March 25: Nepal Electricity Authority (NEA) has imported electricity from the India’s open market by bidding at the maximum rate. Indian companies had refused to provide electricity to Nepal during the last two days (Wednesday and Thursday) at the rate proposed by NEA. As a result, NEA failed to import electricity from India. After that, NEA proposed the maximum rate to import electricity.

Currently, the maximum rate per unit of electricity in the Indian market is IRs 20 (Rs 32 in Nepal). NEA had submitted a bid to purchase electricity at the same rate for Friday. NEA spokesperson Suresh Bhattarai said that NEA has started importing electricity from India from Thursday night after the bid was approved. However, NEA will have to pay IRs 34 or Rs 45 per unit after adding various service charges, according to Bhattarai.

"Currently, we are selling electricity at an average of Rs 10 per unit. Therefore, we are at a loss of up to Rs 25 per unit," he said, adding, "Overall, we are still in profit. There is a history of buying electricity from India for as less as Rs 1.90 per unit.”

According to NEA officials, there are indications that there will be problems in power supply to the industrial sector shortly. There is a shortage of electricity in the Indian market due to the rise in price of coal following the Russia-Ukraine war. In that case, there could be a power shortage in Nepal, says Bhattarai.

 “India generates electricity from coal. But currently, there is a shortage of coal in India, and the power generation has been automatically affected. That is likely to affect us as well,” he said.

At present, Pakistan has 16 hours of load shedding. Similarly, Sri Lanka has started facing 6-7 hours of power cuts. 

After one month, the snow melts, and the flow of water in the rivers and streams of Nepal starts increasing. In that case, the production of electricity will also increase. NEA officials say that the situation will ease at that time.

NEA should offer a bid on the previous day to purchase electricity from India. Separate bids should be offered every 15 minutes. Accordingly, NEA has to propose 96 bids for the next day. NEA proposed a bid accordingly for Friday. More than 90 percent of the bids were approved. It is said that electricity will be procured accordingly in the coming days as well.

Due to the dry season, even the hydropower projects in India are not running at full capacity. This is also the case in Nepal. Nepal's electricity is based on hydropower. In winter, when the water level in the river decreases, electricity generation is reduced, and electricity has to be imported from India. But during the monsoon, Nepal exports surplus electricity to India.