October 2, 2023
KATHMANDU – India has finally allowed Nepal to sell the electricity generated by two hydropower projects in its real-time energy market starting Saturday midnight, Nepal Electricity Authority said.
On July 31, the southern neighbour had opened the door to Nepal, Bhutan and Bangladesh to participate in its real time energy market by amending the ‘Procedure for approval and facilitating import/export (cross border) of electricity by the designated authority’ issued in February 2021.
It is for the first time that the southern neighbour has granted projectwise approval ensuring that Nepal could now start selling power in India’s Real-Time Market (RTM). “Nepal is the first country to participate in the RTM from South Asia,” said Prabal Adhikari, power trade director at the Nepal Electricity Authority.
According to the NEA, the Central Electricity Authority of India has allowed trading of 44 MW of electricity generated by the 19.4 MW Lower Modi and 24.25 MW Kabeli B-1 hydropower projects in the real-time market in the first phase.
Adhikari said approval has been received for the sale of electricity from two projects in both the day-ahead and the real-time markets.
“Earlier, we had to wait for a day for import and export of electricity,” Adhikari said. “Now we will be able to trade by bidding just one hour and fifteen minutes ahead of the sale. The approval has opened the doors for buying and selling power in case of a sudden halt or an increase in electricity generation.”
According to Adhikari, the southern neighbour issued approval for these two projects in the process of renewing approval for the day-ahead market. “We expect that other projects, which have got approval for the day-ahead market, will also get a nod for selling power in RTM in the days to come,” Adhikari said. “We expect that the Indian government would grant permission to sell power from new projects in both day-ahead and real-time markets as soon as possible.”
The projects that have received approval for selling power in the day-ahead market need to get permission or be renewed every year. Nepal has been requesting the southern neighbour to remove the provision of renewing the approval every year to ensure guaranteed market access for a longer period.
Even though the NEA got approval to sell 44 MW of power from midnight on Saturday, it has plans to sell part of the approved quantum initially.
“Our plan is to sell 25MW hours from each of the two projects,” said Suresh Bhattarai, spokesperson at the NEA. “We also have to find the buyers.”
NEA officials say that entry into the RTM is important to manage demand and supply of electricity properly. “It helps the power system operators to balance supply of power when there is volatility of demands,” Adhikari said.
For instance, with access to the real-time market, Nepal can sell more than the earlier estimated quantum if the generation rises suddenly.
“The buyer, too, can reduce demand if it no longer feels the need to buy power. It is a win-win for both the buyer and the seller,” Bhattarai had earlier told the Post.
Since November 2021, the southern neighbour has been allowing Nepal to sell its power in its day-ahead market. Nepal has been allowed to sell 522 MW of electricity in the day-ahead market.
India has also started buying power from Nepal under a medium-term five-year power deal since early September. Nepal sells 110 MW of electricity to Haryana state through the NTPC Vidyut Vyapar Nigam Limited [NVVN], India’s nodal agency for bilateral electricity trade with its neighbours.
NEA said it sold electricity worth Rs5.43 billion during the first two months of the current fiscal year in the Indian market.