KATHMANDU, Sept 5:Hydropower experts and entrepreneurs have welcomed the Power Trade Agreement (PTA) between Nepal and India which was signed in New Delhi on Thursday.
The much-awaited agreement not only opens Nepal´s energy market, but is also expected to expedite development of stalled products, according to experts.
Khadga Bahadur Bisht, president of Independent Power Producers´ Association, welcomed the bilateral agreement, saying that it has not only opened up Indian market for Nepali hydropower but has also paved the way for Nepali and Indian developers to jointly invest on hydropower generation and energy trading company.
“Not that the agreement has been signed, construction of many stalled projects, particularly large export-oriented projects, will resume,” added Bisht.
Due to market uncertainties, many projects like West Seti and Lower Arun, among others, have remained stalled since many years.
“Now developers do not have to wait to sign Power Purchase Agreement (PPA) with Nepal Electricity Authority (NEA). Once PTA comes to effect, they can sign PPA with any trader in the market,” Pashupati Murarka, senior vice president of the Federation of Nepalese Chambers of Commerce and Industry (FNCCI), told Republica.
NEA has turned down PPA proposal or deferred signing of such agreement with many projects, making such projects uncertain, in anticipation of energy surplus after 2017.
As per the provision in PTA, licensed traders of both countries can participate in energy trading. This means NEA´s monopoly in energy trading in Nepal will end once PTA comes into implementation.
Energy expert Surya Nath Upadhyaya also said PTA has prepared the base for Nepal to enter India´s huge energy market. “There still is lot more to do. One has to see how they (concerned officials) work in that direction,” added Upadhyaya.
Market assurance has also provided the ground for developers to design projects by making maximum utilization of water resources. “At present, projects are developed on Q40 model. Now, now projects can be designed on Q30 or Q20 models in order to generate electricity to the fullest even during wet months. This will also bring down project development cost,” Balananda Paudel, former energy secretary, said.
Q20 model means project that run to its full capacity for 20 percent of the year.
At present, NEA does not sign PPA with projects lower than Q40 design discharge fearing dump of energy in wet season.
“Energy supply system will be reliable by the import of electricity during dry months and exporting while there is energy surplus in wet months,” Paudel said, adding that connection with larger system in synchronization is a tremendous achievement.
Besides, experts have said that provision on market extension in the sub-regional and regional level mentioned in the agreement will also open the market of Bangladesh for energy generated in Nepal.
Source : Republica
