Nepal Electricity Authority (NEA) is preparing to import an additional 50MW electricity from India via recently-built Kataiya-Kushwaha cross-border transmission line.

For the purpose, the authority will soon write a letter to India’s NTPC Vidyut Vyapar Nigam (NVVN) to initiate the process of signing power purchase agreement (PPA). “We will dispatch the letter to NVVN within a couple of days,” said Prabal Adhikari, chief of NEA’s Power Trading Department. “Upon receiving the letter, NVVN will invite a team from NEA to negotiate the power trade deal.”

Unlike the electricity imported via Dhalkebar-Muzaffarpur cross-border transmission line which NEA is directly buying from NVVN, the electricity coming through Kataiya-Kushwaha line will be purchased with Power Exchange Committee (PEC) of Bihar Electricity Regulatory Commission (BERC). 

Both these entities are run by India’s Bihar state and the cost of energy sold by these entities is higher than rate offered by NVVN.

“Currently, PEC charges IRs5.62 and BERC charges IRs5.55 per unit, whereas the cost of import from Dhalkebar-Muzaffarpur cross-border transmission line stands at IRs3.60 per unit,” said Adhikari. “NVVN will decide which of the two entities will be involved in power trading with Nepal via that line.”

NEA, however, will try to bring the rate down during the negotiation with NVVN. “We will request NVVN to lower the rate,” said Adhikari.

However, the import from this line will only be during peak hours, unlike round-the-clock import via Dhalkebar-Muzaffarpur. The additional electricity, according to NEA, we will used to supply to power hungry industries located along Morang-Sunsari industrial corridor.

Currently, NEA imports 130MW electricity from older Kataiya-Kushwaha transmission line. The new line was recently erected under complete financing of the Indian government to increase the quantum of cross-border electricity trade between the two countries.  

Hydropower generation in the country has plunged by almost 60 percent as the water level in most river basins has fallen due to the dry season and the NEA is relying heavily on the electricity imported from India to keep the Kathmandu Valley free from power cuts. 

To bridge the gap, Nepal is currently importing around 380MW of electricity from India through various cross-border transmission lines. The country’s peak electricity demand hovers at 1,240MW. The NEA has been managing the deficit of 385MW by cutting off power to energy intensive industries during peak hours.