NEA seeks India’s permission to sell 111 MW of electricity in Indian IEX

KATHMANDU, Nepal Electricity Authority (NEA) has requested the Indian government to allow increasing limit of Nepal’s electricity to be sold in the Indian Energy Exchange (IEX).

According to the NEA, it has requested Central Electricity Authority, a government entity under the Ministry of Power of India, for permission to sell 111.8 MW of electricity produced by four Nepali hydropower projects in the IEX. Since November 2021, the NEA has been selling 39 MW of electricity generated by the 24 MW Trishuli and 15-MW Devighat power houses.

This time, the NEA has proposed to sell 42 MW of Mistrikhola, 24.2 MW of Likhukhola-A, 23.5 MW of Solukhola and 22.1 MW of Chilime hydropower projects. “We have submitted the proposal and are waiting for the approval of the Indian authorities,” said NEA Managing Director Kulman Ghising.

According to Ghising, if the NEA’s new plan materializes, it will help utilize in optimum the 132 kV transmission line constructed to trade energy between Bihar of India and Nepal. “Selling electricity to entities other than Uttar Bihar Power Distribution Company is also important to evacuate the surplus energy produced in Nepal during the rainy season,” Ghising added.

NEA sold 242,683,000 units of electricity worth Rs 1.83 billion to India in just one month between mid-July and mid-August. In 2021/22, Nepal’s export of electricity to its southern neighbor stood at Rs 3.88 billion. Nepal has been using the Dhalkebar-Muzaffarpur cross-border transmission line for energy trade with India.

Ghising said Nepal has been successful in exporting electricity at a competitive rate in the Indian market as the domestic hydropower plants, during peak season, can produce electricity in excess to demand. “Electricity export, to some extent, has helped Nepal earn foreign currency along with minimizing the country’s ballooning trade deficit.”

Expressing his priority to increase domestic consumption at household and industrial levels, Ghising added that the power utility will make necessary arrangements to develop and improve transmission and distribution lines, while the industrialists will be facilitated via special service and package of benefits.

Electricity exported from Nepal is sold at the daily electricity market (Day-Ahead Market) via India’s central electricity system. The exported energy is put to a bid in the power exchange market during two hours starting from 10 a.m daily.

The selling rate per unit of electricity is fixed by the ‘market clearing price’ mechanism under the Indian electricity system. Once the rate is fixed, electricity is exported at that particular rate from Nepal between midnight of the day through the same time of the next day.