KATHMANDU, MARCH 24
The state-owned Nepal Electricity Authority, in a bid to ensure uninterrupted power supply to the industries, is set to purchase electricity from India at the rate of up to eye-popping Rs 38 per unit, tax inclusive.
![The issuance of [ICRANP-IR] AA rating will enable the Nepal Electricity Authority to borrow directly on its institutional guarantee, according to NEA’s Executive Director Kulman Ghising. File Photo: THT](https://cdn4.premiumread.com/?url=https://thehimalayantimes.com/thehimalayantimes/uploads/images/2022/02/28/12919.jpg&w=200&q=100&f=jpg)
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NEA is compelled to purchase power at a higher price to ease the current power crisis owing to the surge in power prices at the Indian Energy Exchange Ltd (IEX), explained Suresh Bhattrai, spokesperson for the NEA.
Speaking at a press meet today on the current power crisis, Bhattrai said that NEA failed to supply the power as per demand of the industries as other buyers were bidding higher rates than NEA at the IEX.
"With the bid price of INR eight per unit three days ago at the IEX, we received only 10 blocks out of a total 96 blocks.
Hence, we raised the bid to INR 12 per unit, but got only 12 blocks," said Bhattrai. "Therefore, we set the bid at the highest rate of INR 20 per unit from 12:00am. And at least 7,000 megawatt hours (Mwh) of electricity will be imported to Nepal from tonight, thereby easing power supply to every industry," added Bhattrai Earlier, Nepal had been purchasing power from the IEX at INR eight per unit on an average.
The power plants in India have failed to generate sufficient electricity as the escalating Russia-Ukraine tension resulted in the prices of petroleum products and coal to soar.
According to the NEA, of the 31,000 MW, Nepal has been importing 12,000 Mwh from India daily to fulfil the domestic demand.
Of that quantum, NEA has been importing around 450 Mwh by bidding on IEX on a daily basis. Likewise, NEA had been purchasing electricity from India on a need basis from Bihar, Uttar Pradesh and Uttarakhand at fixed price under the 'purchase and pay' mechanism.
Nepal had signed a one-year agreement with NTP Power Trading Corporation Ltd and PTC India to purchase electricity at the fixed price. However, India halted exporting electricity at the fixed rate before the end of agreement due to a surge in power prices following the Russia-Ukraine war.
"As India stopped providing power at fixed price, we've been purchasing via IEX on a daily basis," informed Bhattrai.
Executive Director of NEA Kulman Ghising said that the authority will not pass on the additional cost to the industries even though the electricity is now being imported at a much higher rate. According to Ghising, it would, however, be difficult for the NEA to keep purchasing electricity at a higher price for an extended period of time.
"We are buying electricity from India at an additional cost of Rs 200 to 220 million on a daily basis. If we have to buy electricity at this rate for 35 days, we would have to pay Rs eight billion more, which would make it difficult to sustain."
A version of this article appears in the print on March 25, 2022, of The Himalayan Times.
