Rs 4.19bn earned in a month thru power export

The same authority that used to release load shedding routines eight years ago is now earning
Rs 4.19bn monthly through export of electricity. 

Nepal Electricity Authority (NEA) has around 3,300 MW of electricity in its system. From that, a total of 1,929 MW is being internally consumed. Similarly, the total demand of the country lies at 2,633 MW, according to the authority. However, such demand is only for a couple of hours, mostly during mornings and evenings. The authority has managed to earn the mentioned amount by exporting the excess electricity at night, informed Managing Director Kulman Ghising. 

The amount was raised in the first month of the current fiscal year, as announced by the authority. The authority has succeeded in earning income by exporting excess electricity after consumption in the country to India during the rainy season. According to daily records, electricity equal to Rs 131.1m has been exported to India between July 16 and Aug 16. Trade with India is done through the Indian currency. Therefore, around Indian Rs 2.62bn was earned through electricity export in
July 16-Aug 16. 

The average rate of electricity exported from July 16 to Aug 16 was Rs 8.52 per unit. While eight years ago, people had to face 8-9 hours of load shedding during rainy seasons and even up to 24 hours during dry seasons, today more than 700 MW is exported during monsoon, per Managing Director Ghising. 

He mentioned that although, due to natural and technical reasons, lights go off sometimes, today there is no load shedding because of the ability to supply the demanded amount of electricity.

Ghising claimed, “Our first priority is to increase the consumption of electricity in the country. To increase the consumption, the work of reforming and expanding the transmission and distribution system is being implemented as a campaign. The surplus electricity will be exported to neighboring countries India and Bangladesh.”

Ghising informed that the export of electricity to India during the rainy season and significant foreign exchange earnings are making a positive contribution to the country’s foreign exchange reserves and reducing Nepal’s trade deficit with India. “Even though we have to import electricity for a few more months during the winter, the amount of imports will gradually decrease. We have become a net exporter from net importer by selling the excess electricity consumed in the country from last year”, says Ghising. 

The authority is selling the surplus electricity to the Indian company NTPC Vidyut Vyapar Nigam Ltd (NVVN) at a competitive rate in the ‘day ahead’ and real-time market of the Indian Energy Exchange (IEX) and in accordance with the bilateral medium-term electricity sales agreement. NVVN is selling the electricity in the state of Haryana. 

The authority has so far received approval to sell 941 MW of electricity produced by 28 projects in the Indian market in accordance with the competitive market and the medium-term electricity sale agreement. A few days ago, in accordance with the bilateral agreement, an additional 251 MW of electricity was approved for the Indian states, Bihar and Haryana. Out of this, 125.89 MW of electricity from two additional hydroelectric projects will be sold to Haryana through NVVN while 109.61 MW from two projects is currently being sold to Haryana. A total of 125 MW generated from 10 hydropower projects will be exported to the state of Bihar as per the mid-term agreement. The first export of electricity to Bihar and additional to Haryana will start soon after completing the technical process. 

Currently, 580.89 MW of electricity generated by 14 projects are being sold at competitive rates. Since the export of electricity in the amount approved a few days ago has not yet started, currently 690.50 MW of electricity is being exported to IEX and Haryana on a daily basis.

An additional 10 percent of the sanctioned quantity of electricity can be exported. Therefore, currently more than 700 MW of electricity is not being exported on a daily basis. Last year, electricity worth
Rs 16.93bn was imported from India. In the same period, electricity worth Rs 17.06bn was exported.

In the last year, Nepal became a net exporter of electricity from being a net importer by exporting
Rs 130m more than imports. The authority started exporting electricity from 3 June 2022. In the first stage, 39 MW was exported to India from Trishuli and Devighat hydropower stations. 

A long-term electricity agreement has also been signed between the two countries to export 10,000 MW of electricity in 10 years. Due to the political changes in Bangladesh, although final preparations to export 40 MW have been made, the export remains postponed.