Power purchase accord extendedThe Nepal Electricity Authority (NEA) and India’s NTPC Vidyut Vyapar Nigam (NVVN) on Wednesday signed a three-month extension to the power purchase agreement (PPA) which is due to expire at the end of December.
The Nepal Electricity Authority (NEA) and India’s NTPC Vidyut Vyapar Nigam (NVVN) on Wednesday signed a three-month extension to the power purchase agreement (PPA) which is due to expire at the end of December.
The pact allows Nepal to import up to 160 MW of electricity over the Dhalkebar-Muzaffarpur cross-border transmission. NEA Managing Director Kulman Ghising and NVVN CEO Arun Kumar Garg signed the PPA on behalf of their respective organisations in New Delhi.
“We have renewed the PPA for three months under the previous rate and terms and conditions until the planned energy secretary-level joint steering committee meeting between the two countries is held,” said Prabal Adhikari, spokesperson for the NEA who accompanied Ghising to Delhi. As per the renewed agreement, Nepal will receive up to 160 MW of electricity at IRs3.60 per unit from January 1 to the end of March 2018 through the cross-border power line. The state-owned power utility has been importing 120 MW currently. This is expected to increase in the near future when demand for power grows.
The accord has ended confusion regarding the supply of electricity over the cross-border transmission line after the PPA expires at the end of the month.
The two countries had planned to renew the PPA during the joint steering committee meeting scheduled for the last week of December.
After Nepal cancelled the conference citing lack of preparation, doubts were raised if India would keep supplying power over the transmission line.
Although, the power purchase deal has been signed between the NEA and state-owned nodal agency NVVN to sell electricity to Nepal, the principal agreement will be concluded during the joint steering committee meeting.
After the meeting was called off, the NEA had written to NVVN seeking a three-month extension to the PPA under the original rate and terms and conditions.
Nepal started importing electricity over the Dhalkebar-Muzaffarpur transmission line in February 2016 after the then prime minister KP Sharma Oli and Indian Prime Minister Narendra Modi jointly inaugurated the cross-border power line.
Initially, Nepal was importing 80 MW of electricity. Imports doubled after electricity generation by domestic hydropower projects dropped sharply during the dry season due to reduced water levels in the rivers. The NEA was able to eliminate power cuts in the Kathmandu Valley and other major cities in the country largely due to the energy imports through the Dhalkebar-Muzaffarpur transmission line.
The NEA is currently importing around 400 MW of electricity from India through nine transmission lines. Most of the power comes through the Dhalkebar-Muzaffarpur, Kataiya-Kushhawa, Raxaul-Parwanipur, Tanakpur-Mahendranagar and Ramnagar-Gandak transmission lines.
The state-owned utility is planning to increase imports through these cross-border transmission lines because domestic production is expected to drop further as the dry season intensifies.