KATHMANDU, FEBRUARY 10
The Nepal Electricity Authority (NEA) is going to purchase up to 1,500 megawatts of electricity from run-of-the-river (RoR) hydropower projects.
The 930th meeting of the NEA's Board of Directors held on Thursday under the chairmanship of the Deputy Prime Minister and Minister of Energy, Water Resources and Irrigation Rajendra Prasad Lingden has decided to conduct power purchase agreement (PPA ) ofup to 1,500 MW of RoR projects based on roll order of grid connection agreement dates.
The electricity of these projects will be purchased on the basis of the principle of 'take or pay'. Electricity of the projects will be purchased at Rs 8.40 and Rs 4.80 per unit for the dry season and wet season, respectively. According to the details of the NEA up to February 1, agreements for 3,192 megawatts have been signed with 136 projects.
Based on the roll order of the date of signing the connection agreement, all the provisions including electricity purchase and sale rates will remain the same. In April 2018, the Ministry of Energy decided the production of power projects based on the current situation and future road map (white paper) of the energy, water resources and irrigation sector in the long term with the aim of becoming self-sufficient in electricity through internal production in the next 10 years.
Of the targeted 15,000 megawatts, the power purchase agreements were planned on the basis of take-or-pay principle by keeping the ratio of reservoir and pump storage at 30 to 35 per cent, peaking RoR at 25 to 30 per cent, RoR at 30 to 35 per cent and other alternative sources.
The meeting of the Council of Ministers on July 8 reviewed the production mix ratio and reduced it by 10 per cent for reservoirs and increased it by 10 per cent for RoR projects. As per the revision, the ratio of reservoir projects will be maintained at 20 to 25 per cent, peaking RoR at 25 to 30 per cent, RoR at 40 to 45 per cent and other alternative sources at five to 10 per cent.
The ratio of 35 per cent (5,250 MW) was increased to 45 per cent, that is, 6,750 MW by adding 10 per cent to the limit ratio fixed for RoR projects.
This has opened the way to ink PPA with developers of RoR projects for 1,500 MW.
Kulman Ghising, managing director of NEA, said that according to the production mix decided following the Cabinet decision, based on the roll order of connection agreement, it has been decided to ink PPA until the limit of 6,750 MW is reached for the RoR projects.
Due to the possibility of a big financial risk to the authority in lack of assurance of the market for the sale of electricity during the rainy season, the PPA of RoR hydropower projects was halted for about three years ago.
NEA expects the developers to take five to seven years to complete the projects following the reopening of the PPA with RoR-type projects.
A version of this article appears in the print on February 11, 2023, of The Himalayan Times.
