Nepal proposes exporting an additional 212 MW of electricity to India for the next few months

Kathmandu; According to Nepal Electricity Authority (NEA), the country exported 246.52 million units of electricity worth Rs 2.41 billion to its southern neighbor between mid-August and mid-September alone. Since June 2, Nepal has been selling its electricity at the Indian Energy Exchange (IEX) via a day-ahead mechanism.

Initially, the NEA sold 39 MW of electricity generated by two power houses at IEX India. Since June 10, an average of 364 MW of electricity produced by six hydropower projects is being sold through a competitive bidding process in the Indian market.

The records with the NEA show that the power utility sold 787.80 units of electricity worth Rs 7.19 billion to India in four months between mid-May and mid-September. At the current exchange rate of Nepali currency with the Indian currency, Nepal earned INR 4.499 billion from the power trade. The NEA recorded earnings of INR 1.51 billion in the last month alone.

NEA Managing Director Kulman Ghising said the rise in electricity exports has helped Nepal reduce the deficit in bilateral trade, which also provided the country with a cushion from depleting foreign currency reserves. He said electricity exports will continue till the third week of November and can be started again from mid-May, 2023. “We have expected to generate earnings of around Rs 16 billion from electricity exports,” Ghising added.

According to Ghising, many production units will remain closed during the upcoming festivals, taking down domestic consumption. “As the production continues in full capacity, we have requested India for its consent to export an additional 200 MW of electricity,” he said.

IEX divides 24 hours into 96 different blocks, each with an interval of 15 minutes, in order to purchase electricity at competitive market rates. Due to this system, the rate of electricity purchase at the IEX differs.  NEA’s selling rate last month was Rs 9.80 per unit, while the average rate in the past four months stood at Rs 9.23 per unit.

Export for an additional 200 MW proposed

NEA has proposed India to sell the surplus of 100.9 MW of electricity via a day-ahead mechanism at the IEX. A few days ago, the NEA requested the Indian authorities for their approval to sell electricity produced by the private sector hydropower projects including 29.04 MW Likhu Khola A, 25 MW Kabeli B-1, 22 MW Mai Khola, 14.9 MW Hewa Khola A and 10 MW Lower Modi-1.

Previously, Nepal’s power utility had already asked for the consent of Indian authorities concerned to export 111.8 MW of electricity. This includes the production of 42 MW Mistri Khola, 24.2 MW Likhu Khola A, 23.5 MW Solu Khola and 22.1 MW Chilime.

Provided the Indian authorities approve Nepal’s proposal, the landlocked country will be exporting an additional 212.7 MW of electricity to India for the next few months of the peak season.