June 30: Nepal Electricity Authority (NEA) has canceled the tender called to sell 200 MW of electricity to India as it could not get the price for the electricity as per the expectations. Six Indian companies involved in trading electricity had submitted proposals for the tender. However, the NEA stated that the tender was canceled as the proposed rates were not satisfactory.
NEA is currently selling electricity in the Indian open market at Rs 19.20 per unit (INR 12). However, the companies participating in the tender offered a maximum of Rs 7.77 per unit (INR 4.86), which is lower than the average selling rate of NEA. The average selling rate in Nepal is Rs 10 per unit. NEA canceled the tender after the Indian companies did not come up with a satisfactory proposals of purchase rate. NEA is getting good price of electricity due to the ongoing energy crisis in India. At the same time, NEA says, the proposals came from the Indian companies at very low rates.
Executive Director of NEA, Kulman Ghising confirmed that the tender called for the purpose of selling electricity in India has been canceled. “We did not get expected price from the Indian companies, so the tender had to be canceled. Now, electricity will be sold in the Indian open market,” said Ghising.
NEA had invited tenders in April to sell 200 MW of electricity to India for four and a half months of rainy season (July 1 to mid-November). Hydropower projects produce electricity in full capacity during the rainy season. They generate more than 2200 MW of electricity in the rainy season. However, the peak demand here is around 1600 MW. Accordingly, more than 600 MW of extra electricity is generated during this period.
NEA has been selling 364 MW of the surplus electricity at competitive rates in the Indian open market. India allowed NEA to sell 364 MW of electricity from six projects in Nepal in its market, which NEA has been selling in the Indian open market accordingly.
Besides, NEA failed to get permission to sell additional electricity in India despite seeking permission for it. There is no guarantee when the permission will be granted. In such a case, NEA tried to sell 200 MW through tender considering the increasing demand for electricity in India.
NEA said that the surplus electricity will probably be sold in the open market of India as well.
Despite getting permission for selling 364 MW of electricity, more than 400 MW is being sold in India during off hours. It also has a fair price. According to NEA, the tender was canceled due to the same reason.
Manikaran Power Limited of India, which participated in the tender bid, offered to buy 100 MW of electricity at the rates of Rs 7.77 (INR 4.85) and Rs 5.88 (INR 3.68). In addition, NTPC offered to buy 200 MW at Rs 6.88 (INR 4.3). Similarly, Arunachal Power Limited offered to buy 80 MW at Rs 6.73 (INR 4.21) and PTC Limited offered to buy 200 MW at Rs 6.62 (INR 4.14).
Tata Power Trading offered to buy 50 MW at Rs 5.47 (INR 3.42) and Create Power Pvt. Ltd. offered to buy 100 MW at Rs 6.25 (INR 3.91). Similarly, Repex Energy submitted a proposal to purchase 50 MW of electricity.
Earlier, NEA had been exporting electricity to India in the form of power exchange or energy banking. NEA invited tenders to export electricity to India commercially for the first time. However, this attempt failed. NEA has been selling electricity commercially in the Indian open market since last May.