The process of exporting 40 MW of electricity from Nepal to Punjab state of India during the rainy season has started. The Nepal Electricity Authority (NEA) is going to sell electricity from July 3 to July 4 (July-September) by selecting from the price competition.
Nepal had proposed to sell 40 MW of electricity in a tender called by the Punjab State Electricity Board. NEA has sought permission to purchase electricity in June, July, August and September, but the Punjab State Electricity Board has listed NEA’s proposal to purchase electricity in July, August and September.
Hitendra Dev Shakya, executive director of the Electricity Authority, says that their proposal has been selected within the quota so that it can be implemented for three months.
However, no agreement has been reached yet. It is not certain as the Punjab board may decide not to take electricity till the agreement is reached, ‘he said. If the process is completed and an agreement is reached, NEA will send electricity to India from Dhalkebar-Muzaffarpur 400 KV interstate transmission line.
According to Shakya, it was proposed to sell electricity to Punjab at different prices from time to time. Attempts have been made to sell electricity at Rs 3.25 to Rs 3.80.
Earlier, Nepal had participated in a power purchase competition called by DRPL, a Delhi-based power trading company, to sell 25 MW of electricity. However, NEA’s proposal was not selected as the proposed rate was expensive.
At present, Nepal is buying electricity from the Dhalkebar-Muzaffarpur line at 4.18 Indian rupees. On the basis of that, Tenter was rejected while participating in the competition. In that competition, companies offering prices ranging from Rs 3 to Rs 3.25 were selected. NEA has been participating in the competition through NTPC Electricity Trading Corporation of India (NVVN) Limited.
Why is the authority under pressure?
If the new project starts generating electricity as per the target during this rainy season, the excess electricity will not be sold in India.
Though the Indian Energy Exchange has given permission to buy electricity from the market, the Indian government has not given permission to sell Nepal’s electricity from the same market.
In the first phase, NEA had proposed to sell the 456 MW Upper Tamakoshi and 45 MW Bhotekoshi projects in the Indian Energy Exchange market during the rainy season. Despite sending the required documents for that, India is still silent.
Some units of Upper Tamakoshi are expected to start commercial production in June. NEA estimates that 500 MW will be added to the power system by August.
At present, it has an installed capacity of 1400 MW. It is projected to generate 1,800 MW of electricity by adding another 500 by August. As there is an internal demand of only 900 MW at night, 900 MW of electricity will have to be exported at night after August.
NEA is afraid of wasting electricity that could not be exported. Up to 300 MW of electricity was wasted in the previous rainy season. Concerns have been raised that a large amount of electricity will be wasted during the rainy season.
When the river level decreases in winter, the electricity from India has to meet the demand. During the rainy season, except for the peak hours, the electricity generated in Nepal meets the domestic demand. At night, as the consumption decreases, the plant has to be shut down and electricity has to be wasted.
If permission is not given to export electricity to the Indian exchange market before the rainy season, it is likely that more electricity will be wasted this year than last year. As there is no power export agreement at the government level, India is not obliged to buy Nepal’s wasted electricity.
In the rainy season of 2076 BS, NEA spent Rs. More than Rs 800 million worth of electricity was sent to India. Electricity consumption in India has also declined since the Corona epidemic began last year.
When it rains, the water level in the rivers increases with the production of electricity. At that time, all the projects can be operated at full capacity. In such a situation, the projects have to be shut down during night consumption.
NEA has been shutting down the production units of its projects as the production is more than the demand. It is considered to be an ‘energy spill’.
NEA has to compensate the private producers for their energy spill as the NEA has entered into a purchase agreement in the ‘take or pay’ model. NEA is looking for an environment to sell electricity in India during the rainy season as there is a risk of wasting electricity by shutting down its own projects.