The years 2022 and 2023 are opening a new chapter in Nepal’s hydropower sector with some encouraging developments and breakthroughs taking place.
The Nepal Electricity Authority (NEA) started exporting surplus power to India, the much-debated Millennium Challenge Corporation (MCC)-Nepal Compact moved toward the implementation phase, Nepal and India agreed to construct two more cross-border transmission lines, and Bangladesh and China formally proposed to buy electricity from Nepal.
The biggest breakthrough during this period is power export to India. Nepal earned over Rs 11bn by selling excess power to India from June-December 2022.
There has been a huge surge in domestic electricity generation. A total of 735 MW of electricity was added to the national grid in FY 2021/22. NEA has projected that 808 MW of electricity will be added to the national system by the end of FY 2022/23. The latest data shows 300 MW of electricity has already been connected to the national grid in the first seven months of the current fiscal year. Nepal’s installed electricity production capacity has reached 2,400 MW.
Government officials estimate that Nepal will become self-sufficient in electricity even in winter in the next two years given that all the under-construction projects start power generation. As the electricity supply will be more than the domestic demand, the country can aim for more power export.
The Department of Electricity Development (DoED) has issued construction licenses to 17 hydropower projects with a combined capacity of 519.24 MW till mid-February, 2023. Similarly, the department has issued survey licenses to 14 hydropower companies with a combined capacity of 1412.07 MW. DoED also issued survey licenses to 12 companies that have proposed to generate 236.9 MW of solar electricity.
There was renewed Indian interest in Nepali hydropower with NHPC Limited signing an MoU to study and develop two hydropower projects with a combined capacity of 1200 MW. The 750 MW West Seti Hydropower Project and 450-megawatt Seti River (SR-6) are worth a combined USD 2.4 billion.
In May 2022, Nepal and India signed an agreement to develop the 490-megawatt Arun-IV Hydropower Project which will be developed as a joint venture between India’s state-owned Satluj Jal Vidyut Nigam (SJVN) and Nepal Electricity Authority (NEA), with SJVN having a majority share in the company that will operate the proposed project.
Two more cross-border transmission lines between Nepal and India
The recently concluded 10th joint secretary-level Joint Working Group and the secretary-level Joint Steering Committee meeting between Nepal and India agreed to increase power trade between the two countries and develop more cross-border transmission lines.
Currently, the southern neighbor has allowed Nepal to sell 452.6 MW of electricity generated by 10 hydropower projects in the Indian power market. But the approvals given to the 10 hydropower projects need to be renewed every year. India has agreed to review the existing mechanism following a request from Nepal of giving such approvals for at least five years.
Nepal and India also agreed to develop two more 400kV cross-border transmission lines–Inaruwa (Duhabi- Purnia (Bihar) and New Lamki (Dodhara)-Bareli. According to the press statement of the ministry, the first one will be completed by 2027-28 and the next one will be completed by 2028-29. Likewise, the two sides also agreed that the 400kv Butwal-Gorkhapur Cross-border Transmission Line would be completed by March 2025. For this, the two countries agreed to sign an implementation and transmission service agreement very soon.
China officially proposes to buy electricity from Nepal
China has proposed to purchase electricity from Nepal. The northern neighbor wants to purchase power for its autonomous state Tibet which borders Nepal. The Chinese side formally made a proposal to Nepal in the first meeting of the Joint Working Group formed for energy cooperation between Nepal and China held in Kathmandu last Tuesday.
According to Nepali government officials close to the matter, China wants to import electricity from Nepal, especially for the winter season. But, both sides are yet to reach any understanding in this regard. “This is the first time China has officially proposed to purchase electricity from Nepal,” said an official who took part in the meeting.
The meeting of the Joint Technical Group also discussed the proposed Ratamate-Rasuwagadhi-Kerung Transmission Line Project. NEA has already completed a feasibility study of the 400 KV transmission line connecting Nepal and China. Currently, an environmental study of the transmission line is being carried out. NEA Engineering Company, a subsidiary of NEA, is taking charge of the environmental impact assessment (EIA) of the project.
Construction licenses issued for hydropower project in 2022/23 (First seven months)
|No||Project||Capacity (in MW)||Developer|
|1||Ghunsa Khola HEP||77.500||Remit Hydro Ltd|
|2||Simbuwa Khola HEP||70.300||Simbuwa Remit Hydro Ltd|
|3||Dudh khola HEP||65.000||Sita Hydropower Company Pvt.Ltd.|
|4||Jaldigad||21.000||Shangrila Hydropower Pvt. Ltd.|
|5||Middle Trishuli Ganga nadi||15.625||Perfect Energy Developmnet Pvt. Ltd, KTM,|
|6||Upper Madi 0 HEP||43.000||Annapurna Power Company Pvt. Ltd|
|7||Middle Mailung (cascade) HEP||13.000||Mathillo Mailung Khola Jalbidhyut Ltd|
|8||Aayu Malun Khola HEP||21.000||Puwa Khola 1 Hydropower Limited|
|9||Upper Kabeli-2 HEP||15.000||Arun Valley Hydropower Development Company Limited|
|10||Palun khola 1 HEP||30.000||Trust Energy Pvt. Ltd.|
|11||Palun Khola Small HEP||21.000||Palun Khola Hydropower Pvt. Ltd.|
|12||Syarpu HEP||3.300||Syarpu Power Company Limited|
|13||Bhotekoshi 1 HEP||40.000||Shailung Power Company Limited|
|14||Luja Khola HEP||24.800||Silk Power Pvt.Ltd.|
|15||Upper Pikhuwa Khola HEP||4.900||Sumnima Hydropower Company Pvt. Ltd.|
|16||Sani Bheri HEP||44.520||Expert Hydro Investment Pvt. Ltd|
|17||Siwakhola HEP||9.300||Mewa Developers Pvt. Ltd|
Survey licenses issued for hydropower project in FY 2022/23 (First seven months)
|1||Mathillo Maya Khola Hydropower Project||5.000||Waleng Tumhok Hydro Power Pvt. Ltd.|
|2||Lungri khola PROR HPP||22.000||Tripura Sundari hydro energy pvt. ltd.|
|3||Chepe Khola Cascade Hydropower Project||2.000||Dynamic Hydro Energy Pvt. Ltd|
|4||Marsyangdi River PRoR Hydropower Project||99.800||M.A. Power Pvt. Ltd.|
|5||Trishuli Khola Small Hydropower Project||8.000||Hydro Concern Pvt Ltd|
|6||Super Sabha Khola A HPP||9.550||Sankhuwa Sabha Development Pvt. Ltd.|
|7||Pelma Khola PRoR HPP||40.000||Pelma Hydropower Project Pvt. Ltd.|
|8||Upper Sani Bheri PRoR HEP||60.000||Pelma Hydropower Project Pvt. Ltd.|
|9||West Seti Hydropower Project||750.000||NHPC Limited|
|10||Lower Badigad HEP||18.730||Aviyan Hydropower Pvt. Ltd|
|11||Mathillo Marsyangdi -2 Hydropower Project||327.000||Himtal Hydropower Company Pvt. Ltd|
|12||Marsyangdi – 7 Hydropower Project||50.000||Beyul Energy Nepal Public Limited|
|13||Middle Iwa Khola Hydropower Project||15.000||Unitech Hydropower Company Pvt. Ltd.|
|14||Lapa Khola Hydropower Project||4.990||Harmony Initiatives Pvt. Ltd.|
Survey licenses issued for solar project in FY 2022/23 (First seven months)
|1||Krishnapur Solar PV Project||10.000||Green Village Ventures Pvt. Ltd.|
|2||Surunga Utility Scale Grid- Tied Solar Project||10.000||Time Solar Energy Pvt. Ltd.|
|3||Godawari – Attariya Solar Electricity Project||40.000||Hive Nepal Pvt. Ltd.|
|4||Pahalmanpur Solar Electricity Project||30.000||Hive Nepal Pvt. Ltd.|
|5||Bhurigau Solar PV, Project||40.000||Hive Nepal Pvt. Ltd.|
|6||Nepalgunj Solar PV Project||25.000||Hive Nepal Pvt. Ltd.|
|7||Kohalpur Solar PV Project||40.000||Hive Nepal Pvt. Ltd.|
|8||Gulariya Solar PV Project||25.000||Hive Nepal Pvt. Ltd.|
|9||Tulsi Solar Electricity Project, Dang||7.500||Vinayak Solar Private Limited|
|10||Gandak Saurya Vidyut Project, Nawalparasi||5.800||Nepal Electricity Authority|
|11||Jhupra Saurya Vidyut Project, Surkhet||2.000||Nepal Electricity Authority|
|12||Madhya Marsyangdi Solar Electricity Project, Lamjung||1.600||Nepal Electricity Authority|
Power projects connected to national grid in FY 2022/23
|Project||Developer||Capacity (in MW)|
|Simara Solar Project||Api Power Company||1|
|Grid Connected Solar PV Project||National Solar Power Co. Pvt. Ltd||5|
|Dordi Khola HEP||Himalayan Power Partner Pvt. Ltd||27|
|Chepe Khola Small||Aashutosh Energy Pvt. Ltd||8.63|
|Dordi-1 Khola||Dordi Khola Jal Bidhyut Company||12|
|Upper Balefi A||Balefi Hydropower Company||36|