Nepal earned over Rs11 billion by selling excess power to India from early June to this week, the Nepal Electricity Authority (NEA) said on Monday. The high income suggests electricity has emerged as a major export item.

In early November last year, India had for the first time allowed Nepal to sell electricity in the Indian market via a competitive bidding process. But after exporting for a few weeks, Nepal stopped selling power to India in December amid a reduction in power generation in the dry season, The Kathmandu Post reported.

Exports resumed this year with the start of the monsoon in early June.

Initially, India had permitted Nepal to sell 39 MW generated by the 15MW Trishuli and 24MW Trishuli hydropower projects.

However, Nepal was allowed to sell up to 364 MW produced by six hydroelectric projects—140MW from the Kaligandaki Hydropower Project, 68 MW from the Middle Marsyangdi, 67 MW from the Marsyangdi and 51MW from Likhu-4 developed by the private sector, besides 37.7 MW from Trishuli and Devighat hydropower projects— beginning early June this year.

In November this year, India allowed the export of additional power from the 22.1MW Chilime Hydropower Project and 23.5MW. “Nepal has got approval to export 408MW from eight projects,” the NEA said in a statement.

The power utility body said it sold 1.35 billion units of electricity to India since resuming transfer in June. Earnings for the period stood at Rs 11.16 billion as power was sold at the rate between Rs 6.58 and Rs 12.15 a unit.

It earned Rs 2.83 billion from exports from July to the end of the last fiscal year 2021-22 and an additional Rs 8.32 billion since the start of the new fiscal year 2022-23, according to the utility body. It aims to earn Rs 16 billion within the current fiscal after resuming exports in May next year.

"Obviously, electricity has emerged as a big export product,” said Mohan Kumar Dangi, vice president of the Independent Power Producers Association of Nepal (IPPAN). “With more power projects set to be connected to the national grid, it has been necessary to explore the domestic and external markets.”

Nepal and India announced the Joint Vision Statement on Power Sector Cooperation in early April during Nepal PM Sher Bahadur Deuba’s visit to India.

The joint statement talked about strengthening cooperation on joint development of power projects in Nepal, and the development of cross-border transmission infrastructure and bi-directional power trade with appropriate access to electricity markets in both countries.

The two countries have moved ahead to build the New Butwal-Gorakhpur Cross-Border Transmission Line, which will enable the trade of more energy.

Presently, it is to be noted that the NEA has stopped exporting to India amid a fall in output owing to reduced water levels in the snow-fed rivers where hydropower plants are based. Instead, the NEA has started importing power from India as domestic production is not enough to sustain high winter-time demands.

Nepal imported 4,477MW of electricity from India on Monday.

Kul Man Ghising, managing director of the NEA, said that the country might have to import power for four months. “But unlike in the past years, imports this year will be lower than exports,” said Ghising. “We will be a net exporter of power in terms of both volume of energy and earnings.”

Image courtesy: The Kathmandu Post