Independent power producers (IPPs) have said that 500 MW of electricity is being wasted after Nepal Electricity Authority (NEA) forced them to reduce the load (electricity generation). According to Independent  Power Producers Association Nepal (IPPAN), 30 hydropower projects have been forced to reduce their power generation by the NEA. The NEA has instructed IPPs to reduce their load at a time when it is not able to maintain a regular electricity supply to the country's industrial corridors. The NEA’s instruction has come at a time when hydropower projects are in a position to operate their plants to full capacity due to the surge in water levels in rivers. IPPAN on Monday held a discussion with the promoters of power plants who’ve been forced to reduce load, in which promoters said that they cannot even pay the bank’s interest by running the project at half capacity.

According to IPPAN, they (IPPs) are ready to shut down the power plant for 5/6 months if NEA is ready to pay them as per the PPA.

IPPAN President Ganesh Karki said that even if power generation is reduced, they should be paid the money as per the PPA. “NEA has signed a PPA with the private hydropower project in ‘take or pay’ modality. Hence, NEA must buy the power from the IPPs while the IPPs also must supply the quantum of power as mentioned in the PPA,” said Karki. After the Nepal Electricity Authority instructed independent power producers (IPPs) to reduce their power plants’ power generation capacity due to low load demand, the IPPs have said that NEA has to pay the money to them as per the power purchase agreement (PPA). According to Mohan Dangi, senior vice-president of IPPAN, more than 30 power projects having a combined capacity of 500 MW are facing this problem. “Even my project is facing this issue. The authorized capital of my company is Rs 400m but have lost Rs 220m due to not being able to sell electricity,” said Dangi. According to Arjun Gautam, the promoter of the Super Dordi B hydropower project, there is a transmission line that can carry 360 MW of electricity in the Dordi corridor, but the NEA has not purchased electricity accordingly. IPAAN Vice President Uttam Bhlon Lama said it was illegal to sign the load reduction agreement without informing the bank that invested 70 percent of the loan. The NEA, on its part, has sighted the problem of transmission lines to carry the load across the country. While electricity generation has increased by almost 600 MW in the last one year, not much infrastructure has been added to the transmission and distribution side. The lack of transmission infrastructure, according to the NEA has made it unable to deliver electricity as per the demand. However, the authority has not made public its official opinion on this. The NEA Executive Director Kulman Ghising, during a press conference a few days ago, said that there was a problem in the power supply as the transmission lines were overloaded.