Nepal and India have agreed to set up an 'Energy Banking' mechanism that would help the Himalayan country export its surplus electricity to neighbour India during the monsoon season and import power during its lean season in winter.
The agreement on the 'Energy Banking' mechanism was arrived at during a meeting between the Nepali and Indian Energy Secretaries in Pokhara on Thursday, following recommendations by the electricity authorities of both the neighbours.
The government officials from Nepal said the agreement is based on the nature of demand and supply, the state news agency RSS reported.
Nepal's demand for electricity reaches its peak during the summer months, but production slumps to one-third of demand. Likewise, in India demand reaches its peak during the monsoon season and slumps during winter.
Following the agreement, Nepal will export its surplus electricity to India during the monsoon season.
The Nepal Electricity Authority (NEA) stated that in a couple of years, about 4,750 megawatts surplus electricity that would otherwise have remained unused will now be utilised. Converting the surplus electricity into monetary value would work out to around Nepali Rs one trillion and 79 billion.
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With the losses mounting over time, the NEA had stopped signing power purchase agreements (PPA) with the private sector producing electricity. According to a PPA signed by the NEA, almost 2,250 megawatt run-of-the-river (ROR) electricity goes waste during the monsoon season.
The Energy Banking agreement would be initiated from newly- constructed Dhalkebar-Mujaraffpur 400 KVA transmission line. As per the agreement, India has also agreed to provide up to 80 megawatt electricity to Nepal, through setting up a temporary 50 MVA capacity temporary transformer at Tanakpur. India has agreed to set up a new transformer within two months. At present, Nepal is able to import only 30 to 35 megawatt electricity from Tanakpur.
Aiming to make Nepal's electricity mechanism strong and stable, the Indian side has agreed to extend the capacity of the Raksaul-Parwanipur and Kataiya-Kusaha 132 KV transmission line.
An equilibrium of 50-50 megawatt electricity is being imported through these two transmission lines.
With the reformation of the transmission lines, it would be easy for India to import electricity from Nepal based on the Energy Banking mechanism.
Besides the two transmission lines, another circuit is vacant and Nepal has proposed adding another one, to which India has agreed India has also given the green signal to Nepal to extend its transmission lines into Indian territory as well as do the repairing.
After the transmission line is extended into India it would help the Bhairahawa Industrial Estate manage the load through 132 KV transmission line. Likewise, India also has given its nod to construct the Kohalpur-Nanpara 132 km transmission line as requested by Nepal and would start the feasibility study of the site -- covering a distance of 50 km (25 KM in Nepal and 25 KM in India).
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