Nepal is expected to see a sharp increase in electricity imports this coming winter due to delays in repairing hydropower plants damaged by floods and landslides caused by heavy rainfall on September 27 and 28.
The Nepal Electricity Authority (NEA) reports that the 456 MW Upper Tamakoshi Hydropower Project, a key electricity producer, has not resumed operations since the disaster struck over a month ago. The prolonged outage has resulted in a loss of NPR 1.42 billion for the state-owned utility.
Earlier this year, the NEA had anticipated reducing electricity imports during the winter due to an expected surplus in electricity production. However, with significant damage to key hydropower plants, including Upper Tamakoshi, this plan is now in jeopardy. NEA Managing Director Kulman Ghising acknowledged that if the affected plants are not operational by winter, Nepal may need to increase electricity imports.
The Upper Tamakoshi plant is expected to complete its repairs within the next seven months.
Typically, Nepal imports around 600 MW of electricity during the winter months due to reduced energy generation from hydropower plants, which are largely run-of-river types. During the dry season, when water flow decreases, electricity production can drop by more than half.
The damage to hydropower plants is also likely to affect the NEA’s profitability in the current fiscal year. In the previous fiscal year, the NEA posted a profit of NPR 13.31 billion, with a significant portion of the earnings coming from electricity exports to India.
With the country’s electricity production currently at 3,200 MW and peak demand reaching up to 2,600 MW, the NEA has been able to export surplus power to India. In the first four months of FY 2024/25 (June 2 to October 11), the NEA earned NPR 7.93 billion from exporting 1.3 billion units of electricity to India.
In FY 2022/23, Nepal became a net exporter of electricity for the first time. During this period, the NEA exported electricity worth NPR 16.93 billion to India while spending NPR 16.81 billion on electricity imports. As a result, the NEA made a net profit of over NPR 120 million from the trade.
Nepal sells electricity to India at an average rate of NPR 8 per unit, but purchases electricity at a rate as high as NPR 18 per unit.
