KATHMANDU, July 16

    The government, that has been currently importing up to 300 MW from India, aims to export 5700 MW to the southern neighbor within five years. But the government plan looks likely to fail looking at its preparations and the state of the hydropower projects under construction in the country.

    It aims to sell 5700 MW to India by 2021/22. Nepal, that has been dreaming about selling electricity to India signing power trade agreement (PTA) since 1997, aims to sell 24900 MW by developing 282 projects in the next 20 years. The target for selling electricity has been set as per the Cross-border Transmission Master Plan approved by the secretary level body formed to implement the PTA between the two countries.

    Nepal will sell surplus 5700 MW during off-peak hours (after midnight) during the monsoon season after five years as per the target. Similarly, Nepal aims to export 4500 MW during the peak hours in the rainy season and 500 MW during the peak hours of dry season. The government plans to complete 168 hydropower projects during the period.

    Current installed capacity of Nepal is just 780 MW, according to the Nepal Electricity Authority (NEA). But the peak demand has reached up to 1400 MW. The master plan mentions generating 13200 MW by completing another 61 projects by 2025 and selling 24900 MW to India by completing another 53 projects by 2035. The target, however, does not include the 10800 MW Karnali Chisapani Project, considered the biggest project in Nepal, and 3240 MW Pancheswor Multi-purpose Project.

    Acting Secretary and Spokesperson at the Ministry of Energy Dinesh Ghimire claimed that the aim is not baseless. He insisted that the plan to sell electricity from 2021 has been formulated after analyzing the state of export-oriented and under-construction projects. “We have mentioned the plan to sell electricity to India in the master plan after analyzing the state of generation in Nepal. We can sell,” he added. He pointed that the first cross-border transmission line, Dhalkebar-Muzaffarpur, has already been completed and the second one, New Gorakhpur-Butwal, will be completed by 2018, and the electricity will be sold using these transmission lines.

    PPA for 2920 MW

    The NEA has signed power purchase agreement (PPA) for 2920 MW until now. It has yet to sign PPA for projects with combined installed capacity of 5600 MW out of the applications for generation license for 75 projects (6122 MW) made with the Department of Electricity Development. “Demand for electricity has been rising by almost 200 MW every year. But generation hardly increases by 30-40 MW,” former water resource secretary Shital Babu Regmi said. “How can we sell electricity when we have daily load-shedding of up to eight hours even during the rainy season and 14 hours during the winter?” he asked.

    Experts argue that it will be hard to increase installed capacity to 6900 in five years when the country does not even generate 1000 MW now. “There are many difficulties to sell electricity. India may have given many assurances but practically there is no situation to sell electricity,” former vice chairman of the National Planning Commission (NPC) Dipendra Bahadur Chhetri said.

    Nepal has not formulated any commercial strategy to sell electricity, acting Energy Secretary Ghimire conceded. “We are now trying to resolve technical issues between the two countries. We have not prepared commercial strategy. The ministry will now also pay attention toward that,” he assured.

    No preparation for export

    Experts say there is almost no preparation to sell electricity to India. Power Trading Company has not been established to trade electricity with India. The ministry, however, said it has already prepared article of association and regulations for that. Similarly, there is also uncertainty about cross-border trading regulation mechanism, transmissions structures, cross-border investment modality, cross-border capacity booking, market of electricity, price and other issues related to sale of electricity to India.

    Nepal and India had signed PTA in 1997 but that was not ratified by the parliament, and it was again signed in 2014 paving the way for bilateral trade of electricity.

    Obstructions/deficiencies in trading of electricity

    Power Trading Company

    Cross-border trading regulation mechanism

    Transmissions structures

    Cross-border investment modality

    Cross-border capacity booking

    Market and price of electricity

    Campaign against selling electricity

    Source : Karobar Daily