Nepal Energy Foundation

Electricity could emerge as key export for Nepal—in the long run

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Nepal’s overdependence on imports has led to a swelling of its balance of payment deficit and rapid depletion of foreign exchange reserves.

Imports constitute nearly 90 percent of the country’s total international trade, and with Nepal lacking export materials, the balance of payment gap has been huge. Since export earnings are limited, the country largely relies on inflows of remittances sent by the migrant workers to fill the gap of foreign exchange requirements to sustain rising imports.

But the situation could change in the near future.

The country is set to have a promising export item—electricity.

In November last year, the Nepal Electricity Authority (NEA) started exporting its surplus power to India’s energy exchange market. Nepal earned around Rs180 million by selling electricity generated from two hydropower projects—the 24MW Trishuli Hydropower Project and the 15MW Devighat Hydropower Project—for over a month, according to the NEA.

From Wednesday midnight, the NEA started exporting surplus energy to India.

“We started selling 37.7MW electricity to Indian buyers from 12.15am on Thursday,” said Suresh Bhattarai, spokesperson for the Nepal Electricity Authority. “We have already sent a proposal to India Energy Exchange (IEX) for selling equivalent power on Friday also.”

In April this year, two important developments took place between Nepal and India which paved the way for Nepal to gain wider market access to India’s vast energy market and potentially certain parts of the entire South Asian region.

Prime Minister Sher Bahadur Deuba and his Indian counterpart Narendra Modi agreed on the Joint Vision Statement on Power Sector Cooperation which talks about strengthening cooperation on joint development of power generation projects in Nepal, and development of cross-border transmission infrastructure and bi-directional power trade with appropriate access to electricity markets in both countries based on mutual benefits.

The two sides also agreed to expand cooperation in the power sector to include their partner countries under the Bangladesh, Bhutan, India and Nepal (BBIN) framework, subject to mutually agreed upon terms and conditions between all involved parties.

On April 6, India allowed the NEA to sell additional 325MW of electricity generated from four hydel projects—Kali Gandaki (144MW), Middle Marsyangdi (70MW), and Marsyangdi (69MW)—all developed by the NEA, and Likhu 4 Hydropower Project (52.4MW) developed by the private sector.

With this, during the upcoming monsoon season, Nepal will be able to export 364MW of electricity, according to the power monopoly.

“Based on existing agreements with Indian authorities, we can sell electricity worth around Rs12–13 billion in the upcoming wet season,” said Kulman Ghising, the NEA managing director. “It will help the country earn foreign exchange.”

He believes the NEA could export more power in the wet season as more power projects are awaiting trade approval from the Indian government.

The export of electricity is becoming a real option at a time when the country is facing a balance of payments deficit of Rs.268.26 billion in the first three quarters of this fiscal against a surplus of Rs.42.54 billion in the same period of the previous year, according to the Nepal Rastra Bank. Balance of payment is the difference in total value between payments coming into and going out of the country over a period.

The gross foreign exchange reserves decreased by 18.2 percent to $9.61 billion in mid-April 2022 from $11.75 billion in mid-July 2021.

Ghising said there will be an energy surplus of 400-500MW in the upcoming monsoon and the power must be exported to save it from being wasted. The NEA has already invited bids from Indian companies to sell 200MW under long-term power purchase deal. It plans to export additional power through India’s power exchange market.

Amid a widening trade deficit, the government through the budget for next fiscal year 2022-23 has adopted a policy of maintaining trade balance in the next five years.

Besides import substitution through wider use of electricity in the country, the budget says that the country would also export surplus energy through bilateral and multilateral deals.

“Electricity can become an important revenue earning export item for the country as the market for Nepal’s electricity is just opening up,” said Ghising.

For electricity to become a tool to offset trade deficit, however, will take long.

Since most of Nepal’s power projects are run-of-river type, during the dry season, it falls short of electricity and it has to import energy from India.

In the last fiscal year 2020-21, Nepal imported electricity worth Rs22.48 billion, according to the NEA.

Nepal’s trade deficit with India stands at Rs814.1 billion and overall trade deficit stands at Rs1,306 billion in the first nine months of this fiscal year, according to the Trade and Export Promotion Centre (TEPC). Nepal’s overall exports stood at a paltry Rs160.57 billion during the same period.

“With exports, we can at least make up for the expenses incurred in importing electricity,” said Ram Prasad Dhital, former member of the Electricity Regulatory Commission which is responsible for fixing electricity tariff.

Experts say offsetting the trade deficit by exporting electricity is not possible in the short term, hence Nepal must continue to focus on manufacturing competitive products which it can export.

“Immediately, there is no potential of reducing the massive trade deficit by exporting electricity, but it can happen in the long run,” said Posh Raj Pandey, executive chairperson of South Asia Watch on Trade, Economics and Environment (SAWTEE), a South Asian think tank headquartered in Kathmandu. “But we should not worry about the trade deficit if the recent vision statement on power cooperation leads to a massive increase in Indian investments in Nepal’s power sector.”

According to Pandey, the vision statement has envisioned developing an integrated market at sub-regional level involving Bangladesh, Bhutan, India and Nepal (BBIN), which may help attract more investment in the power sector.

Stakeholders say with surplus energy, Nepal stands a chance of saving its foreign exchange reserves.

“With widespread adoption of electric vehicles and electric stoves, we can reduce the import of fossil fuels, which are the largest import items on which Nepal spends a huge amount of money,” said Ashish Garg, vice-president of the Independent Power Producers’ Association of Nepal (IPPAN), a grouping of the private sector power developers.

Nepal imported petroleum products worth Rs218.14 billion during the first nine months of the current fiscal year, according to the TEPC. Second, third, fourth and fifth largest import items include iron and steel; machinery parts; transport vehicles and their parts; and cereals, respectively.

“There is no other product in the country that can contribute as effectively as electricity to foreign exchange earnings,” said Garg.

Although the policy has been introduced to promote the use of electric goods and electric vehicles, no drastic measure towards that end has been taken yet. In 2014, the government introduced the Environment-friendly Vehicle and Transport Policy aimed at increasing the share of electric vehicles up to 20 percent by 2020. But the target could not be met.

Now the NEA has started work to set up charging stations for electric vehicles. The government in the budget for next fiscal year presented on Sunday said the NEA would run charging stations.

There were no concrete measures in place to make people switch to electric cooking. But in the new budget, the government has announced a ‘Let’s give up Liquified Petroleum Gas and use electricity’ campaign to promote the use of bio-gas, electric stove and improved stove. The government will provide such stoves to 100,000 households for free, according to the budget.

Nepalis still prefer cooking gas to electricity because of outages and power tripping.

“We need to make electricity available in the areas where fuel and cooking gas are mostly used,” said Dhital.

Former commerce secretary Purushottam Ojha said that Nepal should prioritise using electricity for industrialisation of the country.

“Obviously, power exports will help minimise the trade deficit to some extent,” he said. “But our focus should be on exporting manufactured goods. Electricity can play an important role in promoting both manufacturing and services industries.”

विद्युत्को व्यापार आर्थिक समृद्धिको आधार

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आजभन्दा एक सय १० वर्षअघि विसं १९६८ जेठ ९ मा पाँच सय किलोवाटको फर्पिङ जलविद्युत् केन्द्रबाट विद्युत् विकासको थालनी भएको नेपालमा हालसम्म एकीकृत नेपाल विद्युत् प्रणालीमा दुई हजार एक सय मेगावाटबराबर बिजुली जोडिएको छ । त्यसैगरी करिब पाँच हजार मेगावाटका विद्युत् आयोजना निर्माणाधीन छन् भने करिब नौ हजार मेगावाट क्षमताका आयोजना निर्माणको चरणमा प्रवेश गर्ने तयारीमा छन् । देशभित्रै उत्पादनमा भएका यी विद्युत् आयोजनाहरूको उत्साहजनक विकासले आर्थिक वृद्धिको ढोका खोल्ने निश्चित छ किनभने विद्युत् विकासको आधारभूत पूर्वाधार मात्र होइन समृद्धिको आधार पनि हो । उद्योग, यातायात, व्यावसायिक गतिविधि र हाम्रा भान्साहरूमा यो आधुनिक ऊर्जाको प्रयोगको स्तर विकासको स्तरको आँगन हो । बिजुली कसरी देशको समृद्धिको आधार बन्न सक्छ र बिजुलीको व्यापारबाट कसरी सहयोग गर्न सकिन्छ भन्नेबारे यहाँ चर्चा गर्न खोजिएको छ ।

समृद्धिको आधार : बिजुलीको स्वदेशी उत्पादनले हामीलाई बिजुलीमा आत्मनिर्भरताको अवस्थामा ल्याउँछ । यसले धेरै हिसाबले मुलुकको समृद्धिमा योगदान पु-याउँछ । सबैभन्दा पहिले पर्याप्त मात्रामा बिजुलीको उपलब्धताले उद्योग, यातायात र व्यावसायिक गतिविधिहरूमा विद्युत् खपतको स्तरमा वृद्धि गर्नेछ । बिजुली उत्पादनको एक महत्वपूर्ण सामग्री हो र बिजुलीको बढ्दो उपलब्धता र खपतले कुल गार्हस्थ्य उत्पादन (जीडीपी) वृद्धिमा योगदान पु-याउँछ । कुनै देशको विकासको मुख्य सूचक जीडीपीलाई लिने गरिन्छ तर यसको सहसम्बन्ध कारक देशहरूका लागि विकासको विभिन्न चरणहरूमा फरक–फरक हुन सक्छ । हाम्रोजस्तो अल्पविकसित देशका लागि यो सहसम्बन्धको कारक मुख्य रहेको छ । बिजुलीको मागमा करिब १ दशमलव ९ प्रतिशत वृद्धिले १ प्रतिशत आर्थिक वृद्धि पनि गर्नसक्ने केही अध्ययनहरूले देखाएको छ । त्यसैले यस चरणमा नेपालले ७ दशमलव ५ प्रतिशत आर्थिक वृद्धिको लक्ष्य राखेमा विद्युत्को माग करिब १४ दशमलव २५ प्रतिशतले बढ्नुपर्छ । ठूला उत्पादन र प्रशोधन उद्योग स्थापना र सञ्चालनले कुल गार्हस्थ्य उत्पादनमा १ प्रतिशत वृद्धि गर्न सक्छ र त्यस्ता उद्योगहरूले पर्याप्त विद्युत् खपत गर्छन् ।

वर्षभरि गुणस्तरीय सुनिश्चित नगरेसम्म स्वदेशी वा विदेशी लगानीकर्ताले यस्ता उद्योगमा लगानी गर्दैनन् । तर घरेलु उत्पादनका साथै सीमावर्ती बजारमा व्यापार गरेर वर्षैभर गुणस्तरीय बिजुली सुनिश्चित गर्न सकिन्छ । आवश्यक मात्रामा आपूर्तिको उपलब्धताले परम्परागत साना तथा मझौला उद्योगहरूलाई विद्युतीयरूपमा आधुनिकीकरण गर्न, विद्युतीय सवारीसाधन र सिँचाइ प्रणालीको प्रयोग र ठूला उद्योगहरूको स्थापना गरी कुल गार्हस्थ्य उत्पादन बढाउन प्रोत्साहित गर्न सक्छ ।

दोस्रो, आन्तरिक उत्पादनले व्यापारघाटा कम गर्नेछ । केन्द्रीय बैंक अर्थात् नेपाल राष्ट्र बैंकले सार्वजनिक गरेको तथ्यांकले चालू आर्थिक वर्षको पहिलो छ महिनाको अवधिमा मुलुकको वस्तुगत व्यापारघाटा ४६ दशमलव ६ प्रतिशतले बढेर सोही अवधिमा आठ सय ८० अर्ब ४९ करोड रुपैयाँ व्यापारघाटा रहेको देखाएको छ । यसले निर्यातको तुलनामा वस्तुको आयात धेरै भएको प्रस्ट हुन्छ । ऊर्जासँग सम्बन्धित वस्तुहरू इन्धन र बिजुलीको आयातले यो आयातमा ठूलो योगदान पु-याउँछ । नेपालले सबै इन्धन भारतबाट आयात गर्ने भएकाले यो व्यापारघाटाको प्रत्यक्ष श्रेय भारतलाई परेको छ । व्यापार सन्तुलन आर्थिक समृद्धिका लागि मात्र नभई मुलुकको समग्र अर्थतन्त्रको स्थायित्वका लागि महत्वपूर्ण हुन्छ र व्यापारघाटाको बढ्दो ग्राफले त्यो स्थायित्वलाई खतरामा पार्छ ।

प्रचुर जलविद्युत् सम्भावना नेपालको तुलनात्मक लाभको क्षेत्र हो । ठूलो मात्रामा विद्युत् उत्पादनको लागि यो तुलनात्मक लाभको सदुपयोग गर्नाले जीवाष्म अर्थात् खनिज इन्धनको आयातलाई प्रतिस्थापन गर्न र व्यापार सन्तुलनमा योगदान दिन विदेशी मुद्रा विदेशिनबाट रोक्न सक्छ । बिजुलीको पर्याप्त उपलब्धताले इन्धनसम्बन्धी वस्तुको आयात मात्र होइन, अन्य उपभोग्य वस्तुको आयातलाई पनि नियन्त्रण गर्छ किनभने यसले उद्योग र औद्योगिक उत्पादनलाई बढावा दिन सक्छ । विदेशी मुद्रा बहिर्गमन हुनबाट रोक्न, आयात प्रतिस्थापन गर्न र नगद प्रवाहको लागि स्वदेशमा उत्पादित वस्तुहरूको निर्यात व्यापारलाई वृद्धि गर्न सकिएमा व्यापारघाटा न्यूनीकरण गर्न सकिन्छ । तर हिमाली नदीको प्रवाहमा आउने फेरबदलका कारण विद्युत् आपूर्तिमा हुने मौसमी घाटालाई सीमावर्ती बजारमा विद्युत्को व्यापार वृद्धि गरेर फाइदा लिन सक्नु पर्दछ ।

तेस्रो, देशमा उत्पादित अतिरिक्त बिजुलीलाई सीमावर्ती बजारमा निर्यात गर्न सकिन्छ जसले गर्दा नगद प्रवाह हुन्छ । यसले नेपालको हितमा व्यापार सन्तुलन सकारात्मक हुन सक्छ । नेपालले आन्तरिक उपभोगभन्दा माथिको उत्पादन निर्यात गर्न सीमावर्ती बजारहरू खोजिरहेको छ । हाल नेपालमा विद्युत् उत्पादन वर्षाको समयमा मात्र बढी हुन्छ र खपतभन्दा उत्पादन धेरै हुँदा खेर जाने अवस्था छ भने हिउँदमा आन्तरिक माग धान्न सक्दैन र भारतबाट आयात गरी पूर्ति गर्ने गरिएको । भारत, बंगलादेशलगायतका छिमेकी मुलुकहरू हाम्रा लागि ठूलो बजार हुन् । बंगलादेशले छिमेकी मुलुकबाट हजारौँ मेगावाट बिजुली आयात गर्न खोजिरहेको छ । बंगलादेशले छिमेकीसँग १० हजार मेगावाट किन्न तयार रहेको जनाएको छ । त्यसमध्ये नेपालबाट तत्काल सात सय ५० मेगावाट किन्छु भनिसकेको अवस्था छ । त्यति भए पनि तत्काल निर्यात गर्न सकियो भने झण्डै ३० अर्बको व्यापार हुन्छ । नेपालले अहिले पनि वार्षिक २० अर्ब रुपैयाँको बिजुली आयात गर्दै आएको छ जसलाई मौसमी निर्यातबाट पूर्ति गर्न सकिन्छ ।

नेपालको जलविद्युत्को सम्भावना र सीमावर्ती बजारमा पहुँचले यसलाई दक्षिण एसियाको पावर हाउसमा परिणत गर्न सक्छ र नेपालमा उत्पादन हुने जलविद्युत् नेपालको मात्र नभई सम्पूर्ण दक्षिण एसिया क्षेत्रको समृद्धिको जग बन्न सक्छ । विकासको दौडमा पछाडि परेका दक्षिण एसियाका देशहरूका लागि यो आशीर्वाद हुन सक्छ । विद्युत्को क्षेत्रीय बजारका लागि दक्षिण एसियाली मुलुकहरूबीचको राम्रो समन्वय र समझदारी नै यी देशहरूको समृद्धिको मुख्य आधार हो । बेलायतको ग्यास्लोमा भएको जलवायु परिवर्तनसम्बन्धी सम्मेलनले सफा र वातावरणमैत्री ऊर्जाको लागि निश्चित निर्देशनहरू गरेको छ । यस सम्मेलनकमा प्रतिबद्धताहरू अन्तर्गतको दायित्वले छिमेकी राष्ट्रहरूलाई नेपालबाट ठूलो मात्रामा जलविद्युत् आयात गर्न प्रोत्साहन र बाध्य पार्न सक्छ । यो नेपालका लागि अवसर हुनेछ ।

के गर्न आवश्यक छ ? समृद्धिको राष्ट्रिय सपना विद्युत्मा आत्मनिर्भरता, परम्परागत र आधुनिक आयातित इन्धनको प्रतिस्थापन मुलुकमा उत्पादित विद्युत्बाट, बिद्युत्को आन्तरिक बजारको विकास र सीमावर्ती बजारमा पहुँचसँग प्रत्यक्ष जोडिएको छ । यसरी दुई अंकमा तीव्र आर्थिक वृद्धिको सरकारको लक्ष्य हासिल गर्ने आधारस्तम्भको रूपमा विद्युत््लाई मानिन्छ । आन्तरिक माग पूरा गर्न र सीमावर्ती बजारमा रहेको बचतको निर्यातलाई पर्याप्त मात्रामा उत्पादन गर्न ठूलो आर्थिक लगानीको आवश्यकता मात्र नभई मुलुकमा बिद्युत्को विकासका लागि समग्र वातावरण सकारात्मक छ । यसले नीति, कानुनी, नियामक, संस्थागत सुधार र आवश्यक सहयोगी पूर्वाधार निर्माण गर्न माग गर्नेछ । यस प्रक्रियामा निजी क्षेत्रलाई महत्वपूर्ण भूमिका खेल्न सहज बनाउन पनि सुधारहरू लक्षित हुनुपर्छ । विद्युत्को जीवन्त क्षेत्रीय बजार र प्रसारण कनेक्टिभिटी निर्माण गर्न यस क्षेत्रका देशहरूसँग समानान्तर रूपमा बृहत्तर समन्वय र सहयोग उच्च मात्रामा विद्युत्को व्यापार गर्न आवश्यक छ ।

अन्तरदेशीय विद्युत् व्यापार : चाहना या आवश्यकता

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नेपालमा विद्युत माग र आपूर्ति अवस्था : आजभन्दा करिब चार/पाँच वर्षअघि विद्युत् मागको तुलनामा आपूर्ति अत्यन्त न्यून भएका कारणले नेपाली विद्युत् उपभोक्ताले दैनिक १४ घण्टासम्मको विद्युत् कटौती भोग्नुपरेको तुलनामा हाल विद्युत् आपूर्तिमा उल्लेख्य सुधार भएको छ । हाल विद्युत् उत्पादनको कुल जडित क्षमता दुई हजार मेगावाटभन्दा बढी छ भने अधिकतम विद्युत् माग १५ सय मेगावाटको हाराहारीमा छ । यसरी हेर्दा नेपालले पहिलोपटक विद्युत् उत्पादन र उपयोग गरेको एक सय १० वर्षपछि बल्ल विद्युत्मा मौसमी आत्मनिर्भरताको अवस्थामा पुगेको छ । कुल जडित क्षमता र अधिकतम विद्युत् मागलाई दृष्टिगत गर्दा पूर्ण क्षमतामा विद्युत् उत्पादन हुने वर्षायाममा नेपालले लगभग पाँच सय मेगावाट निर्यातसमेत गर्ने अवस्था सिर्जना भएको छ ।

केही वर्षभित्र विद्युत् आपूर्तिमा आएको यस चामत्कारिक सुधारको ठूलो श्रेय देशको सबैभन्दा ठूलो जलविद्युत् आयोजना चार सय ५६ मेगावाटको माथिल्लो तामाकोशीलाई जान्छ । यो आयोजना सम्पन्न भएपछि देशको विद्युत् उत्पादन क्षेत्रले साँच्चै फड्को मरेको छ । यसै आयोजनाका कारण भारतबाट २० अर्ब रुपैयाँ खर्चेर लगभग आठ सय मेगावाट विद्युत् आयात गरिरहेको नेपाल आन्तरिक माग पूरा गरेर विद्युत् निर्यातको अवस्थामा पुगेको छ । अवस्था कतिसम्म आशलाग्दो छ भने अबको पाँच वर्षभित्र नेपालको आफ्नो विद्युत् उत्पादन क्षमता पाँच हजार मेगावाट नाघ्ने देखिएको छ ।

प्रणालीगत समस्या : विद्युत् उत्पादनले मात्र आमविद्युत् उपभोक्ताले निर्विघ्न उपभोग पाएका छैनन् । यसका दुई कारण छन् :
पहिलो कारण भनेको अपर्याप्त विद्युत् प्रशारण र वितरण क्षमता हो । विद्युत् प्रसारण र वितरण क्षमताको अभावमा कतपय औद्योगिक कोरिडोरमा अझैसम्म विद्युत् कटौती जारी छ भने कमजोर वितरण प्रणालीका कारण गार्हस्थ्य उपभोक्ताले विद्युत्मा खान बनाउनेजस्ता उपयोग खुलेर गर्न पाएका छैनन् । यसरी प्रणालीमा उत्पादन क्षमता हुँदाहुँदै पनि उपभोग गर्ने सीमितताले वर्षायाममा विद्युत् खेर जाने अवस्था छ । उत्पादित विद्युत् स्वदेशमै खपत गर्न प्रसारण तथा वितरण प्रणालीको क्षमता वृद्धि, विस्तार एवं सुदृढीकरण आवश्यक छ ।

दोस्रो कारण भनेको अधिकांश जलविद्युत् उत्पादन आयोजना नदी बहाव प्रणालीमा आधारित छन् । यद्यपि केही आयोजनामा दैनिक जलसञ्चय गर्न सकिने पिकिङ सुविधा छ । तथापि, जलप्रवाहमा आधारित आयोजनाहरूको सुख्खायामको उत्पादन जडित क्षमताको एक तिहाइ मात्र हुने गरेको छ । यसकारण हालको जडित क्षमताले सुख्खा याममा बढीमा आठ सय मेगावाट उत्पादन गर्न सक्छ । लगभग चार सय मेगावाट थप उत्पादन पिकिङ सुविधाबाट भए पनि अझै पनि तीन सय मेगावाट भारतबाट आयात नगरी साँझको अधिकतम विद्युत् माग आपूर्ति हुन सक्दैन ।

अन्तरदेशीय विद्युत् व्यापार : समस्याको भरपर्दो समाधान
विद्युत् उत्पादन क्षमताको बढ्दो ग्राफले जति आशावादी बनेको छ, विविध कारणले विद्युत्को आन्तरिक खपतको सीमितता र उत्पादनमा मौसमी प्रभावले प्रणालीमा गम्भीर असन्तुलनको सङ्केत समेत गरेको छ । जुनसुकै प्रकारको असन्तुलनले अन्त्यमा वित्तीय क्षति निम्त्याउँछ र विद्युत् क्षेत्रमा पनि त्यस्तो क्षति आसन्न भइसकेको आभास हुन्छ । नेपाल विद्युत् प्राधिकरण लेउ वा तिर (टेक अर पे)का आधारमा गरेका विद्युत् खरिद सम्झौताअनुसार वर्षायाममा उत्पादन हुने विद्युत्को बजारीकरण गर्ने सकेन भने नेपाल विद्युत प्राधिकरणले उत्पादकलाई, उत्पादकले ऋण प्रदायक बैंकलाई र बैंकले सञ्चयकर्तालाई रकम तिर्न सक्दैन । यसले गम्भीर आर्थिक सङ्कट निम्तिन सक्छ । अर्कोतर्फ उत्पादन क्षपता पाँच हजार मेगावाट पुगे पनि सुख्खायाममा १५/१६ सय मेगावाट मात्र उत्पादन हुने हुँदा सुख्खायाममा आन्तरिक खपतका लागि अझै विद्युत् नपुग हुने भइरहन्छ । वर्षात्मा बढी र सुख्खायाममा विद्युत् नपुग हुने यी दुईटै समस्याको समाधन तत्काल आन्तरिक बजारमा छैन । यसको समाधान खोज्न अन्तरदेशीय बजारमा जानु पर्छ ।

वर्षायाममा आन्तरिक खपतपछि बढी हुने विद्युत् उत्पादन गरेर अन्तरदेशीय बजारमा अन्तरदेशीय बजारमा बेच्ने र सुख्खायाममा मौसमी कारणले आन्तरिक उत्पादनमा हस आउँदा नपुग विद्युत् अन्तरदेशीय बजारबाट खरिद गरी आन्तरिक बजारमा आपूर्ति गर्ने मोडेल नै हाम्रासामु देखापरेका समस्याहरूको समाधान हो । तसर्थ, अन्तरदेशीय बजारमा पहुँच बनाई विद्युत् व्यापार गर्ने हाम्रो चाहना वा रहर होइन, हाम्रो विद्युत् प्रणालीको माग आपूर्ति सन्तुलन सँगसँगै वित्तीय सन्तुलनका लागि पनि अन्तरदेशीय विद्युत् व्यापार हाम्रो चाहना नभई अवश्यकता हो ।

अन्तरदेशीय विद्युत् व्यापारसम्बन्धी प्रयासहरू
पछिल्लो समय छिमेकी मुलुकहरूसँग व्यापार मोडेलमा विद्युत् आदानप्रदान गर्न केही द्विपक्षीय नीतिगत र पूर्वाधारसम्बन्धी सकारात्मक प्रयास भएका छन् । सन् २०१४ मा नेपाल र भारतबीच सरकारीस्तरमा विद्युत् व्यापार र ग्रिड संयोजनसम्बन्धी सम्झौता भएको छ । त्यस्तै नेपाल र बंगलादेशबीच सन् २०१८ मा दुई देशीय विद्युत् व्यापारलाई प्रवर्द्धन गर्न समझदारीपत्रमा हस्ताक्षर भएको छ । यसैगरी सन् २०१८ मा नेपाल र चीनबीच सीमापार प्रसारण लाइन एवं ग्रिड विकास, नवीकरणीय ऊर्जा विकास, जलविद्युत् एवं अन्य ऊर्जा आयोजना विकासका लागि सहयोग प्रवद्र्धनसम्बन्धी सम्झौतामा हस्ताक्षर भएको छ ।

अन्तरदेशीय विद्युत् आदानप्रदानसम्बन्धी पूर्वाधार सम्बन्धमा नेपाल–भारत बीच उच्च भोल्टेजको ढल्केबर–मुजफरपुर चार सय केभी प्रसारण लाइन आयोजना सम्पन्न भएको छ भने बुटवल–गोरखपुर चार सय केभी प्रसारण लाइन आयोजना निर्माणमा महत्वपूर्ण समझदारी भैसकेको छ । त्यस्तै संयुक्त राज्य अमेरिकाको सहयोग नियोग एमसिसीमार्फत प्राप्त अनुदान सहयोगले देशभित्र अन्तरदेशीय विद्युत् व्यापारलाई समेत सघाउ पुग्ने उच्च क्षमताको चार सय केभी प्र्रशारण लाइन निर्माण गर्ने सम्झौतासमेत भएको छ । यी सबैले एकातर्फ देशभित्र विद्युत् प्रसारणको मेरुदण्ड तयार हुन्छ भने अर्कोतर्फ अन्तरदेशीय विद्युत् व्यापार समेत सहज हुन्छ । मुजफ्फरपुर–ढल्केबार चार सय केभी प्रसारण लाइन आयोजनाले यस कुराको पुष्टि गरिसकेको छ ।

यसका अतिरिक्त केही दक्षिण एसिया क्षेत्रीयस्तरका बहुपक्षीय नीतिगत समझदारी समेत भएका छन् । विद्युत् उत्पादनमा वृद्धि र ग्रिड सुरक्षा अभिवृद्धि गर्दै सार्क सदस्य राष्ट्रहरूबीच सन् २०१० मा अन्तरदेशीय विद्युत् व्यापार र विद्युत् आदानप्रदानका लागि आपसी सहयोग र सहकारी अभिवृद्धि गर्न सार्क ऊर्जा सहयोगसम्बन्धी सम्झौता भएको थियो । त्यसैगरी ऊर्जाका विभिन्न स्रोतहरूको अधिकतम उपयोग गर्न, ग्रिड संयोजन (आबद्धता)लगायत ऊर्जासँग सम्बन्धित पूर्वाधार विकास गर्न तथा अन्तरदेशीय विद्युत् व्यापारलाई सहयोग तथा सम्वर्द्धन गर्न सन् २०१८ मा बिमस्टेक ग्रिड अन्तर–आबद्धतासम्बन्धी समझदारीपत्रमा हस्ताक्षर भएको छ । यस्ता द्विपक्षीय र क्षेत्रीय सम्झौता तथा समझदारी कार्यान्वयन पक्षहरू प्रतिबद्ध हुनु आवश्यक छ । भारतले आन्तरिक रूपमा विद्युत् आयात–निर्यात निर्देशिका जारी गरेको छ भने नेपालले समेत विद्युत् व्यापारसम्बन्धी कार्यविधिको मस्यौदा तयार परिसकेको छ । नेपाल सरकारले संसदमा पेस गरेको नया विद्युत् विधेयकमा विद्युत् व्यापारलाई व्यवसायको मान्यता दिई विद्युत् व्यापार अनुमति पत्रको व्यवस्था गरिएको छ र केही विद्युत् व्यापार कम्पनी दर्ता समेत भइसकेका छन् ।

अन्तरदेशीय विद्युत् व्यापार प्रवर्द्धनमा वैदेशिक सहयोग
दक्षिण एसियाली क्षेत्रीय सहयोग सङ्गठन (सार्क) अन्तर्गत स्थापित सार्क इनर्जी सेन्टर इस्लामावादले सार्क क्षेत्रमा ग्रीड संयोजन र विद्युत् व्यापार प्रवर्द्धनका लागि क्षेत्रीय प्रयास गरिरहेको छ । यस्तै अमेरिकी सहयोग नियोग युएसएडले सन् २००० देखि नै साउथ एसिया रिजनल इनिसिएटिभ अन इनर्जी र इनर्जी इन्टिग्रेसन कार्यक्रम सञ्चालन गरेर क्षेत्रीय विद्युत् व्यापारको आधार तयार गर्न महत्वपूर्ण सहयोग गरेको छ ।

यी विभिन्न नीतिगत व्यवस्था, पूर्वाधार निर्माण र विद्युत्लाई व्यापारजन्य वस्तुको रूपमा लिन सकिन्छ भन्ने सोचका कारण आगामी दिनमा नेपालको विद्युत् स्वदेशी खपतसँगै छिमेकी मुलुकहरूमा निर्यातको सम्भावनालाई बढाएको छ । यसले आयातित इन्धनको खपतलाई न्यून गर्न र बढ्दो व्यापार घाटालाई कमी गरी मुलुकको आर्थिक विकासमा समेत महत्वपूर्ण टेवा पुग्ने देखिन्छ । 

Cross Border Electricity Trade For Social Transformation In Nepal

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Generation and use of electricity heralded in Nepal during the time of Rana Prime Minister Chandra Shamsher after the 500 kW Farping hydroelectric power plant was constructed and commissioned in 1911 AD. Although, this first use of electricity was limited to palaces of ruling Ranas, royalties and their relatives, this event is accounted as the beginning of the age of electricity use in Nepal. While Farping power house was illuminating limited affluent class households within Kathmandu valley, rest of Nepal had to manage with natural light or the oil lamps. Sorry to mention that this situation still prevails in remote parts of the country.

In-country Electricity Generation versus Import 

During forties of twentieth century i.e. the last decade of Rana regime, once again discussions started for construction of electricity generation projects. Around the same time, Vijay Shamsher, son of last Rana Prime Minister Mohan Shamsher had returned Nepal after studying Geology in Europe. In 1946 AD, Vijay Shamsher submitted his proposal to his father and Prime Minister Mohan Shamsher for generating 22 MW electricity by constructing a dam in Kaligandaki River at a location little upstream of current religious site Devghat. Mohan Shamsher also agreed to this proposal. Calculated per kWh (unit) cost of electricity so generated was 6 paisa.  Since British rulers in India were the real power source of Ranas, Mohan Shamsher briefed the scheme of electricity generation at Devghat to British rulers of India.

British rulers suggested that British India could help Neal by supplying electricity at a rate of 3 paisa per unit so there is no sense in investing for such costly electricity by Nepal. Nepal should rather invest this money in some another program. The then Nepalese government headed by Prime Minister Mohan Shamsher did not counter argue and convinced with the suggestion of British rulers of India, dropped the idea of developing Devghat Hydropower plant as Vijay Shamsher’ s dream project.

So choosing to purchase electricity from India compared to in-country generation became a 75 years old idea for Nepal. There are no records if any electricity was purchased from India after this event but considering the history of development of transmission and distribution infrastructure, there could not have been any import of electricity from India immediately after dropping the power generation plan at Devghat. Nepal started importing electricity from India around 1966 AD after the Kosi Agreement was inked and construction of Kosi project commenced but exact quantum of import and price of this first import is not available in records. But there are historical records that Nepal was importing 5 MW from India in 1970 AD.  Thus Nepal and India started bilateral transaction of electricity during seventh decade of twentieth century although for very long time the transaction was unidirectional towards Nepal. Nepal had compulsion to purchase due to a decision taken in 1946 AD and remained as net importer.

State has the obligation of lighting the houses of citizens even if the target of generating electricity within country is not met and hence import of electricity has remained a compulsion for Nepal. Quantified impact of this import of electricity in the socio-economic sector is a subject of study. Likewise Nepal; Bhutan, Bangladesh and Myanmar that also have common borders with India are also transacting electricity with India. Nepal and Bangladesh are net importers whereas Bhutan exports around 1700 MW to India during the Wet season.

Quantum of Import

During sixties of twentieth century, 11 k V and 33 k V lines in the border points of Bihar State were extended to bordering  Nepalese towns and Nepal started import of electricity from these nearest Indian points. Then such import extended from border points of Uttar Pradesh and Uttara khand as well. Today, there are about a dozen points for such cross border transaction at 11 k V, 33 k V, 132 k V and even 400 k V. The Nepal grid is split into three grids likewise east-west, north-South and cross border.The 400 kV level grid in Nepal is under synchronous operation with the Indian grid. Although Power Exchange Committee had been the bilateral instrument for transaction of electricity between Nepal and India, both countries signed Power Trading Agreement (PTA) in 2015 that has become the principal bilateral instrument for cross border trading of electricity between Nepal and India.

PTA, in principle, envisages non-discriminatory cross border trading of electricity and opens door for transactions at larger volume. Although the post PTA trading has not reached its expected level but there have been optimistic volume increments in bilateral trading between Nepal and India. Nepal has also started exporting electricity to India during Wet season though a small volume only. That way post PTA period is acknowledged as period of achievements by Nepal in the context of cross border trading of electricity owing to gains in volume and direction of transaction. Nepal imported upto 847 MW from India during dry season of 2020-21 while upto 150 MW was exported during the wet season of the same year. In the year 2021, Nepal has got access to Indian Power Exchange where Nepal can exercise trading in the Day Ahead Market (DAM). Nepal has also got permission for six months since October 30, 2021 to sell 39MW electricity in DAM. Thus Nepal has been able register its formal presence in the India electricity market despite that there are few procedural and regulatory hurdles for full scale access to Indian electricity market.

Social Changes

500 k W electricity from Farping power house in 1911 could illuminate only limited houses in Kathmandu valley. Installation of more hydropower projects and diesel generators expanded the electricity service outside valley in due course of time. This expansion not only provided lighting but also supported to activities like cottage industries to ease the life of people. This contributed to socio-economic development also. Today 95% of the Nepalese population has access to electricity. Country was facing long hours of power cuts a few years back despite the imports through available infrastructure. The situation is not imaginable if there was no import during those supply deficit days. Cross border electricity trade is also supporting government’s plan for access to electricity to 100% Nepalese population by 2023. Possibilities of import are letting government to go aggressively for electrification. Availability of electricity is not only replacing the lighting through kerosene lamps but also substituting biomass fuel for cooking in rural areas and thus controlling the deforestation also. This also has positive impacts to control household pollution and associated health problems among the housewives. Now there are plans to substitute LPG being used for cooking in urban and sub-urban areas. This will further improve the use of electricity.


Adequate availability of electricity makes life easier through use of household appliances like refrigerator, washing machine, electric cooktops etc. The time saved so can be used in other productive works to improve overall GDP of the country. Thus availability of round the clock adequate electricity supported by cross border trading has contributed to and will continue to contribute for better life of Nepalese people and socio-economic development of the country.

Nepal Experience Of Power Trade Agreement: Failures Led To Success

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Nepal and India share almost 6 decades of bilateral transaction of electricity although records of such transaction are available since 1970 AD only. There are no proper records for about a decade prior to 1970 AD. Despite the abundance of potential for hydro power in the country, the transaction remained unidirectional due to lack of proper planning and its implementation and Nepal kept importing power from India. Though, it has been almost three decades since Nepal started exploring export of electricity to India but still most Nepalese doubt that Nepal will be able to export electricity in large volumes.

History of Power Trading Agreement with India

First elected government after the popular movement of 1990 was led by Gririja Prasad Koirala as Prime Minister But this government could not survive its full term as Girija Prasad Koirala dissolved the parliament and declared mid-term polls. After the mid-term polls UML party emerged as largest party without majority and formed minority government led by its leader Man Mohan Adhikari. Idea of a Power Trade Agreement between Nepal and India was floated by this government.

On April 6, 1995 Minister for Water Resources Mr. Hari Prasad Pandey of this government gave approval to authorities of the ministry to draft the Power Trade Agreement and initiate process its implementation. This was the time when parallel discussions on Mahakali Integrated Treaty and Power Trade Agreement were ongoing between Nepal and India.

The draft of Power Trade Agreement prepared during Mr. Hari Prasad Pandey’s ministerial term was initiated by Dr. Dwarikanath Dhungel, Secretary Ministry of Water Resources His Majesty’s Government of Nepal and his Indian counterpart Mr. P. Abraham on February 17, 1996 which was finally signed later by Mr. Rajiv Parajuli, Minister of State for Water Resources His Majesty’s Government of Nepal and Dr. S. Venugopalachari, Minister of State for Power, Government of India on June 5, 1997.

Article 8 of this Electric Power Trade Agreement required it to be ratified but it could not be presented in the Nepalese parliament for ratification as there was a debate in Nepal that Power Trade Agreement was kind of sharing of natural resources and required two third majority in the parliament for its ratification. Ultimately the signed agreement became void in absence of exchange of notes of ratification by respective parties.

Experience of Failures

Attempts of Power Trade Agreement between Nepal and India suffered three failures. First attempt was initiated 25 years back during Mr. Hari Prasad Pandey’s ministerial period could not be materialized. The Electric power Trade Agreement signed in 1997 could not even be tabled in the Nepalese parliament due to domestic politics.

The then constitution required two third majority in the parliament for the ratification of an agreement or treaty involving sharing of natural resources of the country and unfortunately the Electric Power Trade Agreement was linked with this provision of the constitution.

Electric Power Trade Agreement should have been understood as an extension of Trade and Transit Treaty as it is transaction of finished product electricity instead of any natural resource. Negative impact of not ratifying this Agreement was realized soon when Nepal became power surplus country immediately after commissioning of Kali Gandaki-A Hydropower project in 2002AD and Nepal wished to export the surplus power.

Generation expansion was almost on halt after 2002 and the surplus situation remained until 2007/8 only.  Severe supply deficit after 2008/9 was apparent in 2007 itself. Nepal again started importing after 2008 under the bilateral instrument of  Power Exchange Committee. Any deficit after this import was managed through load shedding. There was negligible generation capacity addition during the period from 2002 to 2010 and obviously country faced the unpleasant load shedding.

For immediate relief from load shedding, Nepal explored diplomatic channels to reinforce the existing cross border infrastructure to import more from India. We must appreciate that India helped by reinforcing many medium voltage cross border lines to enhance the level of power transaction from 50 MW to above 200 MW.  Indian Foreign Ministry allocated special budget for these reinforcements.

Indian import policy 2009 -2014 declared electricity as imported restricted item making import of electricity by Indian entities or export by entities of neighboring countries including Nepal very difficult. But Nepal was not directly affected by this policy as Nepal did not have surplus power to export until 2021. But however, this Indian import policy discouraged investments in Nepal on generation projects targeting export to India.

Facing the severe load shedding, Nepal prepared Energy Crisis Mitigation Plan in 2010. The plan had short term, medium term and long term measures to minimize and manage the supply deficit.

Operating all generation plants at full capacity by necessary repair and maintenance was identified as short-term measure, reinforcing existing cross border lines for more imports as mid-term measure and accelerating the progress of under construction generation projects by giving them special incentives as well as construction of high capacity cross border line between Nepal and India as long-term measures.

As second attempt of Power Trade Agreement, Nepal prepared another draft of Power Trade Agreement in 2010 and sent it to India through diplomatic channels. India did not respond on this draft for four years and this second draft became void in absence of a response from India.

Very soon after Narendra Modi took over the Prime Minister’s Office in 2014, as third attempt of power Trade Agreement, Nepal received a complete new draft instead of making comments on the draft sent by Nepal earlier in 2010. The Indian draft was more of a cooperation agreement on development of hydropower in Nepal and its marketing in blanket. This Indian draft was not welcomed by Nepal as Nepal were not comfortable with a blanket cooperation agreement in the lines of Indo-Bhutan cooperation. Ultimately this Indian draft as third attempt also became void.

Power Trade Agreement Finally Concluded and Made Effective

Modi government, though not satisfied with Nepal’s Position, agreed to jointly draft and sign a Power Trade Agreement instead of Cooperation Agreement. Accordingly “Agreement between the Government of Nepal and the Government of the Republic of India on Electric Power Trade, Cross border Transmission Interconnection and Grid Connectivity” was drafted jointly and signed on October 21, 2014 by Mr. Rajendra Kishore Kshatri, Secretary Ministry of Energy, Government of Nepal and Mr. Pradeep Kumar Sinha, Secretary Ministry of Power, Government of India.

This Agreement has facilitated the completion of Dhalkebar-Muzaffarpur 400 kV double circuit cross border line, its operation in radial mode followed by synchronous operation with a part of Nepalese grid. Nepal has not only imported upto 850 MW in aggregate from India through this transmission line and other existing cross border transmission lines but made access in the Indian Energy Exchange to export the surplus power. Despite multiple failures we have success and have already started reaping the benefits.   Efforts for larger benefits through regional connectivity and access to regional market are ongoing.

More private companies keen on selling power to India and Bangladesh

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Nepal Electricity Authority (NEA), the state-owned power utility body, sold electricity in India’s power exchange market for over a month from the beginning of November last year. It was the first time that Nepal sold electricity to the southern neighbour’s power exchange market through a competitive bidding.

The move opened up a new avenue for selling electricity to India, and even to Bangladesh, encouraging Nepal’s private sector companies to rush to obtain trading and export licences from the government.

“Two to three companies from the private sector have applied for trading and export licences so far,” said Madhu Bhetuwal, spokesperson for the Ministry of Energy. “The ministry is positive about granting approval to them.”

Officials and private sector power developers say the country needs to ensure power export to avoid electricity wastage during the rainy season.

The NEA, which is the sole power utility body in the country, said it suffered power wastage during the monsoon last year as there was surplus energy.

The demand for electricity was around 1,500MW while the country’s generation capacity was 2,000MW, of which 1,900MW was generated from hydropower projects after the 456MW Upper Tamakoshi Hydropower Project came into operation in August, according to NEA.

Kul Man Ghising, NEA managing director, told the Post in October last year that only 900MW-1,100MW was consumed during night at low demand hours. In daytime, 1,200MW-1,300MW was consumed when the demand was the least, leading to wastage.

The Indian government’s permission to the NEA to sell electricity generated from two projects—the 24MW Trishuli Hydropower Project and the 15MW Devighat Hydropower Project—in November helped the power utility control wastage. It had sold electricity to India’s power exchange market till the early days of December last year.

Now Nepal’s private sector wants to engage in power trading, particularly export electricity to India. They have started setting up power trading companies, and some of them have already sought approval from the Energy Ministry to sell electricity in the domestic and international markets. They have also been holding talks with Indian and Bangladeshi companies for partnership to sell electricity.

Nepal Power Exchange Limited, a Nepali private sector power trading company, and India’s Manikaran Power Limited, signed a memorandum of understanding (MoU) on energy trading on January 10.

According to the MoU, Manikaran Power Limited has pledged to acquire a 15 percent stake in Nepal Power Exchange Limited.

“Manikaran has also agreed to purchase 500 MW of electricity from Nepal Power Exchange Limited,” Ganesh Karki, vice-president of Independent Power Producers of Nepal (IPPAN), a grouping of private sector power developers, told the Post in early January. It is the company established by most members of IPPAN in 2019.

Nepal Power Exchange Limited is optimistic that the government will take a decision on granting it a trading licence.

Ashish Garg, managing director of Nepal Power Exchange Limited, said that the company expects to get a licence from the government in the next two months.

“The main objective of establishing this company three years ago was to encourage the government to open the energy industry to the private sector,” said Garg. “Initially, this company was not taken seriously just like the NEA’s own power trading company. After electricity spilled last monsoon, the government also appears to be serious about opening the door for the private sector to enter power trading so as to open up avenues to increase consumption of electricity at home and abroad.”

According to him, the company is making all out efforts to make export of electricity through the private sector possible. After offering 15 percent stake in the company to Manikaran, Nepal Power Exchange Limited also plans to rope in India Energy Exchange Limited, one of the power exchange markets in India, as a shareholder.

“We have also opened the door for India Energy Exchange Limited to buy an additional 15 percent stake in our company to facilitate bilateral energy trade between Nepal and India,” said Garg. “Once that happens, there will be a 30 percent stake of Indian entities in our company.”

Likewise, Nepal Infrastructure Bank, the country’s only bank dedicated to financing the infrastructure project, has also proposed to establish a power trading company as its subsidiary. The bank is now seeking the government’s approval to sell electricity in the domestic and international markets through the subsidiary company.

“It has been six-seven months since we applied seeking approval from the government for power trading,” said Ram Krishna Khatiwada, chief executive officer of the Nepal Infrastructure Bank. “We are also discussing with Indian and Bangladeshi companies for a partnership for power trading arrangements among Nepal, India and Bangladesh.”

He, however, said that the bank was yet to register a separate power trading company.

“We have only submitted an application for approval,” Khatiwada told the Post.

According to Shailendra Guragain, former president of IPPAN, around half a dozen power trading companies are already in the process of registration.

“This shows the rising interest of the private sector in the power trading business,” he added.

Power Trading Company Limited (Bidyut Byapar Company Ltd), a subsidiary of the NEA, received the government’s permission to carry out cross-border trading of electricity last December.

But the company has yet to start trading power with India as an independent entity, although its parent company NEA has long been trading electricity with its southern neighbour. It is the first company to receive power trading approval from the government, while the NEA has authority to involve in power trade as per section (20) of the Nepal Electricity Act-1984.

“The main reason behind our decision to enter power trading is that an avenue has opened for Nepal to sell electricity in India,” said Khatiwada. “Our belief is that exporting power will be easier provided we can bring entities from relevant countries on board.”

He said his company has been holding discussions with two-three companies from India and Bangladesh for potential partnerships.

While India has opened the door for Nepal to sell electricity in its power exchange market, Nepal and Bangladesh are also holding talks for the trading of power between the two countries.

Bangladesh has already decided to buy 500MW of electricity from the 900MW Upper Karnali Hydropower Project to be developed by India’s GMR Group which has set up GMR Upper Karnali Hydropower Limited to develop the project in Nepal. Bangladesh has also shown an interest in developing hydropower projects in Nepal, including the Sunkoshi III Hydropower Project, according to the Energy Ministry.

During the secretary-level Joint Steering Committee meeting between Nepal and Bangladesh in September last year, the two sides also agreed to develop a dedicated transmission line between the two countries by taking India on board.

Officials, private sector representatives and experts say that the possibility of exporting electricity to both India and Bangladesh has created a new opportunity for the Nepali private sector to invest in the areas of development of power and trading of electricity. They also said that Nepal could also reduce its growing trade deficit particularly with India, by exporting electricity.

Nepal faces a trade deficit with India worth Rs590 billion as of the first seven months of the current fiscal year, according to the Trade and Export Promotion Centre, an agency under the Commerce Ministry.

Govinda Nepal, a senior economist, said the availability of a larger market would help boost investment in Nepal’s power sector.

“Nepal also does not have to waste its excess electricity and export of power will also help reduce the trade deficit if not reverse it,” he said.

But those interested in power trading still have a long way to go. Officials said that the main reason behind the delay in giving approval is the lack of a clear provision in the existing electricity law about granting licences for trading.

“The Electricity Act-1992 does not have any provision about granting licences for the trading of power,” said Gokarna Raj Pantha, an official at the Electricity Regulatory Commission. “The law should first open the door for the private sector.”

A Bill on Amendment and Integration of Existing Electricity Laws has been pending at the National Assembly since mid-July 2020. As per Section 29 of the bill, private sector companies can also get a licence for electricity trade, and such licenced companies can engage in inter-country trade of power.

Officials at the Energy Ministry say they have been discussing working procedures that would provide trading and export licences to the private sector.

“The proposed working procedure has also made provisions regarding access to transmission lines, wheeling charges to be paid by the trading companies, conditions for termination of licence and penalty to be imposed for breaching licensing conditions and taxation,” said Bhetuwal, the spokesman for the Energy Ministry.

The ‘Procedure for Approval and Facilitating Import/Export (Cross Border) of -Electricity’ introduced by India’s Power Ministry in February last year, has made it mandatory for the exporter of power to first get an export licence from the authorities of the neighbouring country before selling electricity in the Indian power market.

Another problem for the newly established power trading companies and those willing to enter the market is that they don’t have power to sell and have not signed any power purchase agreement with any power developer.

Prabal Adhikari, chief of the Power Trading Company Limited, said that currently the company is ready to sell electricity from the projects that have signed PPA with the NEA.

“In the future, we will have to sign separate PPAs with power producers which will ensure power availability with us to sell it in the domestic and international markets,” said Adhikari.

Representatives of the private sector power trading companies say trading licences would at least pave the way for them to hold discussions with power producers in Nepal and power importers from India and Bangladesh.

“We can start discussions with power developers in Nepal who are struggling to sign PPA with the NEA for potential purchase of their electricity and with the buyers from India,” said Khatiwada.