Electricity Trade in Existing Policy and Laws 2 nd Meeting of Task - - PowerPoint PPT Presentation

Relevant Provisions of Cross Border Electricity Trade in Existing Policy and Laws

2nd Meeting of Task Force-1 19-20 February, 2014, Colombo USAID SARI/EI

Raju Maharjan Government of Nepal

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• Hydropower Potential of Nepal
• Present Generation scenario
• Scenario of Generation by 2018/19
• Scenario of Demand & Supply by 2018/19
• Policy & Laws in Power sector
• Current Developments in Power sector
• Needs for Cross Border Trade

Presentation Outline

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Hydropower Potential of Nepal

4160 MW 32010 MW 20650 MW 22350 MW 4110 MW

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Major River Basins & Identified Hydropower Projects in Nepal

Total 83280 MW

Present Generation Scenario

Capacity in MW Hydro Thermal Total Nepal 712 53.4 765.4 NEA RoR – 381 Storage – 92 473 53.4 526.4 NEA Subsidiary 22

• 22

IPPs 217

• 217



Khimti, Jhimruk and Bhotekoshi which constitute 2/3 of IPPs capacity; was the result of direct funding from foreign institutions Name Details of Major IPPs Hydro Plants Khimti HEP 60 Himal Power Ltd. 2000 Bhotekoshi HEP 45 Bhotekoshi Power Co. Ltd. 2001 Jhimruk HEP 12 Butwal Power Co. Ltd. 1994 Sub Total 117 Others 113 Total 230 Composition of IPP’s Hydro

26 20 5 49 Khimti Bhotekoshi Jhimruk Others 66 3 30 NEA NEA Subsidiary IPPs

Composition of Hydro 4

Scenario of Generation

Particulars Hydro Thermal Total By 2018/19

NEA 667 53.4 720.4 NEA Subsidiaries 748

• 748.0

IPPs 446 446.0 PPA (x- border) 150 150.0 Total 2050.4

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Scenario of Demand & Supply

Year 10/11 11/12 12/13 13/14

Capacity demand (MW)

967 1060 1163 1272

Energy demand/day (dry) GWh

4430.7 4851.3 5349.6 5859.9

Electricity Demand in Nepal

200 400 600 800 1000 1200 1400 2010/11 2011/12 2012/13 2013/14

Capacity Demand (MW)

1000 2000 3000 4000 5000 6000 7000 2010/11 2011/12 2012/13 2013/14

Energy Demand/day (GWh)

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Scenario of Demand (Contd…)

By 2018/19

• Wet Season average load : 1050 (20 hrs. a day)
• Wet Season surplus: at least 950 MW
• Surplus Energy per Wet Season: >3 billion units

worth Rs.15 billion

• Dry Season deficit : 500 MW or

1,05,00,000 KWh/day (approx.)

• Challenges in 2018/19:
• to market wet Season surplus domestically or export.
• to meet dry season domestic demand.

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Policy and Laws in Power sector

Existing

• Hydropower Development Policy, 2001
• Electricity Act, 1992
• Water Resources Act, 1992
• The Foreign Investment & Technology

Transfer Act, 1992

• The Industrial Enterprises Act, 1992
• Environment Protection Act, 1992

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Policy and Laws (Contd…)

Hydropower Development Policy, 2001

From the perspective of export point of view Objectives:  to develop hydropower as an exportable commodity. Strategies:  to purse a strategy of bilateral or regional cooperation in hydropower development taking into consideration

• f the demands of electricity in neighboring countries.

Policies:  To attract foreign investment.  To encourage the export of electricity.

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Policy & Laws (Contd…)

Hydropower Development Policy, 2001

Other Provisions  License to export electricity for projects of capacity more than 100 MW.  License to Transmission & Distribution projects as well.  Investment in Generation, Transmission & Distribution project through solo or JV.  No nationalization of projects during the term of license period.

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Existing Policy (Contd…)

Hydropower Development Policy, 2001

Other Provisions  Foreign Currency Exchange facility and repatriation

• Cent per cent of the payment of principal and the interest
• f foreign loan.
• Profit and dividend of an export oriented project.
• Amount received from the sale of share of foreign

investment.

• 75% of amount received from the sale of share in local

currency.

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Existing Policy (Contd)…

Hydropower Development Policy, 2001

Institutional Arrangements

 Electricity Tariff Fixation Commission to be replaced by Nepal Electricity Regulation Commission (NERC) as a regulator body.  DOED to act as a study and promotion body.  WECS to conduct load forecast and policy research works.  Electric Energy Management Research institute to be established to carry out study and research  Unbundling of NEA

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Policy & Laws (Contd…)

New Acts to come

• Electricity Act (New)
• Time bound and transparent license procedures.
• Provisions of Trading license.
• Nepal Electricity Regulator Commission Act
• to develop competition in the electricity market.
• to balance supply & demand.
• to fix electricity tariff.

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Current Developments in Power Sector

Cross Border Interconnections

 Construction of 400 kV D/C TL from Dhalkebar (Nepal) to Mujaffarpur (India) has been started.  Contract signed with M/s TATA Projects Ltd., India on 19th December, 2013.  The commissioning date is on June, 2015.

NIETTP (Nepal-India Electricity Transmission & Trade Project)

 400 kV D/C TL from Hetauda-Dhalkebar –Inaruwa (285 km) is under construction.  220 kV D/C TL from Hetauda-Bharatpur (73 km) & Bharatpur–Bardaghat (75 km) are under construction.

Current Developments (Contd…)

POWER DEVELOPMENT MAP OF NEPAL

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Current Developments (Contd….)

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Current Developments (Contd…)

Proposed

 Feasibility study of second 400 kV Cross Border TL from Bardghat (Nepal) to Gorakhpur (India) is being conducted.  Many other interconnections at 400 kV have been under consideration and study.

Open Access

 GON is ready to invite private investment in transmission line projects under BOOT model.  NEA has already drafted the TSA and presented it to the Board for approval.  The draft TSA has the provisions of return of investment in transmission line within 15 years and the wheeling charge to be fixed by NEA.

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Current Developments (Contd…)

Foreign Direct Investments

In last 6 years (2008-2013), Total FDI = NRs. 39.86 billion (USD 403.87 Million)  NRs.22.2 billion (USD 224.90 Million) from Chinese investors in 4 projects of total capacity 167 MW.  NRs.12.07 billion (USD 122.3 Million) from Indian investors in 17 projects of total capacity 2339 MW.  NRs.4.28 billion (USD 43.35 Million) from South Korean investors in 4 projects of total capacity 257 MW.  NRs.1.84 billion (USD 18.64 Million) from Canadian investors in 3 projects of total capacity 265 MW.

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Current Developments (Contd…)

Foreign Direct Investments

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S.N. Project name Capacity (MW) Developer Status 1 Arun III 900 SJVNL Ready for construction 2 Upper Karnali 900 GMR Ready for construction 3 Tamakoshi 3 6 SN Power Ready for construction 4 Upper Marsyangdi 600 GMR Ready for construction 5 Lower Arun 400 Braspower Ready for construction 6 Likhu- IV 120 Bhilwara Ready for construction 7 Balephi 50 Bhilwara Ready for construction 8 Upper Marsyangdi ‘A’ 50 Sino Hydro JV Under construction 9 Upper Madi 22 CWE JV Under construction 10 Upper Trishuli-1 230 SKEPC JV Under construction 11 West Seti 750 TGCC, GoN ………..

Current Developments (Contd…)

Call for Proposals

 NEA has decided to purchase winter & dry season (Mid December to Mid May) energy generated from export oriented hydropower projects.  Maximum purchase price is Nepalese Rs. 10.60  Priority for the proposals offering to deliver winter dry energy before the end of year 2020.  Called request for proposal on 11th January 2014.  Four developers have submitted proposals for supplying 2000 GWh (approx.) energy in dry season.

• KSK Energy Ventures Ltd. -Tila-I (440 MW) & Tila-II (420 MW)
• GMR Energy Limited (India) - Upper Marsyangdi (600 MW)
• Raajratra Energy Holdings Pvt. Ltd. (India)-MMG (282 MW)
• Brass Power International (Brazil)-Lower Arun (400 MW)

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Needs for Cross Border Trade

From Nepal’s perspective  New Electricity Act, Nepal Electricity Regulatory Commission Act & other acts to be enacted for enhancing power trade.  Timely completion of Dalkebar (Nepal)-Muzaffarpur (India) 400 kV transmission line by June 2015.  Restructuring of Generation, Transmission & Distribution system.  To open access on transmission line.  To fix wheeling tariff.

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Needs for Cross Border Trade

From Regional perspective  First bilateral Power Trade Agreement among neighboring countries which governs all the policy aspects of trade including market access.  Adequate high capacity cross border transmission lines.  Grid synchronization.  Notion of complementaries of demand & supply among the neighboring countries.  Move towards deregulated electricity market.

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