April 16: Nepal Electricity Authority (NEA) is now eligible to buy electricity from India’s energy exchange market. India’s Ministry for Energy has given approval to NEA to become a member of the exchange market on April 14, allowing the latter to buy electricity from the Indian market independently.

NEA had submitted an application to receive the membership of the Indian energy exchange market. Based on the same application, NEA has been authorized to purchase electricity from the exchange market.

Meanwhile, India has not given approval to NEA to sell electricity in its market. Madan Timsina, spokesperson of NEA, said the process to receive the permit to sell electricity is underway. For now, NEA has received approval only to buy electricity.

This approval lets NEA to import electricity from any Indian company. So far, NEA had been purchasing electricity from various companies by signing Power Purchase Agreement (PPA) with them. “No PPA is required to buy electricity from now on. NEA can import electricity from the companies trading in Indian energy market,” said Timsina, adding, “We can purchase electricity from the companies that sell it at cheaper price. In this case, if electricity is to be purchased tomorrow, purchase process needs to start today.”

However, NEA still needs to buy electricity from the National Thermal Power Corporation (NTPC) - the company authorized to trade electricity in India. India has designated NVVN, a model agency to export and import electricity to Nepal.  Accordingly, electricity will be imported and exported.

Timsina informed that the process has been initiated to get approval for selling energy in the Indian market. “In this regard, India has sought for additional documents which we have already provided. We will get the permit to sell electricity as soon as the required documentation process is complete,” he said.

India had presented guidelines for cross border import and export of electricity in the end of February. Based on these guidelines, electricity can be imported and exported between Nepal and India. NEA said documents requested by India have been submitted in accordance to the rules of this guideline.

Nepal will be generating surplus energy in the coming rainy season. If NEA receives the approval from India, the NEA can sell the surplus power in the Indian market.

The first unit of Upper Tamakoshi will also be generating 76 MW of electricity by mid-May. Other projects are also about to start operation and are expected to generate excess electricity.