Solar power purchase through competition


Kathmandu, 24 January 2022. The Nepal Electricity Authority (NEA) has decided to purchase power from the solar plant through competition. A meeting of the NEA Board of Directors chaired by Minister for Energy, Water Resources and Irrigation Pampha Bhusal on Sunday has decided to do PPA of Solar through competition.
Minister Bhusal said that the decision has been taken to make the energy produced from solar accessible, competitive and transparent through PPA competition. He said, “In order to provide electricity to the people at concessional rates, we have to make the purchase of electricity competitive and transparent. We have started it through solar.”
Stating that the cost of power generation from solar is decreasing according to the latest technology, Bhusal said, “According to the previous decision, the PPA rate of solar should have been reviewed in three years.”
In order to make the electricity tariff universally accessible, it has been decided to do PPA through competition keeping in view the international practice, public demand, balance of electricity demand and supply and the essence of the prevailing law.

From now on, PPA of electricity generated from solar projects will be done within the perimeter of 10 percent of the total connected capacity in the national grid as per the concept of production amalgamation of power projects.

Earlier, the procurement rate for alternative solar and wind energy was fixed at Rs 7.30. It was decided that the rate would be maintained for the project for which the power purchase agreement would be concluded within a maximum of three years.

The decision of the Ministry was implemented by the decision of the Board of Directors of NEA from the 773rd meeting held on July 10, 2018.
The three-year rate has not been revised yet. Currently, the price of electricity generated from solar projects is continuously declining in the international market due to the latest technologies.
NEA has so far signed PPA of 110 MW with 21 solar projects. Out of this, 6 projects have been completed and 29 MW has been connected to the national transmission grid.