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Nepal Secures Deal to Import 350 MW Power from Indian States This Winter

Nepal has reached a new agreement with India, opening the door to import up to 350 MW of electricity from the bordering states of Bihar, Uttar Pradesh, and Uttarakhand. The deal, finalized by the Power Exchange Committee, sets specific purchase rates for electricity delivered through different transmission lines for one year. This arrangement is crucial for Nepal during the winter dry season when its domestic hydropower generation falls short of demand. The agreement provides a safety net for Nepal's power supply, especially if prices spike or availability drops on India's open power exchange market.

Key Points: Nepal to Import 350 MW Power from Indian States Under New Deal

  • New bilateral deal for power imports
  • Rate increased by 1.5%, not 5.5%
  • Secures supply for dry winter months
  • Covers three bordering Indian states
3 min read

Door opens for Nepal to buy extra 350 MW of power from bordering Indian states

Nepal can now buy up to 350 MW of electricity from Bihar, UP, and Uttarakhand after a bilateral rate agreement, securing winter power supply.

"In case the purchase rate becomes higher... Nepal can purchase up to 350 MW through the Power Exchange Committee mechanism. - Hitendra Dev Shakya"

Kathmandu, March 13

The door has opened for Nepal to import up to 350 MW of electricity from neighbouring Indian states, including Bihar, Uttar Pradesh and Uttarakhand, after a new deal was reached between officials of the two countries during a two-day meeting of a bilateral mechanism which concluded in the western Pokhara city of Nepal on Friday.

Although Nepal exports electricity to India during the wet season, the Himalayan country needs to buy power from its southern neighbour in winter, when most of its run-of-the-river hydropower projects generate far less electricity than their installed capacity.

During a meeting of the Power Exchange Committee (PEC) - a bilateral mechanism consisting of the Nepal Electricity Authority (NEA) and India's Central Electricity Authority (CEA) - the two sides agreed to increase the power purchase rate by 1.5 per cent, paving the way for Nepal to continue importing electricity from the three Indian states during the winter.

As per the agreement, the purchase rate for electricity delivered through the 132 kV transmission line has been set at NPR 8.22 per unit. Likewise, the rate for electricity delivered through the 33 kV level has been fixed at NPR 8.91 per unit, while electricity purchased through the 11 kV line has been set at NPR 9.55 per unit, the NEA said in a statement on Friday. The rate is applicable for a year.

Following the latest agreement, the NEA expects electricity supply from India to remain secure during the dry months of March and April, when power demand typically rises in Nepal.

NEA Managing Director Hitendra Dev Shakya led the Nepali delegation, while Vijay Kumar Singh, board member (Power System) of India's Central Electricity Authority, led the Indian side.

Shakya told IANS that although the two sides agreed to raise the purchase rate, it will apply only when Nepal buys electricity through this mechanism.

"As long as prices are lower in the electricity exchange market, Nepal has been purchasing power from the power exchange market," he said. "In case the purchase rate becomes higher and electricity is not adequately available in India's power exchange market, Nepal can purchase up to 350 MW through the Power Exchange Committee mechanism."

According to the NEA, during the two-day negotiations, the Indian side had initially insisted on increasing the electricity purchase rate by 5.5 per cent, citing higher domestic production costs in India. However, the Nepali side argued for a lower rate, pointing to a decline in electricity prices in India's open power market.

At present, the NEA imports about 12,000-14,000 megawatt-hours of electricity daily from India, and the volume is expected to increase in the coming days as demand rises during the dry season.

The NEA also noted that the ongoing war involving Israel, Iran and parts of West Asia has put pressure on regional energy markets, which could affect electricity supply.

"The timely agreement with the Indian side is therefore expected to significantly help in managing power supply," the NEA said.

- IANS

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Reader Comments

P
Priya S
Good move. It shows India is a reliable partner. We sell them power when they need it, and they sell to us in the monsoon. This kind of interdependence is the future for South Asia. Hope we can have similar arrangements with Bangladesh and Sri Lanka to make the whole region energy secure.
R
Rohit P
While cooperation is good, I hope our own states like Bihar and UP don't face shortages because of this export. Our domestic needs must come first. The article says the rate is higher for Nepal, which is fair, but the grid management needs to be robust.
S
Sarah B
Interesting to see the detailed pricing structure based on transmission line voltage. The Nepali side negotiated well. It's a practical arrangement acknowledging seasonal variations. The mention of the West Asia conflict affecting energy markets is a sobering reminder of how interconnected everything is.
V
Vikram M
This is the Neighbourhood First policy in action. Solid diplomacy. It builds trust. When Nepal exports to us in the wet season, it helps our green energy goals. When we help them in winter, it shows we are a dependable big brother. More of this, please.
K
Karthik V
A respectful criticism: The article says the Indian side initially wanted a 5.5% hike citing higher production costs. Shouldn't we be focusing on bringing our own production costs down through better technology and efficiency, rather than passing it on to neighbours? Our power sector reforms need to continue apace.

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