NEA waives hydrology penalty under 10 MW projects


Kathmandu. Nepal Electricity Authority (NEA) has decided to give hydrological penalty exemption to 1 to 10 MW hydropower projects. A meeting of NEA’s board of directors held on Sunday has decided to waive the penalty.

NEA’s decision will provide relief to more than 80 projects of 1 to 10 MW. NEA has been paying hydrological penalty to small hydropower projects that have not been able to generate as per the power purchase agreement (PPA). According to the data provided by the Independent Power Producers Association (IPPA), the generation of projects up to 10 MW is about 139 MW.

The Electricity Regulatory commission(ERC) had directed to cancel the penalty in Falgun 2076 BS. But NEA was ignoring the directive. The NEA has decided to give exemption after the commission wrote again on Jestha 9 asking them not to penalize them.

IPPAN Vice President Ganesh Karki said that such a decision of NEA would bring great relief to small projects. ‘Projects have been built on small rivers. Although there is no problem in the rainy season, hydrology forecast is not available in winter, ‘he said.’ Most of the projects were forced to pay penalties. Now they get paid according to the production. ‘ Most of the projects are not in the snow feed river but in small rivers, so the production has decreased in winter. About 90 percent of the projects in operation were forced to pay penalty.

Karki said that there is a problem of making an agreement after many years and paying a penalty if the estimate is not met. According to him, small projects have been facing more problems due to the NEA imposing double penalty.

With this decision of NEA, the small company will be paid in proportion to the amount of electricity generated. “If NEA can give as much production as it can, it will have to do forecast. That should be done too ‘, Karki said,’ This decision will save small projects. They can repay interest and loans in detail. ‘ He claims that this will play an important role in improving the financial condition of small projects.

NEA had been imposing penalty saying that there would be inconvenience in the load system. Penalties were introduced for projects up to 10 MW from 2072 BS. Six years later, the rule is being lifted.