India's reluctance to renew permission to sell power, risk of industry and general load shedding from next week

Nepal has been buying electricity by competing in the day-ahead market of Indian Energy Exchange Limited (IX). According to which 'bidding' is done with price and quantity on the day before purchase. Nepal got permission to participate in this market in 2078 Baisakh. This five-year permit is subject to renewal every year. Renewed last year, the deadline is expiring on 18 Chait (March 31). But now even with only 6 days remaining, the Nepal Electricity Authority is also under pressure as it has not been renewed.

Despite sending a letter for renewal three months ago, India has not yet sent a reply, said Chandan Kumar Ghos, spokesperson of the authority. "Until now, we have not received the information about the renewal, we are still waiting," he told Kantipur, "If India does not renew, it will have to depend on domestically produced electricity, which will not be able to meet the domestic demand."

Nepal can import or export up to 650 megawatts of electricity through the Dhalkebar-Muzaffarpur inland transmission line. During the dry season, it imports a maximum of 450 MW of electricity from India, while during the rainy season, Nepal has been exporting electricity to India. According to the authority's official, the total demand will reach about 2,000 MW in the next two months, while the domestic production capacity will be only about 1,400 MW. When 600 MW was insufficient, the Authority had been balancing the demand by importing about 450 MW from India. But if India does not renew the electricity import permit, the electricity distribution system will be affected.

If India does not renew the contract, the authority has said that initially there will be power cuts in the industrial sector. "The priority of our service is the common people, so if the electricity import from India stops and there is a shortage, the industrial sector may be hit initially," said Ghos, the authority's spokesperson. According to the Authority, if domestic production does not increase, ordinary customers may also be at risk of load shedding.

Authority officials say that they are unaware of why the contract was not renewed this time. However, an official of the Ministry of Energy says that it is surprising that the contract has not been renewed now that there is an atmosphere of trust that the import-export of electricity will be facilitated. "India has said that no matter what government comes to Nepal, there will be no impact on the cooperation, but at this time it has not agreed to renew the electricity import agreement, we are not in a position to say clearly that this is the reason," said an official of the ministry.

According to an energy official, Prime Minister Pushpa Kamal Dahal has been informed to resolve the issue politically. "Energy Minister Shakti Basnet has requested Prime Minister Dahal to take a political initiative to solve the problem, but no concrete answer has been received," he said.

Although India has not given any official information about why the agreement to import electricity has not been renewed, energy officials have said that the election is the reason in an informal conversation. They say that there is a Lok Sabha election going on, the demand for electricity will increase during the election and because there are government directives to provide uninterrupted power supply to consumers during that period, it is difficult to export to Nepal, said an energy official.

India has suggested to buy electricity from gas plants instead of renewing the permission to bring electricity from the competitive market, officials say. The price of electricity produced from gas plant is about 10 bharu (16 rupees) per unit. While from 2078, Nepal is buying electricity from India's competitive market at an average of 3 baht per unit. According to the

authority, apart from India's competitive market, there is an agreement to import electricity under the Mahakali Treaty under the Tanakpur Transmission Line and the Nepal-India Electricity Exchange Agreement. According to Ghos, a spokesperson of the authority, a small amount of electricity will be imported from the Tanakpur transmission line under the Mahakali Treaty. According to him, only 70 million units of electricity are imported annually from Tanakpur transmission line.

There is also a separate agreement between Nepal and India on electricity exchange. However, according to this agreement, it is seen that electricity cannot be purchased immediately. The 14th meeting of the Nepal-India Power Exchange Committee (PEC) held in New Delhi in Chait 079 fixed the rate of import-export electricity for the year 2023 at 7.21 Bharu (11 rupees 54 paisa) per unit. Since the meeting of the committee has not yet been held and the price for the year 2024 has not been set, officials say that electricity cannot be imported immediately through this measure.

According to the electricity exchange agreement, the authority has been importing electricity from Bihar, Uttar Pradesh and Uttarakhand through 132 KV transmission line whenever required. "On the one hand, there will be a shortage of electricity in Bihar and Uttar Pradesh in April," spokesperson Ghos said, "on the other hand, the Power Exchange Committee has not fixed the price to bring electricity from there. Therefore, it is difficult to bring electricity according to this agreement. He says that Nepal will be comfortable only if India renews the agreement to export electricity to Nepal.