The Nepal Electricity Authority will be allowed to import electricity from India for only 12 hours a day starting Sunday to meet domestic demand.

Currently, Nepal has been importing electricity for 20 hours a day, but from Sunday onwards, the import duration will be limited to just 12 hours.

During winter, the flow of water in rivers and streams decreases, leading to reduced electricity generation. To meet domestic demand, electricity is imported from India.

Last November-December, when India granted permission for electricity imports during the winter season, it allowed imports for 20 hours a day until March 15. From March 16 to June 30, imports were permitted only during solar hours (6 AM to 6 PM).

Nepal Electricity Authority’s Managing Director, Kulman Ghising, stated that India has been requested to allow electricity imports for 20 hours a day beyond March 16.

“We have requested India to extend the provision that comes into effect from March 16, and discussions are ongoing,” said Ghising. “India’s Ministry of Power has stated that they will discuss and provide further information.”

He mentioned that the discussions with India have been positive, and approval is expected. Ghising also stated that due to the lack of reservoir-based projects, Nepal will have to rely on electricity imports from India during winter for a few more years.

The Nepal Electricity Authority has stated that a new tariff has been set, allowing Nepal to import electricity as needed. This tariff will apply to both imports from India and exports to India.

The PEC meeting held on February 13, 2024, has already determined the per-unit electricity rate for the fiscal year 2025/26.

The meeting has set the electricity import-export price at NPR 8.1 per unit (NPR 12.96) for the 132 kV transmission line, NPR 8.78 per unit (NPR 14.04) for electricity bought and sold via the 33 kV transmission line, and NPR 9.41 per unit (NPR 15.05) for the 11 kV transmission line. This price will come into effect starting from April. However, it has not yet been approved by the authority’s board meeting or the Electricity Regulatory Commission.

The authority has stated that if approval is not granted by the end of March, it will not be implemented from April. Regarding this issue, Energy Minister Deepak Khadka has repeatedly sought clarification from Ghising. In 2021, the Cabinet meeting had granted the authority full jurisdiction over electricity import-export and related matters. Ghising has mentioned that the electricity import-export price has been agreed upon using the authority granted by the Cabinet.

According to the authority, the country’s internal demand is 1,900 megawatts. The authority meets this demand by producing 1,000 megawatts domestically and importing an average of 500 megawatts of electricity. Ghising has mentioned that if electricity has to be imported only during solar hours, there could be a situation where electricity cuts will need to be implemented in the industrial sector during the evening.

Every year during winter, there is a separate agreement between India and Nepal for importing additional electricity. The agreement for electricity imported from India’s competitive market must be renewed every year. According to this arrangement, it was renewed in the month of November-December for the year 2025.

At that time, India had renewed the agreement with the condition of not supplying electricity during peak hours. India had granted permission to import a total of 654 megawatts of electricity, with 600 megawatts from the 400 kV Dhalkebar-Muzaffarpur transmission line and 54 megawatts from the Tanakpur-Mahendranagar transmission line.

Nepal has been purchasing electricity by competing in India’s Indian Energy Exchange Limited (IEX) Day-Ahead and Real-Time markets. According to this, bidding is done with price and quantity on the previous day. Nepal was granted permission to participate in this market in April-May 2021.

This five-year permission must be renewed every year. Although India renews the permission for a full year each time, the last time, India renewed it only for three months, just three days before the expiry date 28th March 2024. However, this time, the permission has been renewed until June.

Apart from India’s competitive market, under the Mahakali Treaty, electricity can be imported to Nepal through the Tanakpur transmission line and the Nepal-India Power Exchange Committee (PEC). Under the Mahakali Treaty, Nepal receives 7 million units of free electricity annually from the Tanakpur transmission line. In the PEC meeting held on March 11, 2024, the price for electricity exchange via the 132 kV transmission line, based on the structure of the transmission line, was set at NPR 7.98 per unit (NPR 12.77).

The meeting also set the price for electricity exchange via the 33 kV transmission line at NPR 8.65 per unit (NPR 13.84). According to this arrangement, the authority has stated that it is currently importing 150 megawatts of electricity during peak hours.

In addition to the competitive market of India, the Tanakpur transmission line under the Mahakali Treaty, and trade under the PEC, a bilateral agreement was made on October 3rd to import 230 megawatts of electricity during the dry season. The agreement was made to import 200 megawatts from the Dhalkebar-Muzaffarpur transmission line at a rate of NPR 7.5 per unit, and 30 megawatts of electricity from the Tanakpur transmission line will be imported 24 hours a day (RTC – Round the Clock system).

According to this arrangement, an agreement was made between Nepal’s authority and India’s NTPC Electric Power Trading Corporation (NVVN) to import electricity from February to May each year. However, India’s Central Electricity Authority has not given approval for electricity import under this agreement. Ghising mentioned that due to India not granting approval, electricity could not be imported.

The authority has stated that, despite the damage caused by the flood in the previous month of September-October, the Upper Tamakoshi Hydroelectric Project is generating 456 megawatts of electricity by accumulating water throughout the day, during times of high demand in the morning and evening.

Source: Kantipur