Electricity Demand Declines after Power Cuts to Industries

The Nepal Electricity Authority (NEA) has instructed several hydropower projects to reduce electricity generation following a drop in demand after it cut power supply to defaulting industries. As a result, the 54 MW Super Dordi Hydropower Project in Lamjung is producing far below its installed capacity.

“We are currently generating only 8 to 10 MW,” said Keshav Bahadur Rayamajhi, managing director of Super Dordi Hydropower Project, in an interview with New Business Age. “After industries had their power lines disconnected and consumption fell, NEA directed us to reduce production.”

The NEA disconnected electricity supply to 25 industries from October 21, citing unpaid dues for the use of dedicated feeders and trunk lines. According to NEA, these industries collectively owe Rs 5.48 billion. However, the industries have refused to clear the dues, claiming the NEA has not provided adequate consumption records.

Following the disconnections, NEA asked various hydropower producers to reduce output. Affected projects include those categorized under the NEA’s “contingency” list, projects from which electricity is purchased only as needed. Super Dordi Hydropower Project has remained in this category for the past three years.

According to the power purchase agreement, NEA was to buy 33 percent of Super Dordi's output in the first year, 47 percent in the second year, and 80 percent in the current year. Due to reduced generation, Rayamajhi said even 50 percent of this year's target cannot be met.

“Before the power supply was disconnected to the industries, we were producing about 22 MW. Now, we generate 8 or 10 MW, while on some days the plant is shut down completely,” he added. Similar challenges are being faced by the 25 MW Upper Dordi Hydropower Project, 30 MW Nyadi Hydropower Project, and several other projects.

The Independent Power Producers’ Association Nepal (IPPAN) said data is being compiled to assess how much electricity from privately owned projects is going to waste. IPPAN confirmed production cuts at the 84 MW Rahughat Hydropower Project and the 25 MW Upper Dordi project.

According to IPPAN, approximately 200 MW of electricity went unused on Friday. While some projects have resumed operations, others have halted production.

Two Industries Reconnected After Partial Payment

Power supply was restored to Gharana Foods and Goenka Foods after these companies began paying their dues in installments under NEA's settlement scheme. Supply remains disconnected for 23 industries.

Over 100 MW of Electricity Going to Waste

The NEA has acknowledged that more than 100 MW of electricity is currently being wasted. “Around 130 MW is going unused,” said NEA spokesperson Rajan Dhakal. “This is not solely due to power cuts to industries but also due to increased river flows from recent rainfall, which has enabled higher generation.”

Dhakal claimed that NEA did not instruct projects to reduce output solely because of the industrial shutdowns. “With excess generation during the rainy season and lower demand, some projects were asked to stop or reduce production,” he said.

Total electricity generation currently stands at 3,000 MW, with peak domestic demand at 1,900 MW. Around 1,000 MW is being exported, NEA reported.

IPPAN Deputy Secretary-General Prakash Chandra Dulal said that the simultaneous industrial shutdowns and seasonal increase in river flow have led to surplus electricity being wasted. He added that the issue is temporary, as power demand is expected to rise and river flows will decrease in the coming months. Production cuts are primarily affecting projects supplying electricity to industrial corridors.