Preparation of varied separate electricity tariff for wet and dry seasons

Nepal Electricity Authority (NEA) has started preparations to impose electricity tariff rates based on wet and dry season. During the wet season, the flow of water in the river is high and less in the winter, so the electricity production decreases accordingly. The authority has done its homework by making the tariff cheaper during the rainy season when electricity generation is high and keeping it relatively higher in winter.

Electricity generation in Nepal is heavily influenced by the distinct wet (monsoon) and dry (winter) seasons due to its over-reliance on Run-of-River (RoR) hydropower plants. While Nepal has become a net energy exporter during the wet season, it faces significant power deficits and relies on imports from India during the dry season. Other electricity generating plants are PRoR and Storage. The PRoR plants can generate electricity by storing water for few hours to generate electricity in peak hours. There are a few such run-of-river plants. Moreover, storage type of hydropower plants generate electricity with water stored in reservoirs. (Kulekhani is the only this type of hydroelectricity generating plant.) 

A hydropower plant

“Our aim is to encourage electricity consumption by making it cheaper during the year,” said Rajan Dhakal, a spokesman for the authority, to the Economic Campaign,” “Such a demand is also coming from the general consumer.”

Nepal has been exporting electricity to India and Bangladesh since the monsoon produces more electricity than the domestic demand. If the electricity produced is not exported, it goes wasted. This is also to be noted that due to delay of import permission by India, electricity goes wasted.

The spokesperson said that the authority has started preparing to impose different rates in the rainy and winter season with the aim of reducing the consumption of cooking LP gas by increasing the demand for electric power in the country. “The authority’s understanding is that by reducing the cost of increasing production, the use of electric stoves in cooking will increase and the consumption of gas will decrease,” he said.

“We have asked them to submit a study report on whether fixing the fee will affect the financial condition of the authority,” said Dr. Ram Prasad Dhital, ERC chairperson.

Due to the Iran war, the supply of petroleum products from the Gulf countries has been disrupted and the price of those goods has increased. The authority estimates that the use of electric mice will increase further if the electricity tariff is made more affordable at least in the rainy season. The fluctuation and shortage of petroleum products in the international market has put serious pressure on the energy security of countries dependent on imported fuel like Nepal.

He said that although this is one of the main ways to increase electricity consumption, it remains to be studied how much such a system increases consumption.

Kulekhani reservoir, the only storage type hydropower plant

The Energy Development Roadmap 2081, the target is to reach 15,000 MW of connected capacity and 1,500 units of electricity per person per year by 2030. At present, the country’s maximum demand is around 2,500 MW. The authority said that the per capita annual consumption was only 465 units in the last financial year.

According to the proposed new system, now the tariff of electricity will be different for winter and rainy seasons. There is a plan to make the tariff cheaper to increase the consumption as the domestic production will be more in the rainy season and the rate will be fixed on the basis of the cost of imported electricity in the winter.

Dr.Dhital said that this is an opportunity to reduce dependence on LP gas and fuel, adding that the price will be fixed to encourage the use of electric stoves (induction).

Encouraging the use of electric lights in the evening Chairman of ERC Dr. Dhital has said that in the coming days, preparations are being made to make electricity cheaper by increasing the use of electric stoves during the time except the ‘peak hour’ in the evening.

Dhital said that preparations are being made to implement ‘dynamic pricing’ through ‘smart meters’ installed in 1 lakh houses, especially in the Kathmandu Valley.

Under this, concession in tariff will be given to the customers who use induction at times other than peak hours. It is believed that this will help balance the load on the system and shift the load.

Similarly, Dr. Dhital said that users of meters above 15 amperes will be encouraged to promote induction and there are plans to expand the charging infrastructure for electric vehicles. He also says that an electric vehicle-friendly environment will be created by targeting public transportation rather than small vehicles.