The Independent Power Producers’ Association of Nepal (IPPAN) has expressed dissatisfaction following a request from the Nepal Electricity Authority (NEA) to reduce electricity production during the rainy season. IPPAN has claimed that the NEA’s actions have resulted in the waste of 500 megawatts of electricity generated by 30 hydropower projects.
While discussions between the authorities and energy producers have indicated a potential reduction in electricity load by up to 10 percent during the rainy season, the NEA has asked for a reduction in electricity generation. The NEA’s reasoning is that excess electricity is produced during the rainy season, leading to wastage without sufficient consumption. However, IPPAN has announced its intention to take legal action against the NEA, arguing that the NEA has reduced production despite adequate transmission line capacity.
During a discussion held in Kathmandu on Monday, Ganesh Karki, the president of IPPAN, emphasized that a slight decrease in NEA’s profit is insignificant compared to the impact of a power project’s failure, which would have far-reaching consequences. Karki stated that even if a project is closed after the signing of a Power Purchase Agreement (PPA) as a ‘Take or Pay’ arrangement, the NEA should still bear the financial responsibility.
Mohan Kumar Dangi, the Senior Vice President of IPPAN, highlighted that the NEA’s actions affect the investments of four million ordinary investors and all banks in the sector who have been involved in production. Dangi questioned how a company with a capital of Rs 400 million could allow electricity worth Rs 220 million to go to waste.
Guru Prasad Neupane, a consultant and energy entrepreneur associated with IPPAN, criticized the NEA for wastefully managing electricity despite sufficient transmission line capacity.
According to the sources of NEA, various factors have contributed to electricity generation problems. Some projects have faced infrastructure challenges either from the producers themselves or from the NEA. Additionally, flood damage and technical issues have also disrupted electricity generation.
Several hydropower projects, such as Kabeli B1 Hydropower Station (25 MW), Kabeli B1 Cascade Hydropower Project (9.94 MW), Iwa Khola Hydropower Project (9.9 MW), Upper Hewa Khola A Hydroelectric Project (14.9 MW), and Lower Hewa Khola Hydropower Project (22 MW), have been unable to produce a total of 81.74 MW of electricity due to flood damage.
Furthermore, the Upper Khorung Khola Small Hydroelectric Project with a capacity of 7.5 MW is facing problems in one unit, resulting in the production of only 3.5 MW. Similarly, the Solu Dudhkoshi Hydropower Project, with a capacity of 86 MW, is facing issues in one unit, leading to the production of only 28.6 MW. The Dordi Khola Hydropower Project (27 MW) has been unable to produce 18 MW, and the penstock erection at Ghalemdi Hydropower Limited (GKHPP) has resulted in the non-production of 5 MW.
Promoters are demanding that the NEA relieve the load as the authority can increase the load by utilizing the Dhalkebar-Muzaffarpur transmission line when the connection agreement is made prior to the PPA.
A nine-member committee, led by Uttam Bhlon Lama, Vice President of IPPAN, has been formed to prepare a report on the impact of load shedding. The committee includes treasurer Narendra Ballav Panth, member Mithun Poudel along with Lama on behalf of IPPAAN are in the committee, while 6 members are kept according to the corridor on behalf of promoters. The members are Arjun Prasad Gautam, Sujan Paudel, Satish Neupane, Bir Bahadur Ghale, Mohan Karki and Uttam Amatya.
