India may not buy electricity only in rainy season

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    ” NEA and many projects may be affected “

    KATHMANDU, March 12

    The Power Trading Corporation (PTC) India Limited has hinted that it will not procure electricity from Nepal only during the rainy season.

    PTC has showed such intent after Patel Energy Resource of India proposed to sign power purchase agreement (PPA). Patel Energy is preparing to develop 130 MW Budi Gandaki A and 260 MW Budi Gandaki B through Naulo Nepal Hydroelectric Company. Patel Energy had proposed to sell electricity to PTC after the Nepal Electricity Authority (NEA) refused to sign PPA. “PTC during discussions expressed intention to not procure electricity only during the rainy season. It has hinted to buy only if it is supplied round the year,” manager of the project Ananda Chaudhary said. He, however, clarified that PTC has not made written response to that regard. “We have found that it is not in mood to buy electricity only in one season,” he added and reasoned that PTC may have hesitated as the rate of electricity in India during the rainy season is low.

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    The attitude of PTC is not set to affect just Patel Energy but NEA and others who wish to sell electricity only during the rainy season. “The promoters exporting to India must look for alternatives. There is also need for power trade agreement (PTA) between the two countries,” he opined. But India has not agreed to sign PTA though Nepal has been proposing since four years. There are also other companies for mediating power trading in India including Tata, Bihar Electricity Board, Uttar Pradesh Board and others apart from PTC. He claimed that other companies may agree to buy even if PTC were to refuse.

    Many export-oriented projects will face problems if electricity cannot be sold only during rainy season. Promoters of five projects have proposed to sell electricity to NEA during the five months of dry season and are depending on export to India for the rest of the year. He expressed fear that it has raised possibility of the projects not being constructed at all. Banks and financial institutions invest on projects only after signing PPA.

    Only five projects with combined installed capacity of 1724 MW have submitted proposals when NEA had sought proposals from export-oriented hydroprojects to address the energy demand during the dry season six years from now. Over two dozen foreign promoters have taken license for construction of hydropower projects in Nepal but big renowned companies have not showed interest.

    Proposals have been submitted by 440 MW Tila I and 420 MW Tila II, developed jointly by KSK Energy of India and SC Power, Nepal, 282 MW Manang Marsyangdi, 182 MW Upper Marsyangdi, and 400 MW Lower Arun to be developed by Brass Power, Brazil. They have demanded that PPA should be signed to buy electricity in US dollar until completion of the payback period.

    NEA, on the other hand, has projected that around 800 MW of electricity will be wasted after 10 in the night to six in the morning from the rainy season of 2018 even though load-shedding will continue during the dry season as almost all the projects are run of the river (ROR) types. NEA has projected that electricity will be wasted for six months during the rainy season even though demand were to rise to 2000 MW after four years. But NEA is not looking for a market even though such a huge quantity of electricity will be wasted. Nepal is currently importing 200 MW from India to limit load-shedding to 12 hours a day.

    NEA has already determined a base rate for the first time to procure electricity from export-oriented projects at up to Rs 10.60 per unit during five months of the dry season (December to April). Such base rate has been set for the first time by NEA.

    Source : Baburam Khadka / Karobar Daily