India to purchase additional 251 MW of electricity from Nepal

Kathmandu, Aug. 20: Nepal has received approval from India to export an additional 251 megawatts of electricity from a dozen hydropower projects.

According to the Indian Embassy in Kathmandu, the designated authority of India for cross-border trade has approved an additional 251 MW of power export from 12 hydropower projects in Nepal.

Of the 251 MW, the Central Electricity Authority under the Ministry of Power of India has allowed the Nepal Electricity Authority (NEA) to export 125.89 MW to the State of Haryana and 125 MW to Bihar.

Along with this, Nepal can now export 941 megawatts of electricity to the southern neighbour from 28 hydropower projects in Nepal.

Earlier, Nepal got permission to sell 690 MW (from 16 projects) in the competitive Indian Energy Exchange market.

According to the Embassy, for the first time, Nepal would be exporting power to Bihar through a medium-term power sales agreement.

According to the Nepal Electricity Authority, 125 MW of electricity generated from 10 hydroelectric projects will be sold to Bihar and an additional 125.89 MW of electricity produced from two hydroelectric projects will be sold to Haryana. 

The Authority is currently selling 109 MW of electricity to the State of Haryana.

The surplus electricity during the rainy season in Nepal will be sold to Bihar and Haryana every year from June to October, said the NEA. 

With the new approval, the amount of electricity to be sold to the state-level distribution companies of India according to the mid-term power sales agreement has reached 360 MW.

According to NEA, 125 MW electricity generated from 11.64 MW Dordi-1, 14.453 MW Mayakhola, 9.991 MW Down Piluwa, 10.67 MW Lower Khare, 11.64 MW Upper Khimti, 6.8 MW Upper Khimti-2, 14.4 MW Modi, 14.6 MW Gandak, 19.21 MW Upper Solu and 11.64 MW Dudhkunda hydropower projects will be exported to Bihar.

Similarly, 125.89 MW additional electricity generated from 75 MW Likhu-1 and 50.89 MW Likhu-2 will be sold in the state of Haryana.

According to NEA, the selling rate of electricity to be sold till next October is Rs. 8.72 per unit. 

The rate of 109 megawatts approved for sale to Haryana last year was Rs. 8.40 per unit. In this, the Authority does not have to pay taxes and fees, including the transmission line fee under the Indian side, leakage, and trading margin to India.

NEA aims to sell electricity worth Rs. 25 billion this fiscal

Managing Director of NEA Kul Man Ghising said that with the approval from the Indian side, additional power exports to India would begin soon. 

“As we can export 10 per cent more electricity than the approved quantity, we are now able to export more than 1,000 megawatts. An additional 200 megawatts are in the process of export approval. 

We are confident that we will get approval soon,” he said. “Now the quantity of electricity export will increase, the goal is to export electricity worth Rs. 25 billion in the current fiscal year.”

Even before the approval to export 251 MW, Nepal had already become a net exporter of electricity and a net revenue generator selling electricity worth Rs. 17.06 billion in the last year.

Nepal exported 1.95 billion units of electricity worth Rs. 17.06 billion to India during the last fiscal year (from July 17, 2023 to July 15, 2024). In the meantime, the Authority imported electricity worth Rs. 16.93 billion during the last fiscal year.

In October 2021, India approved 39 MW power exports from Nepal to India for the first time. In less than three years, this figure has grown by more than 24 times. The Nepal Electricity Authority has been exporting surplus electricity to India during the rainy season and importing in the dry season to meet the domestic demand.

Nepal first began its power exports by selling in the Day Ahead Market of the Indian Energy Exchange in 2021. 

Since then, India has also granted access to the Real-Time Market. Nepal Electricity Authority has also entered into medium-term power sales agreements with DISCOMs in Haryana and Bihar.

India has also opened the provision of counting hydropower imports from Nepal as a part of the Hydropower Purchase Obligation (HPO) for buyers in India, which further incentivises buyers to purchase power from Nepal.

The Agreement for Long-Term Power Trade between India and Nepal envisages the sale of up to 10,000 MW of power from Nepal to India in the next 10 years. 

This is the first year of the agreement and around 1,000 MW exports have already been reached, said the Embassy. With these developments, Nepal is on track to become the leading hydropower exporter of the South Asia region. 

“An agreement for the sale of 40 MW power to Bangladesh has also been finalised and was planned to be signed on 28 July 2024 but got postponed due to recent political unrest in Bangladesh,” read the press statement.