December 8: Hydropower projects with capacity to generate around 7,000 megawatts of electricity have been denied permission to sign power purchase agreement (PPA) after the government blocked them from signing PPA stating that the quota of run-of-the river (ROR) hydroelectricity projects has reached its limit.

The government has denied permission for ROR hydropower projects to sign PPA under the ‘take and pay’ scheme since the last one and a half years. As a result, a total of 170 private hydroelectricity projects with capacity to produce between 6000 to 7000 megawatts of electricity have not been able to sign PPA.

Although the government has stopped such projects from signing PPA under the pretext that the quota has reached its limit, it is still granting permission to new projects for conducting surveys.

According to the data kept by the Department of Electricity Development, a total of 26 projects were granted permission for survey to develop 1691 MW of electricity during the last fiscal year while 5 such projects have been granted permission to survey the possibility of generating 88 MW of electricity in the current fiscal year. But the government has not allowed any of the completed projects to sign PPA since the last one and a half years.

The state-owned Nepal Electricity Authority (NEA) has refused to sign PPAs under the ‘take and pay’ scheme with the private companies following instructions from the government.

The government has been giving permission for survey to the promoter companies without any hesitation. However, it has not signed any single deal with such projects to purchase electricity.

This has left the promoters of the under-construction project worried. One of the promoters said that the government has been giving them license for survey only with the intention of collecting revenue.

Chairman of API Power Company Guru Prasad Neupane informed that around 170 projects have not been able to sign the PPA.

“All of those projects have completed the required process. But they have not been able to strike the PPA,” said Neupane, adding that two of the projects developed by API Power Company has also not been able to sign PPA.

“It is not fair to give license to the projects but deny them the opportunity to sign PPA,” he added.

“The government must take appropriate decision.”

The government has set a target to develop 15,000 megawatts of electricity in 10  years. That includes 30 percent from ROR projects, as per the government’s concept. As per the government’s target, ROR projects can supply only up to 4500 megawatts of electricity.

But the NEA has already initiated the process to purchase 6000 MW of electricity from ROR projects. However, the NEA has stopped signing PPA under take and pay scheme after the production of the ROR projects crossed the limit, says Ramji Bhandari, an official of NEA.

Meanwhile, chairman of the Independent Power Producers Association of Nepal (IPPAN) Krishna Acharya says that the NEA is still not clear about the PPA issue.

“Energy minister and officials of NEA assure us that they will sign PPA with us. But the NEA does not implement it,” said Acharya.