Anil Rajbhandary, NEA

Capacity Building Program for SARPEX Mock Exercise

07 February, 2017; New Delhi

Power Sector Overview

Nepal

Legislative and Regulatory Framework

Key Acts and Regulations that govern Nepal’s Power

Sector:

Nepal Electricity Authority Act, 1984

Electricity Act, 1992

Electricity Regulations, 1993

Electricity Tariff Fixation Commission Regulation,1993

Ministry of Energy

Institutional Arrangement

Water and Energy Commission

Electricity Tariff Fixation Commission

Nepal Electricity Authority

Role of Private Sector

Department of Electricity Development

Ministry of Energy

Line Ministry of the Power Sector

Responsible for framing legislation for submission to

Cabinet and Parliament

Regulatory oversight for issuing licenses for power

generation, transmission and distribution under the

Electricity Act 1992

Department for Electricity Development

Department under the Ministry of Energy as the

official one-stop window for interested private

investors to facilitate the development of private

sector power generation, transmission and

distribution projects.

Functions:Private Power Development Promotion and Facilitation

Inspectorate

Technical Support

Water and Energy Commission

Policy Advisory Body to the Government

Formulates Short and Long Term Water and Energy

Development Policies

Analyses and advises on bi-lateral and multi-lateral

energy development programs as well as hydropower

development treaties with neighboring countries

E Electricity Tariff Fixation Commission

Reviews and approves retail electricity tariff rates

and other fees for electrical service at the

consumer level.

Comprises a full time Chairman, and members

representing the line ministry, private sector,

regulated entities, industry and the consumers.

Nepal Electricity Authority

Established in August 1985 under NEA Act 1984

Wholly Government of Nepal undertaking

Responsible for generation, transmission and

distribution of electricity throughout Nepal

Roles of NEA

Project Execution

Power Purchaser

Operation & Maintenance of National Grid

Scheduling and Dispatching

Engineering Directorate, DMD L-12 T

Project Development Department,L- 11 T

Environment & Social Study Department,L- 11 T

Soil Rock and Concrete Laboratory, L- 11 T

NEA Training Centre,L- 11 Adm.

Transmision

Directorate,

Grid Operation Department,L-11 T

System OperationDepartment,

L-11 T

Grid Development Department, L-11 T

Administration Division,L-10 Adm

Finance Division,L-10 Acc

Monitoring & MIS Section, L-9, Electrical

Administration Division,L-10 Adm

Finance Division,L-10 Acc

Monitoring & MIS Section, L-9, Electrical

Administration Division,L-10 Adm

Monitoring & MIS Section, L-9, Electrical

Material Management Div,L-10 Electrical

NEA Board

Managing Director

MD'S Secretariat,

L- 11 T

Audit Committee

Internal Audit Department

L-11 Acc.NEA Subsidiary

Companies

Planning & Technical

Services Department,

L-11 T

Finance Division,

L-10 Acc.

Community & RE

Department

L-11 T

Loss Reduction Division L-10 Electrical

Distribution & Consumer Services

Directorate,DMD L-12 T

Kathmandu Regional

Office, L-11 T

Hetauda Regional Office,

L-11 T

Biratnagar Regional Office,

L-11 T

Janakpur Regional Office,

L-11 T

Butwal Regional Office,

L-11 T

Pokhara Regional Office,

L-11 T

Nepalgunj Regional Office,

L-11 T

Attaria Regional Office,

L-11 T

Generation

Directorate, DMD L-12 T

Large Generation Operation

& Maintenance Department,

L-11 T

Medium Generation Operation

& Maintenance Department,

L-11 T

Generation Development

Department,

L-11 T

Planning, Monitoring & IT

Directorate,

DMD L-12 T

Organizational Structure of Nepal Electricity Authority

Technical Support Department, L-11 T

Corporate Planning & Monitoring Department,L-11 T

System Planning Department, L-11 T

Power Trade Department,

L-11 T

Information TechnologyDepartment,

L-11 T

Economic AnalysisDepartment, L-11 Adm/Misc.

Electromechanical Design Division,L- 10 Electrical

Administration Section,L-9 Adm

Finance Section,L-9 Acc

Project Mgmt.

Directorate,DMD L-12 T

AccountsDepartment, L-11 Acc.

Corporate Finance Department,L-11 Acc.

Finance

Directorate,DMD L

Project Preparation Department,L-11 Adm.

Note :

T = Technical Services; A = Administration Services: Adm = Administration Group:Acc=Account Group

Administration

Directorate,DMD L-12 A

Human Resource Department,L-11 Adm.

Legal Department,L-11 Adm

General Service Department,L-11 Adm.

Recruitment Department,L-11 Adm

Role of Private Sector

Availability of concessional loans for the power

sector, particularly in generation projects, is lately on

the decline.

Electricity Act 1992, provides a legal framework for

the private sector participation in electricity

generation, transmission and distribution.

Today, IPPs share is nearly 45 percent of the total

installed generating capacity.

Installed Capacity: 960.6 MW

On Grid 956.1 MW Off Grid 4.5 MW

Hydro 902.7 MW Thermal 53.4 MW

ROR 810.7 MW Storage 92 MW

IPP 429.7 NEA 381

1700 Micro HP, 15 MW

Import from India 350 MW

Nepal Power System

NEA Power System Status

NEA Power System Status

On Grid Installed Capacity 956.1 MW

Transmission Line 132 kV 2,417 Circuit Km

Substation 132 kV : 29 1,765 MVA

Transmission line 66 kV 511 Circuit Km

Substation 66 kV : 12 458 MVA

Number of consumers 2.97 Million

Population Coverage 58 %

Total Energy Available and Peak Demand

Particulars FY 2011/12 2012/13 2013/14 2014/15 2015/16*

Sales (GWh) 3,044.7 3,156.0 3,496.3 3,743.7 3,746.0

Peak Demand (MW) 1,026.65 1,094.62 1,200.98 1,291.10 1,385.30

NEA Hydro Generation 2,357.43 2,273.11 2,288.23 2,365.64 2,168.49

NEA Thermal Generation 1.56 18.85 9.65 1.24 0.07

NEA Generation Total

(GWh)2,358.99 2,291.96 2,297.88 2,366.88 2,168.56

Power Purchase from India 746.07 790.14 1,318.75 1,369.89 1,758.41

Power Purchase from IPPs 1,073.57 1,175.98 1,070.46 1,268.93 1,173.14

Power Purchase Total

(GWh)1,819.64 1,966.12 2,389.21 2,638.82 2,931.55

Available Energy (GWh) 4,178.63 4,258.08 4,687.09 5,005.70 5,100.11

500

600

700

800

900

1000

1100

1200

1300

0 3 6 9 12 15 18 21 24

Nep

al S

up

ply

/Dem

and

(MW

)

Time Hr

System Load Curve of Peak Load Day(October 30, 2016) Sunday

Supply Demand

Breakdown of Supply Option in Meeting the System Peak

Supply OptionContribution

(MW)

NEA – Hydro 430.1

IPP - Hydro 241.0

Import 230.1

Total 901.2

Peak System Demand 1291.2

Deficit 390

NEA HYDRO

2,168.5 GWh 29.6%

NEA THERMAL

0.1 GWh 0.0%

IPP

1,173.1 GWh 16.0%

IMPORT

1,758.4 GWh 24.0%

ENERGY SHEDDED

2,228.8 GWh 30.4%

Percentage Energy Share of Different Supply Options

Fiscal Year - 2015/2016

(Total : 7,328.9 GWh)

Electricity DemandPeak Electricity Demand of Nepal is nearly 1300 MW

Prolonged Load Shedding throughout the year was

enforced to cope with Supply – Demand Imbalance since

last couple of years

This year supply situation is comparatively improved

Increased import

Commissioning of number of IPP Projects

Demand Side Management

Being a Developing Country and with more than a third of

the population still without access to electricity, electricity

demand is projected to grow on an average by 8.2 percent

annually based on target GDP growth rate of 6 percent

7,491.08

9,889.91

14,349.25

20,811.80

28,329.85

1559.7

2071.5

2978.3

4280.7

5785.3

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30,000.00

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Pe

ak L

oad

(MW

)

Ene

rgy

(GW

h)

Fiscal Year

Load Forecast

Energy (GWh) System Peak Load(MW)

Projects Under Construction

ProjectsInstalled Capacity

(MW)

Commissioning

Year

NEA

Chameliya 30 2017/18

Kulekhani III 14 2017/18

Trisuli 3 ‘A’ 60 2019/20

Rahughat 40 2020/21

Total 144

Projects Under Construction…

ProjectsInstalled Capacity

(MW)

Commissioning

Year

NEA Subsidiary

Upper Tamakosi 456 2018/19

Tanahu 140 2022/23

Upper Sanjen 14.8 2018/19

Sanjen 42.5 2019/20

Madhya Bhotekosi 102 2020/21

Rasuwagadhi 111 2020/21

Total 866.3

Total (NEA + Sub.) 1010.3

IPPs (83 Projects) 890.0 2017/18-2020/21

Grand Total 1900.3

Supply Demand Scenario

In the next two years, with the commissioning of

number of Hydro Projects

Power Deficit Likely to be eliminated during

the wet season

But likely to persist in the dry season

By 2019 -20

Likely to become surplus in energy terms

Need for Import to meet Peak Demand

during Dry Season

Seasonality of hydro power generation

Comparatively higher load

Power Exchange between Nepal & India

Started with the signing of Koshi River Treaty in 1954.

Nepal’s entitlement 10 MW

Power Exchange Agreement concluded in 1971 for a 5 MW

power exchange

at present it stands at 50 MW level.

Other River Treaties:

Gandak Treaty: 15 MW Gandak Power Station Built

Mahakali Treaty: 12 – 16 MW (70 GWh per annum)

being drawn from the Tanakpur Power Station

Import beyond the 50 MW level under commercial terms

Import of power by India from Nepal is lately on decline

Extension of Indian Grid to rural areas adjoining Nepal Border

Existing Import Interconnections

InterconnectionsVoltage Level

(kV)

Import Capacity

(MW)

Kataiya - Kusaha 132 125

Kataiya - Rajbiraj 33 10

Sitamadi-Jaleshwor 33 12

Kataiya-Inaruwa 33 5

Raxaul-Birgunj 33 12

Ramnagar-Gandak 132 25

Jaynagar-Siraha 33 7

Nanpara-Nepalgunj 33 12

Tanakpur-Mahendranagar 132 40

Muzaffarpur-Dhalkebar 132 120

Total 368

New Interconnections

Kataiya - Kusaha 132 kV single circuit

15 km

50 MW

Raxaul - Parwanipur 132 kV single circuit

17 km

50 MW

Both transmission lines are being implemented under

Government of India Grant Assistance

Dhalkebar – Muzzaffarpur 400 kV double circuit cross-

border transmission line being implemented under PPP

Model

D – M 400 kV Cross Border Line

Implemented under commercial mode i.e. PPP

Model

The JV companies will develop, own, operate and

maintain the transmission line in their respective

territory.

PTC India signed Power Sales Agreement (PSA)

with NEA on 12 December, 2011 for the bulk sale

of 150 MW of power to NEA

With the commissioning of mega hydro projects in

Nepal, this high capacity interconnection will

facilitate in exporting surplus power from Nepal to

India

D – M Line Project Features

Voltage: 400 kV (initially charged at 220 kV)

and will be operated in synchronous mode with

the Indian grid

Line length: 40 Km in Nepal and 86 km in India

Transmission Capacity: ~ 1,000 MW

Pending commissioning of 220 kV Dhalkebar

substation the Transmission Line was operated

at 132 kV level for importing 80 MW power from

18 February, 2016

Presently 120 MW is being drawn

Wholesale Tariff

For bulk purchase by NEA from IPPs

NRs 4.80/kWh for 8 wet months (mid April – mid December)

NRs 8.40/kWh for 4 dry months (mid December – mid April)

increment at 3 % simple rate per year for 5 times for projects

upto 25 MW

increment at 3 % simple rate per year for 8 times for projects >

25 MW and upto 100 MW

Koshi Agreement : IRs 4.36/kWh

Mahakali Treaty : NRs 5.41/kWh payable to GoN

Power Exchange Agreement : IRs 5.63/kWh at 132 kV

IRs 6.08/kWh at 33 kV

IRs 6.54/kWh at 11 kV

Wholesale Tariff …

Power Purchase from North Bihar Power Distribution

Company Ltd : IRs 5.55/kWh

Power Purchase from Power Trading Corporation of

India Ltd : IRs 3.44/kWh RTC

Power Purchase from NTPC Vidyut Vyapar Nigam Ltd :

IRs 3.60/kWh RTC

Average Consumer Retail Price : NRs 8.60/kWh

in FY 2015/16

anil_rajbhandary@hotmail.com