Strengthening power connectivity through intensified transmission line initiatives has become NEA's strategic focus to enhance domestic consumption and facilitate electricity exports.
NewBiz Report
"The most significant bottleneck lies within the transmission lines," said Kulman Ghising, Managing Director of the Nepal Electricity Authority (NEA), during a program held in Kathmandu in the third week of February. "The situation necessitates the construction of transmission lines based on the licences issued for hydropower projects." Amid recent scrutiny for its inability to maintain a consistent power supply, particularly in industrial corridors, Ghising was providing the NEA's perspective on the matter.
However, with Nepal now positioned to generate and export surplus energy during the wet season, prioritising the enhancement of transmission line infrastructure has become paramount for the NEA. The construction of high-capacity transmission lines – domestic and cross-border – will be crucial to increase domestic consumption as well as to facilitate the expansion of electricity exports. Understandably, expediting the construction of transmission lines has become the primary focus for the state-owned power utility. Since announcing the end of load shedding in May 2018, the NEA has intensified its efforts in building transmission lines and substations, recognizing the critical importance of prioritising transmission infrastructure for electrification and ensuring a reliable power supply.
One of the ambitious transmission line projects the NEA has taken forward is the East-West Mid-Hills Transmission Line. The NEA has started a feasibility study to build a 400 kV capacity transmission line spanning the entire breadth of Nepal through the mid-hills region. The NEA intends to construct a transmission line stretching from Arun Hub in the east to Seti Corridor in the west, passing through Tingla, Khimti, Lapsiphedi and Damauli. NEA officials say efforts are underway to determine the route as well as for technical and feasibility studies.
Since the majority of hydropower projects are situated in hilly regions of the country, the NEA initiated a study on building a transmission line through the mid-hills to connect power generated from these areas to the national grid. According to the NEA, this project will also integrate with existing and future transmission lines and substations.
NEA has proposed to build a 400 KV transmission line stretching from Arun Hub through Tingla and Khimti to Lapsiphedi. Additionally, a 400 KV capacity transmission line is planned to be constructed from Lapsiphedi to West Damauli with the joint funding of the US Millennium Challenge Corporation (MCC) and the government. NEA plans to interconnect the Mid Hills Transmission Line with the power line to be constructed under the MCC funding. Moreover, toward the west from Damauli, NEA is exploring possibilities to extend the transmission line to the Seti Corridor via Rukum and Bafikot. According to NEA, the feasibility study for this project is in its final stages.
The utility has also commenced a study for the development of a 400 kV East-West Transmission Line along the Hulaki Rajmarga, or postal highway, in the plains of Tarai. Furthermore, NEA is undertaking a study to build another 400 kV transmission line stretching from Anarmani in the east to Nijgadh, and from Gandak to Dodhara in the west. Moreover, NEA has opted not to pursue the construction of additional transmission lines in the central region, specifically from Nijgadh to Gandak.
India’s Exim Bank has agreed to provide a concessional loan for the Lamahi-Dodhara segment of the transmission line planned along the Hulaki Rajmarga. India's Exim Bank has been supporting Nepal's road construction projects by offering concessional loans for such endeavours.
According to Ghising, the process of reallocating the budget from road construction to transmission line construction is currently in progress. He revealed that the Exim Bank is ready to finance $700 million for this project. Additionally, he highlighted ongoing discussions regarding potential investments by Exim Bank in various other transmission lines.
The construction of these transmission infrastructure is anticipated not only to improve domestic energy supply but also to provide more options for power trade with India as the postal highway connects with the Nepal-India border at multiple points.
The transmission bottleneck has long been acknowledged in the electricity sector. Hence, the US Millennium Challenge Corporation (MCC) has also consented to funding the construction of a 315-kilometre high-capacity transmission line. This project is crucial for transmitting power between the eastern and western regions bidirectionally. The MCA-Nepal, established as the special purpose vehicle to execute MCC-funded projects, however, has made limited progress in implementing the transmission line projects. In mid-March, MCA-Nepal issued a tender for the construction of a 18-kilometre Nepal section of the New Butwal-Gorakhpur Cross Border Transmission Line. However, the agency has yet to make a decision regarding the remaining portion of the 315-km power line after the cancellation of the previous tender due to high bid prices.
In addition to domestic transmission line projects, efforts are also underway to construct high-capacity cross-border transmission lines. Despite the existence of several cross-border power lines, the 400kV Dhalkebar-Muzaffarpur cross-border line stands out as the sole high-capacity connection between Nepal and India at present. It is capable of transmitting 1,000 MW of power.
With India pledging to procure up to 10,000 MW of hydropower from Nepal over a decade through a long-term power trade agreement, the demand for additional high-capacity transmission lines has become more apparent. The construction of four high-capacity cross-border transmission lines is currently underway to facilitate bilateral energy trade. Notably, the SJVN Arun-3 Power Development Company, which is building the Arun-3 Hydropower Project (900 MW), is building a 400kV Dhalkebar-Sitamarhi transmission line engineered to transmit up to 2,000 MW.
Similarly, the construction of the New Butwal-Gorakhpur Transmission Line, capable of supplying up to 3,500MW, has also begun. Additionally, Duhabi-Purnia and Dododhara-Bareilly cross-border transmission lines are in the pipeline. These, alongside other transmission projects, will be essential to meet domestic demands and facilitate power exports, especially as the government aims to generate over 28,000 MW of power by 2035. With plans to export 15,000 MW by 2035, the expansion of transmission infrastructure is very crucial for the country.
Domestic demands alone are projected to exceed 13,000 MW. The transmission lines and substation capacities in major cities across the country are anticipated to be insufficient to cope with the escalating energy demand, including peak demands, as per the NEA. Plans are underway to study and implement the Power Transmission System plan for major cities and associated industrial areas, aiming for future growth until 2050, through various clusters.
Citing the potential exponential growth in domestic demands and exports, high-capacity 400kV lines have been planned. According to the NEA, 400kV power lines have been planned to evacuate power from the Mahakali, West Seti, and Karnali corridors. These lines will evacuate power from Pancheshwar, Mugu Karnali, Phukot, West Seti, Betan and Dododhara substations.
A detailed study is underway for the Phukot-Dodhara stretch of the transmission line. Likewise, a 400kV transmission line has been planned from Pancheshwar to the New Attariya substation in Kailali. Another 400kV transmission line has been planned from West Seti to Dododhara substation in Kailali. Dododhara and New Attariya substation is a connection point in the 400kV East-West transmission line as well as an export point for cross-border connection to Bareilly of India. The common theme of these plans is to design a 400kV radial line along the river corridor to connect to the 400kV East-West highway along the Terai region for domestic load and exporting power to India through six export points, according to NEA.
According to the Transmission System Development Plan, the proposed network will require the construction of 3,192 km of 400kV transmission lines, 1,160 km of 220kV transmission lines, and 2,515 km of 132kV transmission lines, with an estimated cost of $3.76 billion. Likewise, the network consists of 40 substations with the highest voltage level of 400kV, 19 substations with the highest voltage level of 220kV, and 14 substations of 132kV. This is estimated to cost $2.26 billion, bringing the total estimated cost of the proposed network to $6.03 billion.
Challenges
Constructing transmission lines has emerged as the most significant challenge for NEA to realise its domestic supply and export targets. Implementing these power line projects has proven difficult due to challenges such as non-cooperation from forest and environmental authorities, local obstructions and funding constraints. Last June, Ghising expressed frustration towards the forest authority for non-cooperation to NEA projects. Speaking at a press meet, he revealed that an undersecretary at the Department of Forest had evaded signing an agreement crucial for clearing forests to facilitate a section of the New Butwal-Bardaghat Transmission Line Project.
The issue with the forest clearance process, as highlighted by NEA officials, is the considerable amount of time it takes to obtain clearance from forest authorities. For instance, tree counting is conducted during the Initial Environment Examination (IEE) process. "It takes one and a half years to obtain cabinet approval for forest clearance. However, by that time, the shrubs would have grown into trees, necessitating a fresh process that takes another one and a half years," explained Tara Pradhan, Deputy Managing Director at the NEA. He added that the NEA has proposed a law that would allow infrastructure projects to accommodate the increased number of trees after clearing all trees along the right-of-way.
Conversely, local obstructions demanding changes in the right-of-way and higher compensation have also persistently hindered the execution of transmission line projects. The construction of the 74 km-long Bharatpur-Bardaghat transmission line took 13 years to complete due to obstructions from local residents in certain areas. Similarly, the 400kV Hetauda-Dhalkebar-Inaruwa project encountered a similar fate. Addressing these legal challenges also contributed to the delay in project implementation.
NEA officials say that almost every transmission project has encountered obstruction, either from government agencies or local communities. Particularly, landowners affected by the right-of-way often oppose transmission line construction because they feel they are not adequately compensated for their land. Moreover, the value of such land diminishes as it cannot be mortgaged. "We can make efforts to increase compensation, but the challenge arises when locals insist on changing the right-of-way itself in many cases," stated Pradhan.
The major issue confronting the NEA is the funding crunch which has affected its transmission line expansion endeavours. For instance, the government has reduced the budget allocation for transmission line projects in the fiscal year 2023/2024. It has earmarked Rs 38.32 billion for the construction of both domestic and cross-border transmission infrastructure, a decrease from the Rs 43.95 billion allocated in the previous fiscal year. NEA officials say they are not getting enough resources from the government despite the need for a massive capital to fund expansion of transmission infrastructure.
Evacuation problem
Hydropower projects have been bearing the brunt of the NEA’s failure to construct transmission lines as per the schedule. Hydropower developers lament that the state-owned power body has been declining to purchase electricity from certain projects during the wet season, despite having signed power purchase agreements under the take-and-pay modality, citing the absence of a transmission line for power evacuation.
Specifically, projects along the Dordi corridor in Lamjung were unable to sell all its generated power during the wet season last year. Uttam Bhlon Lama, vice-president of the Independent Power Producers' Association of Nepal (IPPAN), said the NEA's decision not to purchase all the power from projects along the Dordi corridor led to losses of nearly Rs 1.6 billion for the power projects. "Stating that the transmission line from Anbu Khaireni to Bharatpur remains incomplete, the NEA refused to purchase all the power generated by projects along the Dordi corridor," said Bhlon. "We believe there was spare capacity in the power line that goes to Kathmandu and Pokhara from the Marshyangdi corridor. However, the NEA refrained from buying, presumably due to difficulties in selling the already available power."
In the past, numerous power projects have faced difficulties due to a lack of access to transmission lines. For instance, the Maikhola Hydropower Project encountered challenges evacuating its generated power because of the NEA's failure to complete the transmission line in the Kabeli corridor in eastern Nepal back in 2014. The Solu Hydroelectric Project in Solukhumbu district also encountered a similar issue in 2020 due to the absence of a transmission line.
In 2020, the annual report of the Auditor General's Office revealed that 95.61 gigawatt hours (GWh) of electricity produced by 18 private hydropower companies went to waste due to the government's inefficiency in improving, renovating and constructing transmission lines.
Five power Grid Zones
The power grid of Nepal is segmented into five zones, spanning from west to east, each with at least one interconnection point with neighbouring India and China. Zone 1, located in the far west, includes the Mahakali, West Seti, and Karnali corridors. The proposed interconnection points for power exchange with India are Dododhara and New Attariya substations, linking with Bareilly.
Likewise, Zone 2 comprises the Bheri Corridor and hosts significant generation sites such as Bheri-3 Storage (480 MW), Nalgad (410 MW) and Naumure Storage (342MW). The Phulbari substation serves as the export point to connect with the Lucknow substation in India. The Kali Gandaki and Marsyangdi corridors come under Zone 3. The proposed interconnection point for this zone is the New Butwal substation, connecting with Gorakhpur in India.
Similarly, Zone 4 includes the Trishuli-Chilime, Khimti, and Tamakoshi Corridor. This zone is set to have interconnection points at New Dhalkebar for power exchange with Muzaffarpur in India and the Chilime 400kV substation for exchange with Kerung in China. Lastly, Zone 5 in the far-east includes the Koshi, Arun and Kabeli corridors. Proposed interconnection points in this zone include the Inaruwa substation for exchange with Purnea in India and the Kimanthanka substation for exchange with Latse in China.
