Nepal | September 28, 2020

NEA to frame separate standard PPA templates for hydel projects

Pushpa Raj Acharya
Share Now:
Labourers work in Ghalemdi River Hydropower Project

Fiel – Labourers are seen working for the under-construction 5MW Ghalemdi River Hydropower Project in Narchyang-1 of Myagdi district, on Sunday, November 27, 2016. The Project is aimed to come into operation by next Dashain festival. Photo: RSS

Kathmandu, February 23
There will be less room for power play in grid connection agreements with the power off taker for hydropower developers as Nepal Electricity Authority (NEA) — country’s single power off taker — is going to frame three standard templates for the power purchase agreement (PPA).

Developers will not have room for negotiation on rates, minimum energy supply condition and other arbitration issues once the templates are finalised. Developers will just have to fill the project specific information in the grid connection agreement and this is expected to create a level playing field for all projects.

NEA is going to develop the standard template for PPA based on the capacity and source of investment of the projects. Reportedly, separate templates for projects of up to 100 megawatts and with investment in local currency, for those above 100  megawatts with investment in local currency and for projects of above 100 megawatts with investment in both foreign currency and local currency, will be developed in line with the recent instruction from the Ministry of Energy (MoE), according to Prabal Adhikari, chief of the Power Trade Department of NEA.

The MoE has asked NEA to implement the two guidelines developed by the panel of Joint Secretaries Dinesh Kumar Ghimire and Chiranjibi Chataut. The Ghimire-led panel has prepared guidelines for the PPA of foreign currency denominated projects and Chataut-led panel has prepared guidelines for separate PPA rates for storage and peaking run-of-the-river (PRoR) projects during wet season and dry season. The MoE had forwarded both guidelines to NEA for implementation through a minister-level decision some three weeks back.

Following MoE’s instruction, NEA board started discussions on both guidelines, as per NEA officials. New templates for the PPA will be designed once the board endorses the guidelines. It is reported that the board can endorse the guidelines as they are or with amendments.

Ghimire-led panel has recommended NEA to sign PPA in dollar terms for foreign investment projects depending on the foreign investment in the project.  NEA has said that for foreign investment projects it will design the template based on the PPA of 37.6MW Kabeli A project, which was awarded through global competitive bidding and its PPA was approved from Cabinet and was included as component of Project Development Agreement.

Likewise, Chataut-led panel has recommended the new rates for storage and PRoR projects. The panel has also stated that the dry season which was previously four-month long (from mid-December to mid-April) has to now be categorised for six months from December to May. Earlier, the developer had to provide at least 15 per cent of the rated capacity during dry season and now the MoE has asked NEA to revise it to 30 per cent as it has extended the period of dry season.

Though the MoE has written to NEA to implement the guidelines, however, the NEA board can defer the recommendation, or endorse them as they are or with  amendments. The NEA board will minutely scrutinise the pros and cons of revised rate from the commercial, technical and legal aspects before making any decision.

Chataut-led panel has recommended higher rates for storage projects as compared
to PRoR and RoR projects. According to the proposed rate, generator of reservoir project can sell per unit electricity at Rs 12.40 during dry season (from December to May) and at Rs 7.10 during wet season (from June to November). Likewise, Rs 10.55 and Rs 4.80 per unit electricity purchase rate has been proposed for PRoR-type projects during dry and wet seasons, respectively. As there is domination of RoR projects, which generate only one-third of their capacity during dry season, currently, NEA has been offering Rs 8.40 and Rs 4.80 per unit for dry season and wet season, respectively.


A version of this article appears in print on February 24, 2017 of The Himalayan Times.


Follow The Himalayan Times on Twitter and Facebook

Recommended Stories:

More from The Himalayan Times:

Yet another Covid-19 related fatality recorded in Banke

RANJHA: A 47-year-old person from Bankegaun of Nepalgunj Sub-Metropolitan City in Banke district has died of coronavirus this morning. With this latest fatality, COVID-19 casualty in the district has reached 13. The man died in course of treatment at Nepalgunj Teaching Hospital in Nepalgunj, i Read More...

Indian Premier League, IPL, Kolkata Knight Riders, Shubman Gill

Morgan lauds Gill for batting masterclass against Hyderabad

England limited-overs skipper Eoin Morgan hailed rising India batsman Shubman Gill after the young opener's unbeaten 70 helped Kolkata Knight Riders beat Sunrisers Hyderabad on Saturday for their first win of the Indian Premier League (IPL) season. Kolkata, beaten by defending champions Mumba Read More...

12-year-old Bajhang girl raped before murder: Post-mortem report

BAJHANG: District Hospital Bajhang has issued the post-mortem report of murdered minor in Bajhang, revealing that she was raped before being murdered. The Bajhang District Police Office (DPO) received the report from the hospital on Saturday. The 12-year-old girl was found dead in a temple on Read More...

Liverpool great Souness backs Thiago to shine in England

Liverpool's new midfielder Thiago Alcantara's vision and passing range is reminiscent of Brazilian great Zico's in his prime and the 29-year-old ticks all the boxes to be a big success in the Premier League, former midfielder Graeme Souness said. Thiago joined league champions Liverpool from Read More...

21 construction companies face action in Bagmati province

BAGMATI: The Road Division Office, Hetauda has proceeded to take action against 21 construction companies who have failed to complete agreed projects in time. The contracts awarded to those companies for the road projects based in Makawanpur, Bara and Parsa districts cancelled as per the Clause Read More...

1,573 new cases take Nepal’s coronavirus tally to 73,394 on Sunday

KATHMANDU: Nepal’s coronavirus tally moved to 73,394 as 1,573 new infections were reported in the last 24 hours. As many as 885 people that had earlier contracted Covid-19 tested negative for the infection as per the Ministry’s latest data. So far, 53,898 people have recovered from the diseas Read More...

Ten Covid-19 fatalities registered on Sunday, death toll advances to 477

KATHMANDU: Ten more individuals diagnosed with coronavirus infection have succumbed to the disease, the Ministry of Health and Population confirmed at its regular media briefing on Sunday. Of the deceased, one is a woman while the rest nine are men. Details of the deceased individuals 20- Read More...

Opinion: How Nepal can benefit from ‘Science diplomacy’. 

KATHMANDU, SEPTEMBER 27 Chan-Mo Park is a computer scientist as well as chancellor at Pyongyang University of Science and Technology (PUST) in the Democratic Republic of Korea. He is an American citizen with a PhD from the University of Maryland. Park is eager to introduce North Korean Scientists Read More...