Nepal Electricity Authority (NEA) and the Central Electricity Authority (CEA) of India have agreed to start energy banking by 2019-20. During a meeting of Nepal-India Power Exchange Committee in New Delhi, on July 5 and 6, NEA and CEA had agreed to the concept of energy banking.

The energy banking concept means that when there is surplus energy in one country then electricity will be exported to the other country and vice-versa. If the quantum of energy exchanged is equal then there will be no charges levied. However, if one country exports more electricity to the other then the importing country will have to pay for the additional quantum of electricity.

“We have held discussions on how much electricity will be supplied and in which season it will be done so to each other’s country,” said Prabal Adhikari, spokesperson for NEA. Adhikari had also participated in the meeting.

According to Adhikari, both parties have agreed to prepare the guidelines and modality of energy banking. Many Indian states are practicing energy banking and the meeting has assigned CEA to prepare the guidelines on energy banking in relevance to the condition of Nepal and India.

“The guidelines will be prepared within six months and after that NEA and CEA will have a final discussion on it,” he added.

Meanwhile, NEA expects Nepal’s electricity production to stand at 5,600 megawatts by fiscal 2025-26 by when domestic demand is expected to stand at 3,500 megawatts. Hence, the power utility has plans to export 2,100 megawatts of electricity to India through the energy banking concept.

However, by fiscal 2027-28, Adhikari claims that NEA will be self-reliant and will not have to import electricity from India. By then, he stated that Nepal will be able to produce 15,300 megawatts of electricity and taking the current consumption pattern into account domestic demand will stand at 4,800 megawatts. The government, however, has plans to export 5,000 megawatts of electricity and utilise the remaining quantum domestically by increasing economic activities in the country.

The Nepali delegation in the meeting was led by Kul Man Ghising, managing director of NEA and the Indian team was led by CEA member Prakash Maskey.

Meanwhile, NEA has rejected India’s proposal to hike electricity tariff by 15 to 20 per cent.

As per Adhikari, India’s North Bihar Power Distribution Company had tabled a proposal to revise the price for the electricity imported from India. The Nepali side refused to accept the Indian proposal citing that the price of electricity was already high.

At present, NEA imports electricity from India through various cross-border transmission lines with capacity of 132 kV, 33 kV and 11 kV. NEA pays Rs 8.88, Rs 9.6 and Rs 10.4 per unit for importing power through 132 kV, 33 kV and 11 kV transmission lines, respectively.