KATHMANDU, Aug 11: In absence of a legal framework for cross-border electricity trade, independent power producers say their potential to produce and trade power has been limited.
Though the government provides a license to companies to produce power, they do not get a license to export. "There is no specific law for exporting electricity," said Kumar Pandey, vice-president of Independent Power Producers' Association Nepal (IPPAN).
With the country's progress in energy production, independent power producers are willing to export power to other countries with an authorized license.
"It is not that just by having an export license, we will be able to produce more energy. But the government has to make it clear from which border we can export if needed, and assign an authority from which we can take permit for export," said Pandey.
Presently, GMR, developer Upper Karnali Hydropower Limited and Satluj Jal Vidhyut Nigam Limited, developer of Arun III, have been given licenses to export energy as they are companies from India.
Last year, after his visit to Bangladesh, Energy Minister Barsha Man Pun had said that Bangladesh wanted to buy 9,000 MW electricity by 2040.
Nepal has also made an agreement with Bangladesh on energy collaboration. Nepal Electricity Authority has also asked the Indian government for energy banking.
Ministry of Energy, Water Resources, and Irrigation has formed a committee to work for export-import guidelines. Also, the government is going to revise the Electricity Act -1992.
"The committee will work on export-import guidelines. We are doing this to make an appropriate legal instrument," said Pravin Aryal, spokesperson, at the ministry. "Considering the promising situation of the energy sector in Nepal, a regulation for exporting energy is necessary now."
"The regulation will be related to criteria of export and import," added Aryal. "The companies dedicated to export with a PPA agreement can export power from Nepal in any situation. However, if companies are just interested in export or import for the financial benefit even during the energy crisis in the country, the issues will be addressed. All these cases will be incorporated into the regulation."
Aryal said that the committee is studying India's Guideline for Cross Border Trade of Electricity-2018, and is incorporating provisions from this on the guideline. He said that the guidelines should be according to internal needs.
The Indian government had revised the 'Guidelines on Cross Border Trade of Electricity-2016' in December 2018 after receiving inputs from various stakeholders. The guideline has been made to facilitate and promote cross border trade of electricity with neighboring countries with transparency, predictability, and consistency in the regulatory approach.