Nepal becomes a net power exporter

By A Staff Reporter,Kathmandu, July 29: Nepal exported electricity worth Rs. 16.93 billion to India during the fiscal year 2023/24. 

According to the Nepal Electricity Authority (NEA), it has exported 1.94 billion units of electricity worth Rs. 16.9 billion to India from July 17, 2023 to July 15, 2024.

The NEA is selling the surplus electricity to the Indian company NTPC Vidyut Vyapar Nigam Ltd. (NVVN) at a competitive rate in the Indian Energy Exchange (IEX) day-ahead and real-time market and as per the medium-term electricity agreement. 

The NVVN is selling the electricity in the state of Haryana. The average rate of exported electricity is Rs. 8.72 per unit.

In the meantime, the Authority has imported electricity worth Rs. 16.81 billion during the last fiscal year.

 During the dry season, the flow of water in the rivers and streams decreases and the production of electricity from the run-of-the-river based hydropower plants in the country declines, prompting Nepal to import power to meet domestic need. 

The NEA had imported 1.83 billion units of electricity to meet the domestic demand in the last year.

The average price of imported electricity in winter season is Rs.  9.17 per unit, said the NEA.

During the review period, the price of Nepal’s exported power was higher by Rs. 122.3 million than cost of the imported electricity. 

Similarly, on the basis of energy, exported power was more by around 109 million units than the than the imported power.

 Nepal has become a net exporter in electricity within three years of its entry into the Indian competitive market as the amount of exports is more than imports.

In the fiscal year 2022/23, Nepal imported electricity worth Rs. 19.44 billion from India and exported power worth only Rs. 10.45 billion.

Managing Director of NEA Kul Man Ghising said that even though electricity had to be imported to manage the domestic demand for the winter season for the next few years, the amount of exports would gradually increase now. 

‘Until 6-7 years ago, we were only an importer of electricity, we started exporting electricity to the Indian competitive market only year years ago, and still the import was more than the export. But now we have become a net-importer,” he said.

“Availability of surplus electricity and the use of electric vehicles and induction stoves in the country has contributed to reducing the trade deficit between Nepal and India. Again, the import of petroleum products has decreased and the volume of electricity exports has increased. This has also had a positive effect on the country’s foreign exchange reserves.”

Nepal entered the Day Ahead Market of Indian Energy Exchange on May 1, 2021. Nepal, which initially got the permission to import electricity, was also admitted as an exporter on November 3, 2021. 

Currently, Nepal is selling about 700 megawatts of electricity daily to India under the medium term agreement. 

The Authority has received permission to export 690 megawatts of electricity produced by 16 hydropower projects.

MD Ghising said that according to the mid-term agreement, an additional 400 megawatts of electricity is in the process of receiving export permission. 

“We are in the process of receiving permission from the concerned authorities of India to export an additional 400 MW of electricity to the Indian states of Haryana and Bihar. We will also soon make an agreement with Bangladesh and export 40 MW from this year,” said Ghising.