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Last week, the Ministry of Energy implemented the “Energy Consumption Growth and Export Strategy, 2026” to increase electricity consumption in the country. However, industrial consumers are still facing various procedural hassles from the Nepal Electricity Authority (NEA) itself when seeking load increases or approval for additional electricity demand.

At a time when the government is introducing strategies to increase electricity consumption in industries, data centers, green hydrogen, and other energy-intensive sectors - citing that monsoon-season electricity generation is going to waste due to low domestic consumption - a new debate has emerged in the energy sector after Simara Special Economic Zone (SEZ) was reportedly obstructed by the requirement of a “Grid Impact Study (GIS)” even for a 2.5 MVA power supply request.

According to documents obtained by Jalsarokar, the Special Economic Zone Authority, Simara Office, had formally requested the Simara Distribution Center of the Nepal Electricity Authority to provide a 2500 KVA (2.5 MVA) electricity load through a 132 kV transmission line for industrial operations.

The letter requested that electricity be supplied from the Piluwa Substation to the SEZ through an underground line and that a CTPT TOD meter be installed. It also stated that the industry itself would bear the meter installation costs.

However, after the request, discussions began within the NEA itself claiming that a “Grid Impact Study (GIS)” was necessary, effectively challenging the ministry’s newly adopted strategy. Although GIS had reportedly not been required for load additions of up to 3 MVA, the NEA’s Distribution and Consumer Services Directorate instructed the System Management Department on 19th May to conduct a GIS study in the case of the SEZ.

The “Nepal Electricity Grid Code, 2023” issued by the Electricity Regulatory Commission contains provisions regarding demand forecasts and prior approval for load increases above 1 megawatt and major load shifting. Likewise, distribution system directives mention special technical provisions for loads above 3 MVA and mandatory GIS requirements for new connections above 5 MVA.

However, the load requested by Simara SEZ is only 2.5 MVA. This has raised a major question: Is GIS mandatory even for loads below 5 MVA?

Generally, converting 3 MVA into megawatts results in approximately 2.55 MW, assuming Nepal’s industrial power factor standard of 0.85. Until a few weeks ago, GIS studies were reportedly not required for load additions or transfers up to three megawatts.

Navaraj Ojha, head of the NEA’s Distribution and Consumer Services Directorate, said that according to a circular issued by the System Management Department on 12, November 2025, GIS has become mandatory for any load addition above 1 megawatt.

According to Ojha, the System Management Department issued the circular based on the Grid Code introduced by the Electricity Regulatory Commission.

This has now triggered another serious debate within the energy sector:

Has the NEA interpreted the Grid Code in a stricter manner than what was originally intended by the commission?

According to the available directives, the clear GIS threshold appears to be 5 MVA. However, the NEA’s internal circular reportedly makes GIS mandatory for any additional load exceeding 1 megawatt.

This issue has now become central to the SEZ case

The “Energy Consumption Growth and Export Strategy, 2083,” recently implemented by the Ministry of Energy, Water Resources and Irrigation, acknowledges that a large amount of electricity generated during the monsoon season is going to waste after domestic demand is met.

The strategy aims to increase electricity consumption in industrial sectors, promote energy-intensive industries, expand transmission and distribution infrastructure targeting industrial areas, and encourage data centers, green hydrogen, and chemical fertilizer industries.

In such a context, observers say that imposing a complex GIS process even for a 2.5 MVA industrial load request reflects a contradiction between the government’s energy consumption strategy and the NEA’s operational practices.

According to energy sector experts, the core issue here is not just the connection request of one SEZ.

The bigger question is:

At a time when electricity is going to waste during the monsoon due to insufficient domestic consumption, is the country making it easier for industries to access electricity - or creating more procedural barriers?

Ojha, however, argues that once the Regulatory Commission issued the Grid Code, studies became necessary before granting approvals, and GIS is required for those studies. He added that the NEA plans to request the Regulatory Commission to simplify the process, acknowledging that it has become overly cumbersome.

Meanwhile, affected industrial consumers allege that instead of welcoming additional electricity demand, the NEA is creating unnecessary technical and administrative hurdles while also encouraging informal payments beyond official revenue charges.

According to victims, applying for additional load approvals requires paying not only official fees but also “under-the-table” payments proportional to the revenue amount.

“Without paying unofficial commissions, nothing moves forward. Once both the official revenue and the unofficial payment are made, the work gets completed within a week.

Jalasarokar