A delegation of the Solar Power Producers’ Association, Nepal (SOPPAN), led by President Dr. Sandip Shah, met Mr. Dirghayu Kumar Shrestha, Managing Director of the Nepal Electricity Authority (NEA).The delegation congratulated him on his appointment and wished him success in his role.
At the meeting, SOPPAN formally submitted its collective recommendations for NEA’s next solar energy auction. The recommendations follow a review of the RFPs and the regulatory execution of the past two auctions. They aim to make Nepal’s solar sector more sustainable, bankable and robust.
Key recommendations
• Tariff: a lower benchmark (floor) tariff of NPR 5.45 per unit, alongside the NPR 5.94 cap, to deter unfeasibly low bids and stalled projects. Annual escalation, typically 3% as in hydropower PPAs, on solar and battery storage tariffs.
• Auction design: proof of readiness for at least 10% of the required land before bidding, clear limits on changes to project boundaries after award, and technical eligibility based on solar experience rather than hydropower experience.
• Solar-specific PPA: a PPA template and Contract Energy Table designed for solar and accounting for module degradation, annexed to the RFP, with NEA honoring the Take-orPay principle for all energy dispatched.
• Battery storage (BESS): storage allowed at the plant or at NEA grid substations, with a fixed NPR 12.40 per unit tariff proposed for plant-end storage and a tariff for substation storage to be set with the ERC before the auction.
• Long-term viability: PPA and generation license terms extended to 50 years, and support for non-recourse project financing through Nepal Rastra Bank.
• Tax and stability: permission for IPPs to pass through VAT on electricity supplied to NEA, and bidding rules, tariffs, tax policies and compliance procedures fixed before the auction announcement and unchanged through commissioning.
SOPPAN thanked Mr. Shrestha for his time and reaffirmed its commitment to working with NEA to help Nepal reach its renewable energy targets and strengthen energy security.
Businesspana