Nepal Awaits India’s Nod for Real-Time Energy Market Access: Power Dynamics Unveiled

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NEA says it has already applied for approval through NTPC Vidyut Vyapar Nigam Limited.

Nepal has been waiting for India’s approval to join the real-time energy market since the southern neighbour opened its doors for its neighbours, including Nepal, to the market in late July, a senior Nepal Electricity Authority official said on Monday.

The southern neighbour has currently allowed Nepal to participate in the day-ahead market where the power’s quantum and prices are determined a day ahead of trading. India has also started buying power from Nepal under a medium-term five-year power deal.

As requested by Nepal, India granted Nepal as well other neighbours such as Bhutan and Bangladesh access to its real-time power market by amending the ‘procedure for approval and facilitating import/export (cross border) of electricity by the designated authority’ issued in February 2021.

But the neighbouring countries have to take the approval of the Indian authorities to start trading in the real-time market (RTM).

“We have already sought approval from Indian authorities for participation in the real-time power market through NTPC Vidyut Vyapar Nigam Limited [NVVN],” said Prabal Adhikari, power trade director at the NEA.

The NVVN is India’s nodal agency for bilateral electricity trade with its neighbours.

“We await the approval from Indian authorities for participation in the real-time market along with the day-ahead market (DAM). I am not sure when the Indian authorities would grant us approval for this,” Adhikari added.

The amendment notice issued on July 31 states that any Indian power trader, on behalf of any entity of a neighbouring country, may trade at Indian Power Exchanges (DAM/RTM/Both DAM and RTM segment) after obtaining approval from the designated authority up to the specified quantum (megawatt) and duration.

This amendment opened the doors for participation in both DAM and RTM.

Earlier, the option of giving access to the real-time market was kept open, but no provision for it had been guaranteed.

Nepal had been seeking access to the real-time market in order to avoid wastage of electricity especially during the rainy season when Nepal’s hydropower projects operate at full potential.

“The Nepal Electricity Authority may benefit from RTM, both in the import and export of power when there is a sudden rise or fall in demand,” Adhikari had previously told the Post. “It can be beneficial even when a sudden outage takes place at a certain power project.”

The quantum of electricity generated by Nepal’s hydropower projects varies significantly as most of the hydroelectric projects in the country are run-of-river type and their generation capacity depends on the level of water in the rivers.

Adhikari said based on the template of the application, Nepal could sell power generated from a single project in both the day-ahead and the real-time markets.

When there was access to only the day-ahead market, Nepal would be forced to sell committed power to the buyers even when the country faced power outages due to disruption in the power supply system within the country.

Even though the country is yet to participate in the real-time market, Nepal has been selling power in the day-ahead market and the country has also started selling power under a five-year power deal since early September following an approval from the southern neighbour. As per this arrangement, Nepal can sell power from two select projects for five years without any hiccups.

According to the NEA, power generated by Solu Khola (Dudhkoshi) and Dordi Khola projects is being sold under a five-year-long power sale agreement signed with India’s NVVN. “We are selling 110 megawatts of electricity under a five-year deal,” said Suresh Bhattarai, the NEA spokesman.

The NEA sells power through the Dhalkebar-Muzaffarpur Cross-Border Transmission Line. India, in early April, had also allowed the sale of 70MW power generated by the Upper Chameliya Hydropower Project as well as by the Upper Kalanga Gad Hydroelectric Project in the day-ahead market. Nepal can now sell 522.6MW of power in India’s day-ahead market.

“After the latest approval from the Indian side, the issue of power spillage has largely been addressed for this year,” said Bhattarai. “Partial power spillage is still taking place because of a lack of transmission infrastructure in certain areas.”

Source: The Kathmandu Post