department’s responsibility to issue the recommendation.”
Solar energy promoters state that due to the Irrigation Department’s failure to issue the recommendation, they have been unable to obtain the survey permit, preventing them from participating in the Power Purchase Agreement (PPA) process within the timeframe set by the Nepal Electricity Authority (NEA).
Even though the letter has been submitted to the Irrigation Department, they have not issued the recommendation, while the Department of Electricity Development refuses to grant the survey permit without that letter,” said the promoters. “We must submit the survey permit and deposit by Falgun 15 to the Nepal Electricity Authority to proceed with the next steps. If we miss the deadline, the earlier deposit might be forfeited.”
According to the Department of Electricity Development, 33 projects with a total capacity of 683.7 megawatts applied for survey permits between April 24 and January 27. However, none of the promoters have received a survey license so far. The Director General, Naveenraj Singh, explains that the permits have not been issued because the necessary documents and procedures for obtaining the survey permit (license) have not been completed.
“The documents and procedures required for the survey permit (license) have not been completed, which is why the permit has not been issued,” he said. “Once the process is completed, the permit will be issued. There is no reason not to issue the permit.”
The Nepal Electricity Authority (NEA) had called for proposals for 800 megawatts of solar energy in last Chait. In response, 134 companies submitted proposals totaling 3,600 megawatts. After technical evaluation, only 127 companies with a total of 3,492.5 megawatts were eligible for the financial proposal stage. From the financial proposals opened in Oct/ Nov 2024, only 63 companies with a total of 960 megawatts were selected. The selection for the Power Purchase Agreement (PPA) was based on the lowest price and the capacity of the substations.
When calling for proposals, it was stated that more than 20 percent could be selected, according to Dhakal. Accordingly, 63 companies with a total capacity of 960 megawatts were selected for the Power Purchase Agreement (PPA).
The Nepal Electricity Authority (NEA) had issued a letter of intent to the selected companies on Mangsir 14. Within 90 days of the issuance of the letter of intent, i.e., by Falgun 15, the selected companies must submit the survey permit to the NEA with a deposit of 6 lakh rupees per megawatt. The NEA and the selected companies must reach a conclusion on the Power Purchase Agreement (PPA) draft by Chait 1.
The Nepal Electricity Authority (NEA) issued a letter of intent to the selected companies on Mangsir 14. The selected companies are required to submit the survey permit to the NEA by February 27, with a deposit of 6 lakh rupees per megawatt. Additionally, the NEA and the selected companies must discuss and reach a conclusion on the Power Purchase Agreement (PPA) draft by March 14.
The NEA must complete the Power Purchase Agreement (PPA) with the selected companies within one month after the companies have submitted the performance security. However, according to Rajan Dhakal, the head of the Electricity Trading Department of the NEA, the selected promoters have not yet submitted the survey permits to begin the electricity sales agreement process.
“By 90 days from the issuance of the letter of intent, they must submit the survey permit along with the deposit,” he said. “So far, no one has come forward. There is still time left.”
According to the tender call made by the NEA for 25-year Power Purchase Agreements (PPA), projects smaller than 10 megawatts must provide electricity within 18 months, while larger projects must do so within two years. The NEA called for proposals to meet the increasing electricity demand in the Terai load centers and to maintain a balance in electricity supply.
The NEA has selected solar projects to sign Power Purchase Agreements (PPA) near the 200 kV, 132 kV, and 33 kV substations that are under its ownership. While it takes a long time to build hydroelectric projects, solar projects can be operational within one to one and a half years, making solar energy a priority to meet the increasing electricity demand during the winter season by integrating it into the grid.
The 963rd meeting of the NEA set the maximum base rate for purchasing electricity from solar projects at 5 rupees 94 paisa per unit through the electricity competition process.
Source: Kantipur
