NEA signed PPA for 444MW electricity last fiscal year

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    KATHMANDU, SEP 02 –

    The Nepal Electricity Authority (NEA) signed power purchase agreement (PPA) with 23 projects for 444MW electricity in the last fiscal year.

    As per the initial commitment of developers, these projects will come into operation by 2017. Among the projects signing the PPA are Rasuwagadhi (111 MW), Middle Bhotekoshi (102 MW), Lower Sanjen (42.5 MW), Upper Sanjen (14.8 MW) and Lower Modi (20 MW). However, these projects are not going to make a big difference, especially during winters, as all of them are run-of-the-river type projects.

    Nepal’s electricity demand has been rising at a rate of 100MW a year and the demand for this year has been forecast to exceed 1,100MW. As most of the hydropower projects are run-of-the-river type, the country will have surplus electricity during the rainy season and face shortage during winters.

    NEA Power Trade Division Director Sher Singh Bhat said Nepal would not face load-shedding during the rainy season after these projects come into operation in the next five years. “However, winters will continue see power shortage,” said Bhat.

    NEA officials say the country will have a total installed capacity of 2,960MW in the next five years, against the projected demand of 1,640 MW.

    According to Bhat, there will be a loss of 4 billion units of energy during the rainy season. And, NEA has to pay the developers even for the leakage as per the PPA conditions. “Based on the current PPA rate of Rs 5 per unit, NEA will lose Rs 20 billion a year,” Bhat said.

    Energy Ministry officials underscored the need for a detailed energy plan to utilise the power generated by these projects. “Leakages will lead NEA to bankruptcy,” said Moti Bahadur Kunwar, joint secretary at the energy ministry. “A proper planning on the energy sector is very important. We also need more reservoir projects.”

    Source : EKantipur