Nepal becomes net electricity exporter for the first time in FY 2023/24

Published On: July 29, 2024 11:40 AM NPT By: Republica | @RepublicaNepal

NEA exported electricity of Rs 16.93 billion to India while import amount was Rs 16.81 billion last FY

KATHMANDU, July 29: Nepal has become a net electricity exporter for the first time with the earnings from electricity export exceeding the expense on the imported electricity from India in the last fiscal year.

According to the Nepal Electricity Authority (NEA), it exported electricity worth Rs 16.93 billion to India in the last fiscal year 2023/24. On the other hand, the power utility spent Rs 16.81 billion to import electricity from the southern neighbor. In this regard, the NEA gained a net profit of over Rs 120 million from the transaction.

Kulman Ghising, managing director of the NEA, said the contribution of the electricity produced by the private sector has led to a notable rise in the electricity exports. “It is a landmark achievement for a country which used to just import electricity until 6/7 years ago, and has now turned into the net exporter of electricity.” Ghising said.

Ending the powercut of up to 18 hours daily, the NEA officially declared the country free from loadshedding on May 13, 2018. It started exporting electricity to India three years ago.

For the first time, the NEA entered the Day-Ahead market of Indian Energy Exchange on May 1, 2021. At present, it has been selling 690 MW of electricity produced by 16 hydropower projects in the medium term, day-ahead and real time markets of India on a daily basis. Ghising said they are in the process of receiving India’s permit to export additional 400 MW under medium-term agreement.

Nepal has been exporting its surplus electricity to India in the peak production season starting from June through November. Likewise, the country imports electricity during six months of the dry season.

According to the NEA, it exported 1.9426 billion units of electricity to India in FY 2023/24. The sales rate was an average of Rs 8.72 per unit. On the other hand, the authority purchased 1.8335 billion units of electricity at an average Rs 9.17 per unit from India.

Ghising claimed that there was not much electricity wasted in the review period. “Except in case of some technical problems that took place in private hydropower plants which signed an agreement under ‘Take or Pay,’ there was not much electricity wasted during the period,” he said.

Nepal has signed an agreement with India to sell 10,000 MW of electricity in the next 10 years. “Although, there could be some shortfall in the winter season for the next few years, the volume of electricity exports will go on increasing,” said Ghising.

According to the NEA, Nepal once spent up to Rs 23 billion to import electricity from India. In FY 2022/23, the country’s expenditure on the heading came down to Rs 19.44 billion, while earning Rs 10.45 billion by exporting electricity to its southern neighbor.