Nepal Infrastructure 
KATHMANDU: Nepal should give priority to selling electricity in the long-term market rather than depending entirely on the short-term one, concludes a report.
Currently, Nepal has secured an international market in India – the Indian Energy Exchange to sell 365 MW of electricity for a short period of time. The report concludes that the short-term market is not safe and reliable to increase this volume in the future.
The study entitled ‘Nepal Specific Model of Cross-Border Electricity Trade’ prepared by the Nepal Energy Foundation, also suggests measures to be taken to boost energy trading in both local and international markets, especially between two neighbors.
“Especially the focus is on what the international electricity trade model can be,” said Sher Singh Bhat, Vice President of the foundation and head of the study team.
The report further mentions that Nepal’s system of selling electricity in the current short-term day-ahead market is not appropriate. Day-ahead market means the system of buying electricity that will be used tomorrow or buying it a day before. “Although this model is suitable for a short period of time.
However, this modality of trading is not suitable for selling large quantities of electricity in the long term,” he said.
As electricity production increases in the country, the electricity left over from internal consumption has to be sold. In such a situation, instead of a few hundred MW, thousands of MW will have to be exported. “For this too, a long-term electricity sales agreement should be signed with India,” he said.
Bhat also emphasized that even if the necessary policy arrangements are changed, there should be an arrangement that allows Nepalese power producers to sell directly to Indian companies. “This process should start soon,” he said.
Long-term market to accelerate power generation
There is no possibility for international electricity trade with any other country other than India in the immediate future. However, the possibility of power trade with Bangladesh and other countries is high in the future. In such a situation, the report emphasized long-term acceptance and agreement to assure the promoters that power generated in Nepal would not face any market problems for a longer period.
For this, it would be appropriate to enter into a long-term agreement not only with the central government of India but also with the state government. In addition, it will be easy for the Nepal Electricity Authority to enter into a Power Purchase Agreement (PPA) or for the promoter to speed up the project. In addition to this, Nepal can also increase international electricity trade by signing regional or sub-regional multilateral electricity trade agreements. “For this, it is necessary to start a new initiative,” the report adds.
‘Model’ to be adopted for domestic electricity trade
An interaction was held last week in Kathmandu among the experts on what kind of ‘model’ should be adopted by Nepal for the domestic electricity trade. The two-day event was organized by USAID’s South Asian Regional Initiative for Energy Integration, Integrated Research and Action for Development, and Nepal Energy Foundation. Various aspects of the international electricity trade are being
discussed in the discussion. In the opening session on Thursday, a member of the National Planning Commission Prof. Dr. Surendra Labh Karn emphasized the need to boost internal consumption of electricity along with the efforts to promote the sale of surplus power to international markets.
Shusilchand Tiwari, Secretary of the Ministry of Energy, Water Resources and Irrigation, said that there is a great need for investment in the hydropower sector.
“The government has given importance to the issue of increasing consumption within the country and then exporting only the excess electricity,” he said.
Dinesh Ghimire, secretary of the Secretariat of the Water and Energy Commission, said the electricity trade requires cooperation and coordination not only between governments but also between governments and the private sector, adding that unless investment is made in infrastructure construction, the energy sector will soon face problems.
USAID Nepal’s Deputy Mission Director Beth Hogan emphasized the need to promote the electricity trade with India for big economic development through hydropower development in Nepal. Hogan expressed commitment that the US will continue to support the long-term and institutional development of the energy sector of Nepal Bhupendra Bahadur Singh, Director of the Confederation of Indian Industry, Energy Security, underscored the need for a unified transmission line for South Asia.
“It will help this region and now we should think about BBIN (Bangladesh, Bhutan, India, Nepal)” he said. Pankaj Batra, project director of SARI said that coordination and cooperation between the countries belonging to the sub-regional BBIN of SAARC will be of great importance. Chairman of Nepal Energy Foundation Mohandas Manandhar said that there have been many changes in the field of the electricity business over two decades.
