Nepal Electricity Authority, the state owned power utility is gearing up to sign power purchase agreement (PPA) with 22 projects for generation of 61 MW of solar energy. Currently, the NEA board is reviewing the PPA template to be signed with various developers to install solar plants at 22 different locations. Once the board approves the PPA template, the power trading department of the NEA will sign PPA with the developers to purchase the solar electricity produced at their plants for 25 years. 

The NEA in a bid to diversify it energy mix had published a request for the proposal in June 2016, seeking bids from interested parties to install solar plants and supply electricity to the power utility at a base price of Rs 9.61 per unit. 

The NEA selected more than half a dozen companies bidding for the installation of such plants. “We have selected parties that have quoted prices ranging from Rs 8.45 to Rs 9.61 per unit of electricity at different locations,” said Prabal Adhikari, chief of power trading department of the NEA. “Since the template of PPA is ready and the developers have already quoted their price, the PPA will be signed immediately after the board approves it.” Upon signing PPA with NEA, the developer will install solar plant of installed capacity ranging from 0.5 MW to 8.5 MW at 22 different locations in the country. 

The largest solar power plant will be built at Butwal with an installed capacity of 8.5 MW whereas the smallest plant will be placed at Kawasoti with an installed capacity of 0.5 MW. 

The developers will have to complete installation of the power plant within 18 months after the signing of PPA with the power utility. “Although we have given a maximum time frame of 18 months to the developer to complete the installation and start supplying electricity, it will not take that long,” said Adhikari. “Majority of the projects will be commissioned as early as 10 months.” The electricity generated from the solar plants will be connected to the national grid via nearby substations of the NEA. According to the NEA, the developer will be responsible in evacuating the power to the nearest substation. 

The power utility came out with the plan to purchase electricity generated from solar plants, in a bid to diversify its energy portfolio. 

The NEA’s diversification plan is in line with the government’s policy to promote renewable energy other then hydroelectricity. The government has asked the power utility to promote other renewable energy sources like solar and wind to 10 percent of total installed capacity in the country.