Nepal, India sign agreement for additional 300 MW electricity sales

KATHMANDU: Nepal and India have successfully inked a deal to boost their electricity collaboration, with Nepal agreeing to supply an additional 300 megawatts of power to India.

The agreement, a Power Purchase Agreement (PPA), was signed on June 11 between Nepal Electricity Authority and India’s ‘PTC India Limited’. Prabal Adhikari, director of the trade department under the authority, confirmed that the agreement entails the sale of 300 megawatts of electricity through Bihar, India.

Officials have granted permission for the export of 300 megawatts of electricity through the 132 kV transmission line connecting Nepal and Bihar. This means that electricity will be sold through the Kataiya-Kushaha and Birganj-Parwanipur transmission lines.

Previously, electricity sales were limited to the 400 KV Dhalkewar-Muzaffarpur line, but Nepal has now obtained permission to sell through the new route in Bihar.

As part of the agreement, Nepal will be responsible for paying the transmission line charge (wheeling charge). Previously, the transmission line served as a means to import electricity when needed and export excess electricity to India.

However, it can now be used for commercial sales as well. Rajeev Kumar Mishra, Head of Management at PTC India, confirmed the 300 MW PPA with Nepal in an interview with an Indian media outlet.

During the interview with ‘Livemint’ online, Mishra mentioned that previously both countries were involved in electricity exchange only for emergencies through the Bihar transmission line.

However, the current agreement represents a significant commercial agreement for the sale of 300 MW of electricity. “We have recently signed a PPA for 300 megawatts of electricity with Nepal Electricity Authority through the Bihar transmission line,” he stated.

Mishra further revealed that the 300 MW of electricity, similar to the previous 452 MW, will be sold in the ‘day ahead’ market through the Indian Energy Exchange (IEX). The specific project from which the electricity will be sourced is yet to be determined by the Authority.

Earlier, the Authority had entered into an agreement for the sale of 200 megawatts of electricity for medium-term purposes in India. On May 9, a five-year electricity trading agreement was signed between the Authority and NTPC Electricity Trading Corporation (NVVN) for the sale of 200 MW of electricity from five projects.

According to officials, the agreement sets the price for selling 200 megawatts at 8 rupees 40 paise (5.25 paisa) per unit during the rainy season. Currently, the authority procures water from private hydropower promoters for 4 rupees 80 paise during the monsoon.

The Authority has proposed five projects to provide 200 megawatts by reducing the ‘transmission line charge’ by 3 percent for medium-term contracts.

The listed projects include the 83.42 MW Solu Khola (Dudhkoshi) Project developed by Sahash Energy, the 42.68 MW Super Madi Hydroelectric Project developed by Super Madi Hydropower, the 34.92 MW Upper Balefi ‘A’ Hydroelectric Project developed by Balefi Hydropower, the Himalayan Power Partners’ Dordi Khola Hydropower Project with a capacity of 26.19 MW, and the Upper Chaku ‘A’ Hydropower Project developed by Shivashree Hydropower with a capacity of 12.79 MW.

The official stated that the approval of this deal is currently pending from the Central Electricity Authority of India. Once approved, the projects eligible for medium-term contracts will be able to sell electricity uninterrupted for a duration of five years.

Nepal has received permission to sell a total of 952 MW of electricity in the Indian market, including the additional 300 MW approved in the latest agreement. Previously, 452 MW from ten projects and 200 MW from five-year contracts were allowed for sale in the Indian market.

The final approval for the previous 200 MW and the newly agreed 300 MW is still pending. The Indian government has yet to approve the 18 projects submitted by the Authority. Discussions will be held to seek India’s assistance in the construction of these projects.