Kathmandu: The Independent Power Producers’ Association, Nepal (IPPAN) has proposed 19 amendments to the Nepal Electricity Authority’s (NEA) draft guidelines on grid connection points and voltage level changes, arguing that the current provisions could impose unilateral risks and additional financial burdens on power producers.
The amendment proposals were presented during a discussion held after an IPPAN delegation led by its Chairman Mohan Kumar Dangi congratulated and extended best wishes to NEA’s newly appointed Managing Director Dirghayu Kumar Shrestha and Chief of the Electricity Trading Department Kamal Acharya.
During the meeting, IPPAN urged the authority to ensure a fair allocation of risks between power producers and the grid operator regarding issues such as delays in transmission infrastructure construction by the NEA or other government agencies, changes in connection points, RCOD/COD provisions, grid impact studies, transformers, and transmission losses.
IPPAN has also called for the removal of the proposed provision requiring a project to achieve at least 30 percent physical progress before being eligible for a change in connection point or voltage level. According to the association, if such changes become necessary due to the NEA’s transmission planning or transmission infrastructure development, forcing developers to complete 30 percent of construction beforehand would create unnecessary costs and increase the risk of project redesign.
Similarly, IPPAN has sought the removal of the provision that allows a connection point or voltage level to be changed only once. It argued that natural disasters such as floods, landslides, earthquakes, or damage to transmission infrastructure could require multiple changes to a project’s connection arrangement. Therefore, the association has proposed allowing additional changes when justified by technical reasons.
IPPAN further stated that the provision permitting connection-point changes when transmission infrastructure under the NEA’s responsibility is not completed on time should also cover delays by other government agencies or entities responsible for transmission infrastructure development. In particular, it said that clear provisions for alternative grid connections should be included if substations or transmission lines under the responsibility of the National Power Grid Company Limited (RPGCL) are not completed on schedule.
The association also emphasized that if delays in transmission infrastructure construction under the responsibility of the NEA or the grid operator prevent a project from being connected to the grid on time, necessary adjustments should be made to the project’s RCOD/COD. Such delays, it suggested, should be treated as contractual relief events or force majeure situations, with provisions for compensation or deemed generation payments.
IPPAN Seeks Retention of GIS/GCA Priority
IPPAN has also demanded that hydropower projects retain their original GIS/GCA priority if a connection point change becomes necessary due to the NEA’s transmission planning or broader system requirements. The association argued that changing a project’s priority based on a new connection point could unfairly cause developers to lose their existing queue position, even when the change was mandated by the authority itself.
The association has further called for a review of the provision that deducts 1 percent of metered energy as transformer loss for every voltage transformation stage. IPPAN argued that the actual technical losses of modern transformers can be determined based on manufacturers’ guarantees, test certificates, and prevailing technical standards, making a uniform 1 percent deduction inappropriate for all transformers.
IPPAN also suggested that transmission losses in shared transmission systems should be allocated on a proportional or system-wide basis, rather than placing the entire burden of transmission losses on a single project.
Calls to Waive Capitalization Costs for Operating Projects
IPPAN stated that if the voltage level of an operating project must be changed due to grid planning or system requirements, developers should not be required to bear the capitalization costs of existing grid assets owned by the NEA, including transformers and switchgear.
However, the association said that the costs of any additional infrastructure required for new connections or for the developer’s own operational needs could be determined and charged separately.
IPPAN has also sought the removal of strict criteria requiring a new substation or transmission-line connection point to be located within a fixed distance of the existing connection point. According to the association, connection-point decisions should instead be based on grid impact studies, power-flow studies, N-1 contingency analyses, and the long-term requirements of the power system.
In addition, IPPAN has recommended prioritizing alternative connectivity options for small hydropower projects with capacities below 10–15 MW. Where technically feasible, such projects should be allowed to connect through 33 kV lines or other suitable lower-voltage networks.
IPPAN Seeks Removal of Mandatory Repeat Grid Impact Studies
IPPAN has also called for amendments to the Nepal Electricity Grid Code, 2080, particularly regarding the requirement for repeat Grid Impact Studies (GIS). Its primary demand is that a new GIS should not be mandatory when a project’s delivery point remains unchanged.
The association stated that minor modifications to existing connection facilities should not require a repeat GIS unless they are likely to have a significant impact on the performance of the national grid. According to IPPAN, requiring a new GIS for every modification adds unnecessary time and costs to project development. It therefore recommends making such studies mandatory only when the proposed changes are expected to have a material effect on grid operations.
Calls for Cooperation on PPAs and Transmission Infrastructure
IPPAN Chairman Mohan Kumar Dangi said the association is ready to work closely with the Nepal Electricity Authority to create a more supportive policy environment for the development of the energy sector.
Noting that power purchase agreements (PPAs) have remained stalled for years despite the government’s ambitious electricity generation targets, Dangi urged the authority to immediately reopen the PPA process.
He also said that damage to transmission infrastructure caused by the recent Bhotekoshi floods has disrupted power evacuation, and stressed the need for cooperation to arrange alternative transmission lines and bring privately developed power projects into operation as quickly as possible.
IPPAN Senior Vice Chairman Uttam Blon Lama emphasized the need to review PPA provisions in a way that does not create additional financial liabilities for the NEA while remaining bankable for private-sector investors.
He further argued that allowing the private sector to engage in electricity trading would reduce the financial risk burden on the NEA and enable private developers to secure their own markets for electricity sales.
Lama also requested the authority to grant a final extension to projects categorized under RCOD groups A, B, C, and D.
Meanwhile, IPPAN Vice Chairman Him Pathak said that issues related to the Ministry of Forests and Environment and the Securities Board of Nepal are common challenges for both the private sector and the NEA, and called for greater cooperation to address them.
IPPAN Vice Chairman and Coordinator of the Nepal Electricity Authority Coordination Committee, Uttarkumar Shrestha, said that difficulties in arrangements related to substations where private-sector projects connect to the grid could create challenges for the transmission system itself.
He noted that the draft guidelines on connection points prepared by the NEA do not adequately address many practical issues faced by private-sector developers and urged the authority to give greater attention to those concerns.
IPPAN Secretary Suman Joshi said energy entrepreneurs should be viewed not through a political lens but as partners in the country’s economic development.
NEA Managing Director Dirghayu Kumar Shrestha said the authority would review the suggestions submitted by the private sector regarding the grid connection guidelines. He expressed a commitment to inviting IPPAN representatives for joint discussions, if necessary, to reach mutually acceptable solutions.
Regarding the extension of RCOD deadlines, Shrestha said that some processes have already moved forward based on project classifications, while decisions on the remaining issues would be made after further discussions.
He also informed that a proposal to reopen Power Purchase Agreements (PPAs) for projects of up to 10 MW capacity has been submitted to the NEA Board of Directors. According to him, the board has formed a committee to study which regions, transmission corridors, or projects should be prioritized, and further action will be taken based on the committee’s recommendations.
Shrestha added that the process for Grid Connection Agreements (GCAs) is also moving forward. While most procedures have already advanced, he noted that any review of PPA rates should also ensure the long-term sustainability of the NEA. He said PPAs could be revised on a “win-win” basis that benefits both the private sector and the authority.
He further stated that the NEA has already begun work to rebuild transmission infrastructure damaged by flooding in the Matatirtha area. Survey work and tower siting for a transmission line connecting Matatirtha to the Chilime Hub are currently underway. However, he emphasized that the government’s prompt facilitation is now needed, particularly for forest clearances and land acquisition processes.
NepalPurbadhar
