Nepal to sell surplus electricity in India’s energy exchange market

PTI, Nov 3, 2021, 7:06 PM IST

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Kathmandu: For the first time, Nepal will sell its surplus electricity to India at a competitive rate after New Delhi allowed the neighbouring country to trade its power in the Indian power exchange market, according to officials here on Wednesday.

The Energy Exchange under India’s Power Ministry on Monday granted permission to Nepal after persistent lobbying from Kathmandu, as Nepal Electricity Authority (NEA) is now in a position to sell its surplus energy.

”Through continuous efforts at the political, diplomatic, and administrative levels, we are allowed to sell surplus electricity. This is a milestone for energy trade between the two countries,” said Minister for Energy, Water Resources and Irrigation Pampha Bhusal.

”We hope 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 in the Indian market,” she added. In the first phase, 39MW power, including 24MW produced by NEA-owned Trishuli hydropower and 15MW Devighat powerhouse, has been permitted for trading in Indian Energy Exchange (IEX). Both projects were developed with India’s assistance, sources at NEA said.

Gokarna Raj Pantha, the joint spokesperson for the ministry, told The Kathmandu Post that the Nepal Electricity Authority would now be able to participate in an auction in the Indian Energy Exchange every day to sell power.

The NEA will start exporting the power through the 400- kV Dhalkebar-Muzaffarpur inter-country transmission line from midnight said an official at the NEA.

This transmission has until now been used just to import power as Nepal had already received permission for purchasing and importing power in the Indian Energy Exchange.

The NEA has been importing power through Indian Energy Exchange at a competitive rate since last April 30 as per need. After obtaining the approval, the power trade between Nepal and India has entered a new phase, The Himalayan Times report said.

”Even though the export of electricity has started in small quantities, we are confident that electricity generated from other projects, including Upper Tamakoshi, could be exported to the Indian market soon,” Kul Man Ghising, Managing Director of NEA, said, adding that the power trade permission has added a brick in Nepal-India relations.

Nepal became an energy surplus country ever since the 456MW Upper Tamakoshi Hydropower Project came into full operation in August, The Kathmandu Post reported.

According to the NEA, Nepal now has surplus power even during peak hours, usually between 7 and 8 pm. The peak hour demand stands at 1,500MW. The country is currently producing 2,000MW of electricity, of which 1,900MW is generated from hydropower projects, it said.

Independent Power Producers’ Association (IPPAN) in a statement on Wednesday welcomed India’s decision to allow inter-country electricity trade on a competitive basis.

”Now the power trade between Nepal and India has entered into a new age, Krishna Prasad Acharya, President of IPPAN said.

”We have been waiting for this for a long time,” he said. Prior to this Nepal and India had done transactions of electricity through an exchange system. Nepal had exported its surplus electricity during summer to India and imported the same from India during winter in the past for several occasions.

Speaking about the development, Rohit Bajaj, Head and Senior Vice President – Business Development, Indian Energy Exchange Limited, said IEX commenced trade in cross-border electricity transactions in April. Under the CERC Regulations, grid-connected neighbouring countries can buy-sell electricity through the day-ahead electricity market on the Exchange.

”Nepal was the first country which commenced transactions at IEX platform and has been buying electricity regularly in the day-ahead market,” Bajaj said.

As yet another key milestone in strengthening cross-border ties, two hydro generators from Nepal – Trishuli and Devighat Hydro have sold electricity to India through the Exchange platform for the first time, he said.

”We are also working closely with stakeholders in Bhutan and Bangladesh and going forward expect these two countries also to commence trade at IEX platform.

”The Exchange day-ahead market opens for trade from 10 AM to 12 PM on a daily basis. The market follows double-sided closed anonymous auction to discover the most competitive power price for the electricity to be delivered on the next day,” he said.