Friday, 3 December, 2021

Milestone In Power Trade

Despite having the potential of generating more than 43,000 megawatt electricity, Nepal has lagged behind in converting its huge waters into blue money owing to several factors. It requires huge investment and sophisticated technology for producing electricity. So, foreign investment is necessary to build big hydro plants. But the bilateral deals on the hydro projects often fall into dispute because of some controversial provisions in it. The issues of land acquisition, compensation and environment assessment also cause delays in completing the big hydel plants in time. It is now gradually overcoming those persistent obstacles that precluded it from harnessing water resources for achieving desired economic development. The construction of many big and small power plants is underway. Some have already started to operate.

Currently, Nepal is producing 1,900 megawatt electricity in rainy season, with over 93 per cent of population getting access to it. During the summer season, the country has surplus electricity generation and it is unable to consume all the energy. The country that once endured 18-hour-long load-shedding is now wasting about 200MW electricity during day and 500 MW during night. The country has become an electricity exporter that marks a milestone in energy trade. It has secured permission to sell electricity to India. According to a news report of this daily, the Ministry of Power of India has permitted Nepal Electricity Authority (NEA) to export 39 MW of electricity in the Indian Energy Exchange (IEX) market in the first phase. The NEA started to supply electricity from Tuesday midnight through Dhalkebar-Muzaffarpur 400 kV cross-border transmission line. This electricity is from 24 MW Trishuli and 15 MW Devighat hydropower plants.

The NEA has to compete in the bid every day from 10 am to 12 noon with the quantity of electricity sold in the exchange market. Its selling rate is determined by the market clearing price. The NEA will export electricity 24 hours a day after the competitive rate is fixed. The good news is that the price of electricity in the exchange market has reached IC 28 per unit following the spike in the coal price. The NEA has authorised the Nodal Agency – NTCP Vidyut Vyapar Nigam (NVVN), India for carrying out electricity trade with Nepal. The NVVN will update the NEA about the daily transactions at IEX. Nepal has been importing electricity through IEX since April 30 this year. Though the quantity of exported electricity is small, it has paved the way to sell excess electricity generated from big projects. Given that electricity promotes green economy, it has big prospect in India that needs more energy to push for its economic growth.

Minister for Energy, Water Resources and Irrigation Pampha Bhusal said that through continuous efforts at the political, diplomatic and administrative levels, the country is able to sell surplus electricity to India, which is a milestone for energy trade between the two countries. The government expects to get permission soon to sell the electricity generated from the 456 MW Upper Tamakoshi, 69 MW Marsyangdi and 45 MW Upper Bhotekoshi hydropower projects to the Indian market. Nepal’s success in exporting electricity gives positive message among the prospective investors. It will indeed boost the confidence of both domestic and foreign investors to invest in Nepal’s hydropower sector. The government should create more conducive atmosphere to attract investment in the big hydropower projects while unveiling schemes to increase domestic consumption.