Nepal Exports Electricity Worth Rs. 7.20 Billion To India In Four Months

Nepal Exports Electricity Worth Rs. 7.20 Billion To India In Four Months

Sept. 21, 2022, 8:11 a.m.

When he assumed the position of Managing Director of Nepal Electricity Authority (NEA) a year ago, Nepal wasted the surplus electricity worth of billion due to lack of export market.

As Ghising joined NEA for second tenure, there were mess left by his predecessor. NEA had to shut down its power plant because of its PPA signed with IPP on take and pay basis.

From first day of joining NEA as MD, Ghising’s concern was how to create export market for surplus electricity. With the efforts of Ministry of Energy, Water Resources and Irrigation and NEA’s technical preparation, Indian government has agreed to open its electricity market for Nepal.

The political level meeting held between Prime Minister Sher Bahadur Deuba and Prime Minister of India has finalized the deal making possible to export Nepalese electricity to India.

Following opening of Indian market for Nepalese electricity, Nepal has already exported electricity worth of Rs.7 billion in the last four months. For MD Ghising, this is a milestone in his carrier to open Indian market for export of electricity.

In just span over a year, MD Ghsing has already major breakthrough in the electric sector. The announcement of construction of 1061 MW Upper Arun is an historically important decision. With this announcement, NEA now moves to four digit projects. Started from two digit Chilime and completion of three digit Tamakoshi, Upper Arun placed itself as a main project.

According to Nepal Electricity Authority, in the second month of the current fiscal year 2022/23, electricity worth Rs. 2.42 billion has been exported to India.

Nepal Electricity Authority (NEA) exported 246.5 million units of surplus electricity in the Nepali month of Bhadra and earned Rs. 2.42 billion.

The Authority started selling the surplus electricity during the rainy season through competition in the day-ahead market of the Indian Energy Exchange Limited (IEX) from June 2, 2022.

In the beginning, 39 megawatts of electricity produced by two power plants was considered as a source and was sold to IEX on a daily basis. Since then, from June 10, 2022, 364 megawatts of electricity produced by six hydropower plants has been sold daily in the Indian market at a competitive rate.

The Authority has earned Rs. 7.19 billion by selling 787.8 million units of electricity in the Indian market in four months (Jestha, Asar, Shrawa and Bhadra).

Since the electricity trade with India is done in Indian rupees, during the period of four months, around IRs 4. 49 billion has entered into Nepal from the sale of electricity. In the month of Bhadra alone, IRs 1.51 billion has been earned from the sale of electricity.

NES estimates to export power worth Rs. 16 billion this fiscal year

MD Ghising said that the amount received from the increase in electricity export every month is contributing to the foreign exchange reserves of Nepal and reducing the trade deficit between the two countries.

He said, "In the current fiscal year, we have set a target of earning about Rs. 16 billion from the export of electricity. We estimate that electricity can be exported until the first week of Mangsir and when the export starts again after Jestha, the target will be met," he said.

"Now that the festivals are about to start, the domestic consumption of electricity will decrease a bit when the factories are closed, but since our production will be at full capacity, we have sent a proposal for approval for the export of about 200 megawatts of electricity. We are confident that the Indian side will give approval for the export of more electricity soon.”

In IEX, 24 hours are divided into 96 blocks of 15 minutes each and electricity is traded at a competitive rate set by the market.

Therefore, the price of each block is different. The average rate of electricity exported by the Authority in Bhadra is Rs. 9.80 per unit. The average rate for four months is Rs. 9.23 per unit.

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