Government advances reforms to link power generation, transmission and trading

KATHMANDU: The Ministry of Energy, Water Resources and Irrigation is advancing a series of measures to connect electricity generation, transmission and market access as part of efforts to mobilize stalled investments, attract new investment and make the energy sector a foundation for economic growth, according to information made public by the secretariat of Minister Biraj Bhakta Shrestha.

In the first phase, the Nepal Electricity Authority (NEA) has extended the Required Commercial Operation Date (RCOD) for 27 projects with a combined capacity of 540.47 megawatts. The measure applies to projects facing delays in meeting their commercial operation deadlines.

A total of 320 projects with a combined capacity of 8,292 megawatts are currently under construction. The RCOD extension does not apply uniformly to all projects. They have been classified into four categories based on their progress and Power Purchase Agreement (PPA) obligations. Projects placed in Class C will receive a Notice of Default. Private-sector power producers have expressed satisfaction with the process.

The subcommittee formed to prepare criteria for opening new PPAs has also submitted its recommendations. The criteria are based on project readiness, access to transmission infrastructure and financial closure. Their implementation will depend on a decision by the NEA Board. Power producers had previously raised concerns over delays in opening PPAs and policy uncertainty.