Kathmandu, 3 October 2021. Nepal has been allowed to sell electricity at competitive rates in the Indian energy market. With the consent of the Ministry of Power of India, the body approving inter-country electricity trade on Monday allowed the Nepal Electricity Authority to sell electricity in the Indian Energy Exchange Market.
In the first phase, NEA has given permission to sell 39 MW of electricity generated from 24 MW Trishuli and 15 MW Devighat power plants in Nuwakot to the Indian Energy Exchange (IEX).
The electricity generated from the two power plants has been allowed to be sold in the Indian market as a source. NEA will start exporting electricity through Dhalkebar-Muzaffarpur 400 KV interstate transmission line from 12 noon on Tuesday. Currently, only electricity is being imported from this line.
Nepal has already received permission to purchase and import electricity from the Indian Energy Exchange (IEX). NEA has been importing electricity at competitive rate through IEX since April 3 when needed. With the permission to export, electricity trade between Nepal and India has entered a new phase.
Minister for Energy, Water Resources and Irrigation Pampha Bhusal said Nepal has become the first country in South Asia to enter and sell electricity from the Indian Energy Exchange market. “Through continuous efforts at the political, diplomatic and administrative levels, we have been allowed to consume electricity in Nepal and reserve electricity. This is a milestone for energy trade between the two countries,” she said. “We hope to get permission soon to sell the electricity generated from the proposed 456 MW Upper Tamakoshi, 69 MW Marsyangdi and 45 MW Upper Bhotekoshi power plants in the Indian market,” Bhusal said. She said that all stakeholders involved deserved to be thanked.
NEA Managing Director Kulman Ghising said that more bricks have been added to the Nepal-India relationship after the Indian side agreed to export electricity. After a long effort for electricity trade between Nepal and India, the export of Nepal’s electricity to the Indian market has started and a big door has opened for the development of hydropower in Nepal. He said, “Even though the export of electricity has started in small quantities, we are confident that soon the electricity from other projects including Upper Tamakoshil will be exported to the Indian market.”
Nepal will sell electricity in the daily electricity market (Day Ahead Market) under India’s central electricity system. NEA will compete in the bid every day from 10 am to 12 noon with the quantity of electricity sold in the exchange market. The selling rate per unit of electricity will be decided on the basis of market clearing price. Once the competitive rate is fixed, electricity will be exported 24 hours a day from 12 noon to 12 o’clock the next night. When the price of coal increased in India, the price of electricity in the exchange market had reached 28 Indian rupees per unit.
The entire transaction of the exchange market on behalf of NEA will be done by the liaison body for electricity trade with NTPC Vidyut Vyapar Nigam Limited (NVVN). NVVN will send details of daily transactions to NEA at 6 pm every day.