Nepal Secures Export of Over 1,000 MW of Electricity to India, Aiming for 10,000 MW in the Next Decade

Nepal has set an ambitious target to export 10,000 megawatts (MW) of electricity to India over the next decade. This goal follows the recent approval for Nepal to export 251 MW of electricity to the Indian states of Bihar and Haryana, as per a bilateral agreement between the two countries.

The Indian Embassy in Nepal confirmed that Nepal has received additional export permissions, bringing the total approved capacity to 941 MW from 28 hydropower projects. With a provision to export up to 10 percent more to account for electricity leakage, Nepal’s electricity exports have now surpassed 1,000 MW. The Nepal Electricity Authority (NEA) is optimistic that this figure will increase by another 200 MW if ongoing efforts are successful.

The Central Electricity Authority under India’s Ministry of Power has granted NEA approval to export an additional 125.89 MW to Haryana and 125 MW to Bihar under an interim agreement. This new approval adds to the 109 MW already being exported to Haryana and marks the first time electricity is being exported to Bihar.

This brings the total electricity sold to Indian state-level distribution companies under the mid-term agreement to 360 MW. The remaining electricity is sold at competitive rates in the day-ahead and real-time markets of the Indian Energy Exchange (IEX). Under the mid-term agreement, exports occur from June to October, with electricity trading available year-round on IEX depending on availability.

NEA Executive Director Kulman Ghising announced that with the latest approval, electricity exports to Bihar and Haryana would commence immediately. “We will immediately supply this electricity to Bihar and Haryana,” Ghising stated. “According to the agreement, we can export 10 percent more electricity than the agreed amount, so now we are exporting more than 1,000 megawatts.”

Ghising also mentioned that an additional 200 MW of export approval is in process. The NEA aims to generate revenue of 25 billion rupees from electricity exports in the current fiscal year 2081/82.

Since starting electricity exports just three years ago, in October 2021, Nepal has successfully exported more electricity than it imported in the last financial year. Last year, Nepal exported electricity worth 17.6 billion rupees, surpassing its electricity imports by 130 million rupees.

Under the mid-term agreement, the selling rate for electricity is set at 8.72 rupees (5.45 INR) per unit. Last year’s approved rate for the 109 MW sold to Haryana was 8.40 rupees (5.25 INR) per unit. The NEA is responsible for transmission line fees, leakage, trading margins, and other associated costs on the Indian side. The authority exports surplus electricity generated during the rainy season after meeting domestic consumption needs.

Out of the 12 projects that recently received approval, 125 MW will be supplied to Bihar, and 125.89 MW from two projects will be supplied to Haryana. The NEA will provide electricity from transmission lines at Kataiya, Raxaul, and Ramnagar, which connect to Bihar.

The projects include the 11.64 MW Dordi, 114.453 MW Mayakhola, 9.991 MW Down Piluwa, 10.67 MW Lower Khare, 11.64 MW Upper Khimti, 6.8 MW Upper Khimti-2, 14.4 MW Modi, 14.6 MW Gandak, 19.21 MW Upper Solu, and 11.64 MW Dudhkunda Hydropower Project. Additionally, 125.89 MW generated from the 75 MW Likhu-1 and 50.89 MW Likhu-2 projects will be sold in Haryana.