Nepal earns Rs. 10.38 bn by exporting electricity to India, asks for permit for additional 23.5 MW

Nepal Electricity Authority has exported electricity worth Rs. 10.38 billion to India during the first five-and-a-half months after Nepal started exporting power to India since June 2022.

According to NEA, upwards of 1.26 billion units of surplus electricity were exported, earning Rs. 10.389 billion in revenue by mid-November, 2022.

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

Since the electricity trade with India is done in Indian rupees, during this period, around IRs. 6.49 billion has been brought into Nepal from the sale of electricity. This is contributing to improve Nepal’s foreign exchange reserves and reduce trade deficit with India.

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

With the start of electricity export from Chilime and Solukhola from November 4 and 5 respectively, the approved capacity of electricity exported to India has reached 409 megawatts.

Managing Director of NEA Kul Man Ghising said that as the flow of water in the rivers is decreasing, the export of electricity is also gradually decreasing along with the reduction of power generation from the hydroelectric power stations based on river flow.

“Industries are currently not taking electricity according to the approved load, due to which the demand for electricity in the industrial corridors in the country is not increasing. At present, it is likely that the excess electricity will be exported by the third week of December,” he said.

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 till mid-November is Rs. 8.23 per unit

The NEA has also received permission for electricity export from the Solukhola Hydropower plant with an additional 23.5 MW installed capacity of the rainy season.

On November 11, the Central Electricity Authority under the Ministry of Power of the government of India gave permission for the sale of electricity generated by Solukhola in the day-ahead market of IEX through competition. The NEA has now got permission to export 409 MW of electricity generated by 8 hydropower plants in the market.