Nepal plans to buy 365MW power from India to meet winter demands

Kathmandu [Nepal], September 22 : Nepal's state-owned power utility body is planning to buy upto 365MW from Indian power traders to meet its domestic demand for power in winter when the production of Nepal's run-of-river hydropower projects dwindles, media reports said.
This move is the first of its kind as Nepal prepares to buy electricity on a long-term basis through competitive bidding from India, reported Kathmandu Post. It will help light up Nepali homes with Indian energy in winters.
Nepal Electricity Authority is seeking to get the power supply from India from December 1 this year to May 31 next year under a six-month contract.
The Nepal Electricity Authority plan delivery of 300MW from the Muzaffarpur substation through the Dhalkebar-Muzaffarpur cross-border transmission line and an additional 65MW through the Tanakpur substation. The electricity will be bought round-the-clock, the notice states, reported Kathmandu Post.
The situation as it stands currently is such that Nepal is apparently exporting electricity because of surplus production by the hydropower projects fed by monsoon-swollen rivers.
However, the condition reverses in the winter months when the country has to as the water levels in the rivers fall and the plants produce in the range of 30-40 percent of their installed capacity.
According to the Nepal Electricity Authority, the power projects currently have a total installed capacity of around 2,200MW. The peak electricity demand on Wednesday stood at 1866MW.
Speaking on the purchase of energy with the help of a competitive bidding process, Jayaraj Bhandari, chief of the economic analysis division of the Nepal Electricity Authority, said, "It is the first time that we are trying to buy electricity from India through a competitive bidding process for long-term power supply."
Bhandari further explained that the key reason for opting for a longer-term contract is to diversify the risk, Bhandari said and added, "When Nepal relied on the day-ahead market to import power from India in the last dry season, we could not import as much as we wanted."
Nepal has a power exchange mechanism with Bihar and Uttar Pradesh. Under this mechanism, the two countries can buy power from each other as needed. The price has been fixed at INR 6.18 per unit for taking power through the 132kV transmission line and INR 6.65 for buying electricity through the 33kV transmission line.
NEA officials say the country will have to buy electricity from India in the dry season a few more years although the country has been cutting down on the import of electricity along with rising production at home.
In the last four months, the Nepal Electricity Authority exported electricity worth over Rs7 billion from June to mid-September and its targets to sell electricity worth Rs16 billion in the current fiscal year, the media portal reported citing the country's electricity authority.