Kathmandu, Oct. 15: The Ministry of Energy, Water Resources and Irrigation has prioritised policy and legal reforms, expansion of electricity trade, transmission infrastructure development, improved irrigation services and better governance to make the energy sector a key driver of the country’s economic development.
Presenting the ministry’s major achievements during the first six months since the formation of the new government on Wednesday, Minister for Energy, Water Resources and Irrigation Biraj Bhakta Shrestha said that the policy arrangements required to allow the private sector to engage in electricity trading were in the final stage, with preparations underway to issue Letters of Intent (LoIs) to interested companies.
He said the government had adopted an integrated approach to electricity generation, transmission, market expansion and increased domestic consumption to strengthen the energy sector’s contribution to the national economy.
Minister Shrestha said that scientific and objective criteria had been developed to guide the Power Purchase Agreement (PPA) process in line with national priorities and the requirements of the electricity system.
He also said that despite damage to energy infrastructure caused by floods and other natural disasters, the ministry had prioritised the restoration of services and the provision of relief to people in affected areas.
Although the floods had severely affected the national transmission system, the efforts of Nepal Electricity Authority (NEA) employees and technical personnel has ensured that electricity supply across the country remains uninterrupted.
Policy reforms
As part of institutional and legal reforms in the energy sector, the Renewable Energy and Energy Efficiency Bill has been registered in the House of Representatives, while the Water Resources Bill has been submitted to the Cabinet.
Drafts of the Electricity Bill and the Irrigation Bill have also been prepared, and the process of obtaining feedback and suggestions from stakeholders is underway.
The Electricity Consumer Tariff Determination Directive, 2083, and the Transmission Charge Calculation Standards for the National Electricity Transmission Grid, 2083, have been issued. A directive on open access to the electricity transmission and distribution system has also been prepared.
Similarly, preparations have been initiated to amend the Electricity Regulations, 2050, to extend the licence period for reservoir-based hydropower projects to 50 years.
The ministry has also prepared the National Energy Efficiency Action Plan and is developing a roadmap to restructure the Nepal Electricity Authority (NEA) into separate companies responsible for generation, transmission, distribution and electricity trading.
In irrigation, the government has set targets to complete the Babai Irrigation Project and Bheri-Babai Diversion Multipurpose Project within the next two fiscal years, and other national pride projects within five years.
Expand power trade and hydropower development
The Ministry said that Nepal and India have agreed to increase electricity transmission capacity from 1,000 megawatts to 1,400 megawatts for imports and from 1,100 megawatts to 1,650 megawatts for exports.
Important decisions have also been made regarding transmission infrastructure projects, including Chameliya–Dhauliganga, Motihari–Nijgadh, Muzaffarpur–Dhalkebar and New Butwal–Gorakhpur, he said.
The process of establishing a joint venture company between the Nepal Electricity Authority (NEA) and India's Power Grid Corporation has been advanced to construct the 400 kV Inaruwa–New Purnea and Dododhara (New Lamki)–Bareilly transmission lines.
According to Minister Shrestha, the groundwork has been laid to make electricity trading more competitive, systematic and rules-based through open access to the transmission system.
The ministry has also prepared criteria for power purchase agreements (PPAs) based on a study report, with an emphasis on scientific, objective and nationally prioritised standards.
Preparations are under way to proceed with the PPA process in line with these criteria, and the ministry is working to take further decisions on the matter within a few days, he said.
Under the proposed criteria, priority will be given to hydropower projects capable of meeting peak electricity demand during the evening hours in the dry season. Projects will be assessed based on their total installed capacity and minimum average monthly generation.
Other assessment criteria will include the proportion of annual electricity generation produced during the dry season, the consistency of monthly output and the ability to meet the energy requirements of the national grid.
Meanwhile, the commercial operation date (RCOD) deadlines have been extended for 27 hydropower projects in the final stages of construction, with a combined capacity of 540.47 MW.
According to the Ministry, the generation licences have also been issued for the 828 MW Uttar Ganga reservoir-based hydropower project and the 1,063 MW Upper Arun project.
Land acquisition of approximately 590 ropanis has been completed for the 454 MW Kimathanka Arun Hydropower Project.
Similarly, government-level discussions and correspondence have advanced regarding cooperation
with India's National Hydroelectric Power Corporation (NHPC) for the 480 MW Phukot Karnali Hydropower Project.
Construction of the test tunnel for the 1,902 MW Mugu reservoir-based hydropower project is approximately 40 per cent complete, said the Ministry.
The ministry has also received a study report on the financial structure of the 417 MW Nalgad reservoir-based hydropower project, Minister Shrestha said.
Meanwhile, the ministry has accelerated the expansion and improvement of electricity transmission and distribution infrastructure across the country.
The construction of the long-delayed Hetauda–Dhalkebar–Inaruwa 400 kV transmission line had reached its final stage in the Hetauda section.
Construction of the 400 kV Bahrabise–Lapsiphedi transmission line has been completed, while the Bahrabise and New Khimti substations have been completed and brought into partial operation.
The Markichowk–Bharatpur 220 kV transmission line under the Marsyangdi Corridor has been brought into operation.
Similarly, the Dhalkebar–Balganga 132 kV transmission line has been completed and charged, while the Lalbandi–Salempur 132 kV transmission line and its associated substations have been commissioned.
Enhanced disaster preparedness
The government has extended the flood forecasting lead time for major rivers from three days to five days and increased the forecast period for flash floods in smaller rivers from 24 hours to 48 hours.
Impact-based weather forecasting services have been introduced in 15 local levels, while trials are under way in an additional 16 local levels.
The ministry has also started disseminating weather information through the ‘Nepal Weather Official’ mobile application to improve public access to weather forecasts and warnings.
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