Nepal Receives Approval to Import Up to 1,004 MW of Electricity from India's IEX Market

Kathmandu: India has granted Nepal permission to import up to 1,004 MW of electricity via cross-border transmission lines. The import quantum increased after India approved an additional 350 MW on Sunday, reaching the approved total.

According to Ministry of Energy, Water Resources and Irrigation(MoEWRI), Nepal can now import 300 MW from the Indian state of Bihar through the Kataiya-Kushaha, Raxaul-Parwanipur, and Ramnagar-Gandak at 132 kV. Similarly, permission was granted to import 50 MW from Uttar Pradesh via the New Nautanwa-Mainahiya 132 kV line as well.

This electricity can be purchased through competitive bidding on the Indian Energy Exchange (IEX) in the day-ahead (DAM) and real-time markets (RTM). The approved imports are valid from November 19, 2024, to March 15, 2025, for 20 hours a day (excluding 5-9 PM). After that, from March 16 to the end of June 2025, electricity can be imported for 12 hours daily (from 6 AM to 6 PM, during "solar hours").

As per Ministry this fiscal year, Nepal had already received approval to import 600 MW via the 400 kV Dhalkebar-Muzaffarpur and 54 MW from Tanakpur during 132 kV transmission line at solar hours through IEX. With the latest approval, the total import capacity through IEX has reached 1,004 MW.

India began allowing electricity imports from IEX via the 132 kV lines connecting Bihar and Uttar Pradesh only last year. Previously, Nepal had to purchase electricity through the Nepal-India Power Exchange Committee (PEC) at higher rates.

In addition, under the Nepal-India Power Purchase Agreement (PPA), Nepal will be able to import 200 MW via the Dhalkebar- Muzaffarpur line and 30 MW through the Tanakpur-Mahendranagar 132 kV transmission line starting February 1, 2025 This increases Nepal's total approved import capacity to 1,234 MW when needed.

Electricity from Bihar and Uttar Pradesh under the PPA (G to G) will be purchased through Power Trade Corporation (PTC) India Limited at INR 7.98 (NPR 12.76) per unit. Imports from the Dhalkebar-Muzaffarpur and Tanakpur-Mahendranagar lines will cost INR 7.05 (NPR 11.28) per unit via NTPC Vidyut Vyapar Nigam Limited (NVVN).

Previously, Nepal had proposed importing 1,254 MW through the 400 kV Dhalkebar- Muzaffarpur, and 132 kV lines connecting Kushaha-Kataiya, Raxaul-Parwanipur, Ramnagar-Gandak in Bihar, and Nautanwa-Mainahiya in Uttar Pradesh. Of this, Nepal has received approval for 1,234 MW Similarly, Nepal has been permitted to export 941 MW of electricity generated from 28 hydropower projects to the Indian market under competitive and medium-term agreements during the monsoon season.

Damage from floods and landslides in October impacted several projects, including the 456 MW Upper Tamakoshi hydropower plant, leading to increased import needs. However, efforts are underway to restore damaged projects and bring new ones like Rasuwagadhi and Sanjen into operation, potentially reducing import requirements.

Last year, Nepal imported 500 MW via the Dhalkebar-Muzaffarpur line during solar hours and 54 MW via the Tanakpur-Mahendranagar 132 kV line. Nepal was first allowed to purchase electricity from the Indian competitive market in April 2021, and the agreement has been renewed annually.

Given the reliance on run-of-river (RoR) hydropower projects and the disruption caused by natural disasters, Nepal needs to import significant electricity during winter to balance the grid. India’s approval for increased import limits is expected to support Nepal stabilize its power supply.