Nepal Electricity Authority has been granted permission to trade electricity with India and Bangladesh, reports The Himalayan Times.
The government of Nepal gave its consent at a cabinet meeting on Monday. It is mandatory for the NEA to receive the approval of the Government for foreign trade in electricity.
Minister of Energy, Water Resources and Irrigation Barshaman Pun said Monday’s Cabinet meeting approved selling electricity to India and Bangladesh at high domestic production and importing electricity from neighbouring countries at low production. With the approval of the government, NEA will now be able to buy and sell electricity at a reasonable price.
“Like trade in goods, electricity trade has also been approved in real-time,” said Pun.
He said NEA was given permission for inter-country trade so that it could keep a record of electricity trade and price. NEA has also been given approval for electricity trade so that documents can be exchanged through an electronic medium.
NEA has been preparing for a short-term sale of electricity in India’s energy exchange market for a long time. In the energy exchange market of India, similar to shares, electricity can be bought and sold in real-time.
NEA has designated Indian NTPC Vidyut Vyapar Nigam Ltd as its nodal agency to represent it in the market.
With government approval NEA would be able to exchange electricity in real-time in India and Bangladesh. It would make it easier for NEA to sell electricity to India or Bangladesh immediately at night or in the afternoon when there is excess electricity available.
As per the government agreement, when required, the NEA exchanges electricity with the bordering Indian states. NEA can now trade electricity in any state in India, NEA executive director Kulman Ghising said.
Energy Secretary Dinesh Ghimire said the nod from the government came at a time when Nepal’s electricity production is growing. Cabinet approval means that NEA will be able to exchange electricity with the two countries by competitively deciding the price.