Nepal is currently selling electricity in India’s ‘Day Ahead’ market at a rate of 16 Nepali rupees per unit, which is equivalent to 10 Indian rupees per unit according to India’s Energy Exchange (IEX) data on Tuesday. The Indian market operates in 15-minute intervals, and the prices are determined by market dynamics, with all 96 blocks trading at 10 Indian rupees per unit on that particular Tuesday. This increase in electricity prices can be attributed to various factors, including coal import issues during the Russia-Ukraine conflict.
About two years ago, India established regulations for its energy market, capping the maximum rate for buying and selling electricity at 12 Indian rupees per unit. Recent flooding in Indian hydropower projects on the Tista River has caused a drop in electricity production, leading to higher demand and, consequently, more favorable prices for Nepal’s electricity. Normally, electricity prices in Nepal range from 5 to 8 Nepali rupees per unit, but in India’s real-time market, it’s currently trading at 10 Indian rupees per unit.
A significant development occurred when the Nepal Electricity Authority (NEA) gained permission this month to participate in the IEX real-time market in India. Previously, they could only sell electricity through day-ahead bidding, but now they can bid and sell electricity 15 hours in advance.
On July 31st, the Indian Ministry of Electricity revised procedures for cross-border electricity import/export approvals, allowing authorized bodies from neighboring countries to engage in the real-time market. NEA has been approved to export 522 MW of electricity to the competitive market and 632 MW to the state of Haryana, including 110 MW through NVVN. Of this, 562 MW of electricity is exported through the Dhalkebar-Muzaffarpur 400 KV international transmission line, with an additional 70 MW via the Mahendranagar-Tanakpur 132 KV transmission line. Between mid-July and mid-September, NEA exported electricity worth 5.43 billion Nepali rupees to India, marking a significant milestone in Nepal’s energy export efforts.
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