Reduce cost to sell power to India: PTCI

Kathmandu, November 21:

Chairman and managing director of Power Trading Corporation of India (PTCI), Tantra Narayan Thakur, said today that power-hungry northern India would be ready to buy energy from Nepal provided that the latter is be able to sell electricity to India at a rate lower than what costs in India. Thakur, who played a significant role in making amendments in the India’s Electricity Act 2003, made this remark while addressing a talk programme organised by Independent Power Producers’ Association, Nepal. “Why does Nepal have higher cost of electricity generation than India and Bhutan?” he asked. He said if Nepal wanted to reap economic benefits from exporting energy to India she needs to reduce electricity cost, attract private sector to investment in hydroelectric projects, maximise public revenues and ensure energy security.

India is the third largest power industry in Asia whose current power production stands at about 1,15000 MW and still faces a deficit of about 75,000 MW. He also suggested that the governments of India and Nepal should not engage in determining prices of hydroelectricity sale and let the market, the producers and buyers decide the price of electricity sold to either side. Despite the fact that Nepal has potential of generating commercially-feasible 43,000 MW of energy, less than one per cent of its vast resources have been tapped so far and the power tariff in Nepal is one of the highest in the world. Thakur said due to close proximity, Nepal could sell environment-friendly energy to India during the monsoon season while India can sell the former during the dry season through power produced from thermal plants. Some exchange of power trade is taking place between the two countries across the border, but just between 30 and 40 MW.

“Since fuel market is being globalised, Nepal also needs to develop her competitiveness to reap benefits from her vast water resources,” Thakur said, pointing to the need of improving utilisation of existing resources. He said regional energy security would give an added value to a small countrys like Nepal and Bhutan, which are rich in hydropower potentials. Sandip Shah, president of IPPAN, said lack of political will, high cost of power generation in Nepal due to the location of power plants in remote areas, lack of financing and inefficient marketing

of power in India were some of the major barriers towards sustainable and speedy development of Nepal’s hydropower. Former chairman of IPPAN Prabhakar SJB Rana, who chaired the session, said Nepali mindset about the proper utilisation of Nepal’s water resources sector should be changed if she wished to benefit from her untapped resources.