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Report of the Executive Director of the Nepal Electricity Authority (NEA), 2081

News 17 Aug 2024 678 0

Report of the Executive Director of the Nepal Electricity Authority (NEA) Notice 2081
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Report of the Executive Director of the Nepal Electricity Authority (NEA), 2081

I feel honored to present the annual report highlighting the achievements and future directions of the Nepal Electricity Authority on the occasion of its 39th anniversary. The report outlines the significant work carried out by the authority in electricity production, transmission, and distribution, ensuring regular, reliable, and accessible electricity services to the general public. I would like to extend heartfelt gratitude to everyone who has supported in establishing the Authority as a successful commercial institution from their respective areas.

Continuing the progress made over the past seven years, the Authority has achieved historic milestones in the past year. These include increasing electricity production capacity, expanding transmission and distribution systems, increasing domestic consumption, exporting surplus electricity, improving financial conditions, and controlling electricity leakage.

Over the past eight years, the Authority has successfully invested over NPR 100 billion in various electricity generation, transmission, and distribution projects, with additional investments of over NPR 56 billion in its subsidiary and associated companies. Consequently, the total assets of the Authority have increased significantly, from NPR 211 billion to NPR 632 billion.

Below is a brief summary of the activities performed by the Authority in Fiscal Year (FY) 2080/81 and the results obtained:

1. Consumer Numbers and Electricity Access:

Compared to FY 2079/80, the number of consumers increased by 6.33% in FY 2080/81, reaching 5.46 million. Including 475,000 customers utilizing electricity services through community rural electrification, the total number of customers consuming electricity from the national grid has reached 5.935 million. Electricity services have reached approximately 99% of the population across the country.

2. Electricity Production:

In FY 2079/80, 2.93 billion units of electricity were produced. However, due to the decrease in river flows during the dry season, 2.91 billion units of electricity were produced from the Authority's hydropower plants in the past year. The energy available in the Authority's system increased by 12.91% compared to FY 2079/80, reaching 13.96 billion units. Of the total energy available, 39.43% was contributed by the Authority and its subsidiaries, 47% by domestic independent power producers, and 13.57% by imported energy from India.

3. Electricity Import and Export:

Electricity imports from India increased by 3.38% in FY 2080/81 compared to the previous fiscal year, amounting to 1.89 billion units, equivalent to NPR 16.93 billion. Similarly, exports increased by 44.57% in FY 2080/81 compared to the previous fiscal year, reaching 1.94 billion units, equivalent to NPR 17.07 billion. Since last year, Nepal has successfully become a net exporter of electricity.

4. Electricity Consumption:

Compared to FY 2079/80, electricity consumption increased by 9.46% in FY 2080/81, reaching 10.24 billion units.

5. Electricity Leakage:

System electricity leakage was 12.73% in FY 2080/81, a reduction of 0.73 percentage points compared to FY 2079/80. This is the lowest leakage in the history of the Authority.

6. Financial Condition:

The Authority generated NPR 115 billion in revenue in FY 2080/81, a 15.40% increase compared to FY 2079/80. The net profit of the Authority in FY 2080/81 increased by 10.19% compared to FY 2079/80, reaching NPR 13.3 billion. While the Authority's accumulated loss was NPR 34.61 billion until FY 2072/73, the Authority has consistently made a profit since then, with accumulated profit reaching approximately NPR 47.41 billion by FY 2080/81.

7. Projects

Last year, the Authority identified various reservoir-based, semi-reservoir-based, and pump storage projects. Currently, the 332 MW Syapru Lake Pump Storage and the 73 MW Jawa Tila Semi-Reservoir-based projects are in different phases of study.

A notice has been published to invite proposals for the preparation of detailed engineering designs and tender documents for the 10,800 MW Karnali Chisapani Multipurpose Project. Similarly, a proposal has been invited to select a consulting company to prepare the detailed engineering design and tender documents for the 683 MW Sunkoshi-3 Hydropower Project. Additionally, a Memorandum of Understanding (MoU) has been signed with India's Satluj Jal Vidyut Nigam to form a joint venture company for the construction of the 490 MW Arun-4 Hydropower Project.

Last year, high-capacity transmission lines and substation projects, which serve as the backbone of the national transmission line and grid infrastructure, were completed. The 400 kV substations in Hetauda and Inaruwa, as well as the Hetauda-Dhalkebar-Inaruwa 400 kV transmission line's Dhalkebar-Inaruwa section, were completed and brought into operation. In addition to the Hetauda-Bharatpur-Bardaghat and Kali Gandaki Corridor 220 kV transmission lines, several 132 kV transmission lines were completed. Moreover, the 220 kV substations at New Butwal, Trishuli 3B Hub, Chilime Hub, Udipur, and Matatirtha were also completed.

The Khimti-Bahrabise-Kathmandu 400 kV transmission line, the Chilime-Trishuli and Marsyangdi Corridor 220 kV transmission lines, and the 400 kV substations at New Khimti, Bahrabise, and Lapsiphedi, along with the 220 kV substations at Khudi and Marmikchowk, are in the final stages of construction.

Investment from various donor agencies has been secured for the 400 kV transmission line from Butwal to the west of Attariya and the South Corridor transmission line, which passes through major load centers in the country. A master plan for transmission and distribution infrastructure that can meet the demand up to 2050 has been prepared and is being implemented gradually, dividing the major cities into 11 clusters.

By FY 2080/81, the total length of transmission lines increased from 5,742 circuit kilometers to 6,508 circuit kilometers, and the total substation capacity increased from 8,867 MVA to 13,050 MVA. Over the past eight years, 3,597 circuit kilometers of transmission lines and substations with a capacity of 10,826 MVA have been added to the national transmission system.

Currently, 2,293 circuit kilometers of 132 kV, 220 kV, and 400 kV voltage transmission lines, as well as substations with a capacity of 8,086 MVA, are under construction.

Last year, with the construction of 33 kV, 11 kV, and 400 V distribution lines and substations, the total length of distribution lines reached 208,728 circuit kilometers, and the total capacity of 33/11 kV distribution substations reached 2,524 MVA.

To improve the safety and reliability of the distribution system, maintain urban aesthetics, and ensure regular and reliable services, underground transmission and distribution projects have been initiated in major cities like Kathmandu, Lalitpur, Bhaktapur, Pokhara, and Bharatpur. Work is also underway to strengthen the existing distribution network and build additional distribution infrastructure to improve the quality of electricity supply in the Madhesh Province. Smart meters and AMI infrastructure have been successfully installed and are operational for 98,000 consumers under the Ratna Park and Maharajgunj Distribution Centers. The procurement process for the second phase of the project to replace 600,000 electric/electromechanical meters in nine distribution centers in the Kathmandu Valley with smart meters has been initiated.

Since FY 2076/77, the Authority has consistently achieved a double A-plus institutional rating from the International Credit Rating Association (ICRA) Nepal Limited. The credit rating evaluation for FY 2081/82 is currently underway.

The Authority has embraced Gender Equality and Social Inclusion (GESI), supporting women and marginalized communities to participate in its activities.

  • Projects Identified:

    • Syapru Lake Pump Storage: 332 MW (currently in study phase)
    • Jawa Tila Semi-Reservoir-based Project: 73 MW (currently in study phase)
  • Proposals Invited:

    • Karnali Chisapani Multipurpose Project: 10,800 MW (for detailed engineering designs and tender documents)
    • Sunkoshi-3 Hydropower Project: 683 MW (for detailed engineering designs and tender documents)
  • Memorandum of Understanding (MoU) Signed:

    • Arun-4 Hydropower Project: 490 MW (with India's Satluj Jal Vidyut Nigam for joint venture company formation)
  • Completed Transmission Lines and Substations:

    • 400 kV Substations: Hetauda, Inaruwa
    • 400 kV Transmission Line: Hetauda-Dhalkebar-Inaruwa (Dhalkebar-Inaruwa section)
    • 220 kV Transmission Lines: Hetauda-Bharatpur-Bardaghat, Kali Gandaki Corridor
    • 132 kV Transmission Lines: Several completed
    • 220 kV Substations: New Butwal, Trishuli 3B Hub, Chilime Hub, Udipur, Matatirtha
  • Ongoing Construction:

    • 400 kV Transmission Lines: Khimti-Bahrabise-Kathmandu, Butwal to west of Attariya, South Corridor
    • 220 kV Transmission Lines: Chilime-Trishuli, Marsyangdi Corridor
    • 400 kV Substations: New Khimti, Bahrabise, Lapsiphedi
    • 220 kV Substations: Khudi, Marmikchowk
    • Transmission Lines Under Construction: 2,293 circuit kilometers (132 kV, 220 kV, 400 kV)
    • Substations Under Construction: 8,086 MVA capacity
  • Total Transmission Lines (as of FY 2080/81):

    • Length increased from 5,742 circuit kilometers to 6,508 circuit kilometers
  • Total Substation Capacity (as of FY 2080/81):

    • Capacity increased from 8,867 MVA to 13,050 MVA
  • Transmission System Additions (over the past 8 years):

    • Transmission Lines: 3,597 circuit kilometers
    • Substations: 10,826 MVA capacity
  • Distribution Lines (as of FY 2080/81):

    • Total length reached 208,728 circuit kilometers
    • 33/11 kV Distribution Substation Capacity: 2,524 MVA
  • Smart Meters and AMI Infrastructure:

    • Successfully installed and operational for 98,000 consumers
  • Procurement Initiated:

    • Replacement of 600,000 electric/electromechanical meters with smart meters in nine distribution centers in Kathmandu Valley
  • Institutional Rating:

    • Double A-plus rating from ICRA Nepal Limited since FY 2076/77
    • Ongoing credit rating evaluation for FY 2081/82
  • Gender Equality and Social Inclusion (GESI):

    • Support for women and marginalized communities' participation in Authority activities.

8. Subsidiary Companies

The progress of various companies established as subsidiaries of the Authority and the projects operated through them is as follows:

The 22.1 MW Chilime Hydropower Plant promoted by Chilime Hydropower Company Limited and the 456 MW Upper Tamakoshi Hydropower Plant promoted by Upper Tamakoshi Hydropower Limited are operational. Additionally, Upper Tamakoshi Hydropower Limited has started the construction of the 20.66 MW Rolwaling Khola Hydropower Project under the EPC model.

The projects under Chilime Hydropower Company's subsidiary companies, including the 111 MW Rasuwagadhi, 102 MW Middle Bhotekoshi, and 42.5 MW Sanjen projects, are nearing completion, while the 14.8 MW Upper Sanjen Hydropower Project has been producing electricity since October 2023. Similarly, the construction process for the 87 MW Seti River 3 Hydropower Project has been advanced.

The 140 MW Tanahu, 37 MW Trishuli 3B, and 40 MW Rahughat Hydropower Projects are under construction.

The 126 MW Lower Seti Hydropower Project is in the construction phase through Tanahu Hydropower Company.

Similarly, the construction of the 99.8 MW Tamakoshi Fifth, 60 MW Modi, and 210 MW Chainpur Seti Hydropower Projects has begun. The construction process has been initiated for the 1,063 MW Upper Arun, 40 MW Ikhuwa Khola, and 670 MW Dudh Koshi Reservoir-based Hydropower Projects following the completion of their studies.

The 828 MW Uttarganga and 180 MW Andhikhola Reservoir-based Hydropower Projects are in various phases of study.

NEA Engineering Company is providing consulting services in various infrastructure construction areas, including feasibility studies, engineering design, detailed engineering design and study reviews, civil, hydro-mechanical, electromechanical, project management, transmission line and distribution system operation, maintenance, and restoration.

Nepal Power Trading Company has obtained the license to trade electricity and is expected to commence operations in the near future.

Power Transmission Company Nepal has constructed and is operating the Nepal segment of the 400 kV double circuit line between Dhalkebar and Muzaffarpur.

8) Private Sector Participation
Last year, 23 projects with a combined capacity of 463 MW were completed by independent power producers and integrated into the system. So far, 182 hydropower projects with a total capacity of 2,496 MW have been completed and are operational, while 137 hydropower projects with a combined capacity of 3,906 MW have secured investment and are under construction. Additionally, projects with a capacity of 3,899 MW are in the investment mobilization phase. To date, the Authority has signed Power Purchase Agreements (PPAs) for 455 projects with a total capacity of 10,301 MW with its subsidiary companies and independent power producers.

9) Cross-Border Electricity Trade

The Authority has been conducting electricity trading through various channels, including the Power Exchange Market (Day-Ahead Market/Real-Time Market), medium-term bilateral agreements, and the Indo-Nepal Power Exchange Committee. Last year, up to 750 MW of electricity was imported and exported as needed via the 400 kV Dhalkebar-Muzaffarpur transmission line. The 132 kV Mainahiya-New Nautanwa (Sampattiya) transmission line, connecting Nepal and Uttar Pradesh in India, has been completed and is operational, while the construction of the Kohalpur-Nanpara 132 kV transmission line is underway. These transmission lines will enable increased electricity import and export in the coming days.

The Authority has signed a medium-term agreement to export up to 400 MW to Haryana DISCOM through the Dhalkebar-Muzaffarpur 400 kV transmission line and up to 200 MW to Bihar State Power Holding Company Limited through the Nepal-Bihar 132 kV transmission infrastructure. A tripartite agreement between Nepal Electricity Authority (NEA), NVVN India, and the Bangladesh Power Development Board to sell 40 MW of electricity to Bangladesh is in the final stages.

10. Future Directions

To fulfill the Authority’s objectives and provide regular, reliable, and quality electricity services to the general public, effective operations will be conducted in the coming days. The Authority will continue constructing hydropower projects with domestic capital through its subsidiaries and associated companies, focusing on high-capacity reservoir-based, semi-reservoir-based, and pump storage projects. The construction of the 670 MW Dudhkoshi, 1,063 MW Upper Arun, 210 MW Chainpur-Seti, 99 MW Tamakoshi-5, and 60 MW Lower Modi hydropower projects will be prioritized. Similarly, the 490 MW Arun-4 Hydropower Project and the 638 MW Sunkoshi Third Hydropower Project will be constructed in partnership with relevant stakeholders.

The detailed study process for the 10,800 MW Karnali (Chisapani) Multipurpose Reservoir-based Project, which can be promoted as a model project in the South Asian region, has been initiated.

A new policy will be implemented to allow promoters to design hydropower projects that produce more electricity during the monsoon season, with provisions for new power purchase agreements. High-capacity cross-border transmission line projects, such as New Butwal-Gorakhpur, Inaruwa-Purnia, Dododhara-Bareli, Inaruwa-Anarmani, and Chilime-Kerung, will be constructed.

The replacement of pre-installed meters in 600,000 households in the Kathmandu Valley with smart meters, as well as the gradual replacement of meters installed in households across the country with smart meters, will be prioritized.

High priority will be given to expanding the distribution system, with the goal of providing electricity access to every household in the country by 2082 BS.

In order to not only meet the electricity demand until 2050 but also to improve electricity quality and ensure regular supply, the construction of sufficient transmission and distribution systems in Kathmandu and other major cities will be prioritized.

The construction of 400 kV and 220 kV multi-circuit transmission line projects along the Hulaki Highway, supported by financial assistance from donor agencies such as the Asian Development Bank and Exim Bank, will be advanced to manage the electricity demand of various industrial corridors and industrial areas in the country and to provide adequate electricity to industries to be established in the Nepal-India border area in the future and to engage in cross-border electricity trade with neighboring countries.

Necessary programs will be implemented to significantly increase electricity consumption in domestic use, charging stations, agriculture, industry, tourism, etc., to replace traditional and mineral energy. Private sector investment in this business will also be encouraged.

In the next 10 years, various phases of negotiations and discussions are underway between relevant agencies to export up to 10,000 MW of electricity to neighboring countries, and infrastructure development and implementation will be carried out accordingly.

The Nepal Power Trading Company, established as a subsidiary of the Authority, will soon begin domestic and cross-border electricity trading.

A feasibility study for green hydrogen production and utilization in Nepal will be completed, and special initiatives will be taken for its production and promotion.

To develop large infrastructure projects, financial resources will be raised by issuing shares (IPOs) at a premium price. Energy bonds will also be issued to manage immediate investments.

The Authority’s work and processes will be modernized in line with its Information Technology Policy, 2023, by developing secure, reliable, and quality IT infrastructure. By utilizing the Internet of Things (IoT), IT and Operational Technology (IT and OT) will be integrated for digital transformation in operations and management. Necessary arrangements for cybersecurity will be made to make the overall work system of the Authority more secure and reliable.

To realize the concept of digitization, the modern distribution system control center and data center recently established in Syuchatar will be operated effectively.

Professional training programs will be conducted to enhance the skills, capacities, and competencies of employees to qualitatively improve the performance level of the Authority.

Only by providing quality, reliable, and accessible electricity supply and excellent service will the Authority's credibility increase, and economic conditions improve, so all our plans and operations will focus on these goals.

Acknowledgement:

I would like to express my heartfelt gratitude to the Honorable Prime Minister for guiding us toward achieving the goal of a prosperous Nepal and happy Nepalis, as well as for directing the sustainable development of the energy sector.

My sincere thanks go to the Honorable Minister of Energy, Water Resources, and Irrigation, and the Chairman of the Authority's Board of Directors, for providing clear directives and skilled leadership in establishing the Authority as a successful commercial institution.

I am also grateful to the Honorable State Minister of Energy, Water Resources, and Irrigation for their support and goodwill in helping implement the necessary action plans with the Authority's best interests in mind.

I extend my heartfelt appreciation to the Secretary of the Ministry of Energy, Water Resources, and Irrigation for continuously guiding the Authority and assisting in achieving the set goals. I am also thankful to the officials of the Authority's Board of Directors for their invaluable support and suggestions, which have contributed to enhancing the effectiveness of the institution.

I would like to sincerely thank the Government of Nepal, provincial governments, the Ministry of Energy, Water Resources, and Irrigation, the Ministry of Finance, the Ministry of Forests and Environment, and other ministries and associated agencies for their cooperation and coordination in the overall development of the energy sector. I express my gratitude to the parliamentary committees, constitutional bodies, and the Electricity Regulatory Commission for their support in monitoring, reviewing, and assisting in our regular operations.

I would like to thank the Office of the Auditor General, the Public Service Commission, the Office of the Controller General of Accounts, security agencies, local governments, public bodies, banks and financial institutions, auditors, the Federation of Nepalese Chambers of Commerce and Industry, the Nepal Chamber of Commerce, and the Confederation of Nepalese Industries for their participation and support in the various operations of the Authority. Special thanks are extended to Nepal Telecom, the Employees' Provident Fund, the Citizens' Investment Trust, the Hydroelectricity Investment and Development Company, and the National Insurance Corporation for their significant contribution to the development of hydropower in the country by investing in various projects promoted by the Authority's subsidiary companies.

I would like to express special gratitude to the World Bank, the Asian Development Bank, the European Union, the European Investment Bank, the Asian Infrastructure Investment Bank, JICA, KfW, the Indian Exim Bank, the Chinese Exim Bank, the Korean Exim Bank, the Saudi Fund, the OPEC Fund, USAID, GIZ, the Norwegian Cooperation Agency, and other donor agencies for providing loan and grant assistance for capacity building and the development of infrastructure projects operated by the Authority.

I would like to thank the various consultants and construction contractors who have contributed to the timely completion of various projects initiated by the Authority. I also express my heartfelt thanks to private sector promoters and the Independent Power Producers' Association for their significant contributions to Nepal's hydropower development and energy self-reliance. I am grateful to NTPC Vidyut Vyapar Nigam, PTC India, Indian Energy Exchange Limited, and the electricity-related agencies of the governments of Bihar and Uttar Pradesh for their remarkable support in selling Nepal's surplus energy in the Indian market. I would also like to thank the media houses and journalist friends for providing accurate information on the Authority's regular activities.

I extend my special thanks to the official trade unions, active trade unions, and all the employees of the Authority for their unity, dedication, and commitment to achieving the institution's goals and objectives, even in challenging circumstances.

I would like to express my deep gratitude to the general public, consumers, and various business organizations who have continuously supported and encouraged us, providing motivation and inspiration for the Authority's activities. I commit to making every effort to ensure the supply of quality electricity in the coming days.

I express my heartfelt condolences to the employees and civilians who lost their lives due to electrical accidents last year despite taking necessary precautions and safety measures, and I wish the injured a speedy recovery. We will adopt further vigilance and implement effective safety measures to prevent electrical accidents in the future.

Finally, I would like to once again express my sincere gratitude to everyone who has directly or indirectly contributed to the performance and achievements of the Nepal Electricity Authority.

Date: Bhadra 1, 2081 BS

Kulman Ghising

Executive Director, Nepal Electricity Authority (NEA)

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Nepal Electricity Authority (NEA)

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