Nepal has been allowed to export additional 251 megawatts of electricity to India. According to the Nepal Electricity Authority (NEA), the Central Electricity Authority (CEA) under the India's Ministry of Power has paved the way for the export of additional electricity to Bihar and Haryana.
The country currently has permission to export 690 megawatts of electricity from 16 hydropower projects. With the new permissions, the country will be able to supply 941 megawatts of electricity from 28 hydropower projects.
“Nepal can now export electricity close to 1000 MW, creating additional source of revenue for Nepal and clean energy for India,” the Ministry of External Affairs (MEA) of India said on Monday.
However, officials from NEA have warned that if the construction work of domestic and international transmission lines do not complete on time, exporting additional electricity to the Southern neighbour would be impossible.
According to NEA, 125 megawatts of additional electricity from 10 projects will be sold to Bihar, while 125.89 megawatts from two projects will be sold to distribution companies in Haryana.
Currently, NEA sells 109 megawatts of electricity to Haryana, and will be making its first export to Bihar.
Nepal will export the additional electricity under the medium-term agreement for five years, during the wet season, through the Kataiya, Raxaul, and Ramnagar points, which are connected by transmission lines to Bihar.
To Haryana, electricity will be exported through the Dhalkebar-Muzaffarpur Cross-Border Transmission Line, Chandan Kumar Ghosh, spokesperson at the NEA, told New Business Age.
The additional export permit comes at a time when Nepal's Foreign Minister Arju Rana Deuba is on a five-day offical visit to India. She is scheduled to return Nepal on August 22.
The amount of electricity to be sold to state-level distribution companies in India under the mid-term agreement has now reached 360 megawatts.
The electricity will be sold until next October at the rate of Rs 8.72 (INR 5.45) per unit. The per-unit rate for 109 megawatts approved for sale to Haryana last year was Rs 8.40 (INR 5.25). It has been reported that the NEA will not have to bear taxes and fees, including transmission line fees, leakage, and trading margins on the Indian side.
Since 2021, the NEA has been exporting electricity to India during the rainy season. Currently, India's Energy Exchange (IEX) offers competitive rates for real-time and day-ahead markets, and also supplies power to Haryana based on medium-term power agreements.
Kulman Ghising, Managing Director at NEA, said that with approval from the Indian side, Nepal will export more electricity to Bihar and Haryana in the coming days.
“We are in a position to export 10% more than the approved quantity, exceeding 1,000 megawatts," Ghising said. “An export of additional 200 megawatts export of electricity is in the approval process, and we are optimistic about receiving the necessary permissions soon.”
NEA has set the target of earning Rs 25 billion from electricity export for the current fiscal year. It made a net profit of around Rs 120 million for FY 2023/24, as Nepal became a net electricity exporter for the first time, exporting power worth Rs 16.93 billion to India in the wet season while spending Rs 16.81 billion on imports in the dry season.
Under the long-term energy agreement between Nepal and India, the Southern neighbour has committed to purchasing up to 10,000 megawatts of electricity from Nepal over the next decade.
Meanwhile, Nepal's electricity production is on the rise, with the NEA estimating to increase the production to 10,000 megawatts in the next five years.
Nepal’s total installed capacity of electricity increased to 3156.96 megawatts–2990.6 megawatts of hydro electricity, 106.9 megawatts of solar, six megawatt of cogeneration and 53.4 megawatt of thermal electricity–in the last fiscal year, according to the recently published NRB’s macroeconomic report.
But, delay in construction of transmission lines could bar export of additional electricity to India.
“The New Butwal-Gorakhpur Cross Border transmission line has made significant progress on the Indian side, but the construction is yet to begin on the Nepali side,” said Ghosh, the NEA spokesperson.
The Millennium Challenge Accounts, established to implement the cooperation program of the Millennium Challenge Corporation, is responsible for constructing the approximately 20-kilometre transmission line on the Nepali side.
India's SJVN, responsible for building the 900 megawatts Arun III Hydropower Project, is also working on the Dhalkebar-Sitamarhi Transmission Line.
“Obstruction from locals in certain areas has delayed the completion of the transmission line,” Ghosh said. “If these critical infrastructures are not finished on time, it will impact electricity exports in the coming days."
