Fiscal Nepal
First Business News Portal in English from Nepal
The government has raised concerns among energy producers regarding the proposed amendments and consolidation of existing electricity-related legislation, as outlined in the Electricity Bill of 2080. According to reports, independent energy entities are requesting an extension of the permit duration for hydropower projects in the private sector to 50 years.
The Electricity Bill, in its current form, specifies a 50-year permit duration for hydroelectric projects that have hydropower components. However, for other types of natural energy projects, such as wind and solar, the bill proposes a permit duration of 45 years. Additionally, it suggests a 5-year duration for the observation permit of all electricity production permits, as per Clause 19.
In response to these provisions, Independent Power Producers’ Association – Nepal (IPPAN) have suggested extending the permit duration to 50 years for all natural energy projects, except for hydropower projects with hydropower components, which would remain at 45 years. This recommendation aims to ensure consistency in permit durations across different types of renewable energy projects.
Furthermore, the proposed legislation includes provisions for providing the government with free shares, free electricity, upfront payments, and electricity royalty based on competitive bidding. These measures are intended to create a level playing field for all stakeholders and foster a competitive environment in the electricity sector.
The call for amendments also extends to the royalty rate for electricity production, which has witnessed an annual increase in recent years. To address this, independent energy producers have suggested limiting the annual increase to 2% on the royalty rate, ensuring a more predictable and sustainable business environment.
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