NEA Board Decided to Open PPA for 1015 MW Solar and up to 10 MW Hydropower Project

Kathmandu; The Nepal Electricity Authority (NEA) has decided to open a Power Purchase Agreement (PPA) for solar power and hydropower projects of up to 10 MW. This decision was made during a meeting of the Board of Meeting (BOM) held on Friday, 9th February.

The decision has been passed by the BOM, but a senior official of the NEA clarified that it has not been made public yet. "The proposal for PPA has been presented to the meeting and is under discussion," he said. "The official decision has not been taken out yet."

As of now, there is a PPA for 7,650 MW under Run-of-River (ROR) projects. Similarly, there is a PPA for approximately 4,500 MW for Peaking Run-of-River (PROR). According to this, a total of 12,150 MW of hydropower project PPA has been done.

According to the concept of energy mix, when calculating 10 percent of the total PPA, 1,215 MW of solar projects should be included. Among them, with approximately 200 MW of solar PPA already covered, there is a remaining requirement to finalize the PPA for 1,015 MW. The same amount of solar power projects has been targeted by the NEA to be included under PPA, as indicated by the source.

The NEA for hydropower projects has expressed its intention to open PPAs for small hydropower of up to 10 MW without any limitation within the country. According to them, "Currently, there is no limitation within the previous 15,000 MW or the recent Govt target 28,500 MW brought in, and the decision to open PPAs for small projects of up to 10 MW is aimed at promoting them." The official stated, "For solar projects, the decision has been made to open PPAs for up to 10 percent, which equates to 1,015 MW for now."

The Ministry of Energy, Water Resources, and Irrigation (MOEWRI) set a long-term target to achieve self-reliance in electricity within the energy sector. On May 8, 2018, a blueprint (white paper) was released detailing the current situation and future roadmap. The goal was to generate 15,000 MW of electricity through the implementation of energy projects over the next 10 years.

Within the framework of the principle of setting a fixed ratio of approximately 30-35% for reservoir and pump-storage, 25-30% for RoR projects, 30-35% for PRoR, and 5-10% for other alternative sources within the 15,000 MW, the arrangement was mentioned for procuring electricity PPA based on the Take and Pay basis.

Similarly, the Cabinet Meeting held on July 8, 2022, re-evaluated the ratio of production blending, reducing it by 10% for reservoir projects and increasing it by 10% for RoR. This adjustment maintained the ratio at 20-25% for reservoir-based, 25-30% for PROR, 40-45% for ROR, and 5-10% for other alternative sources.

The previously set limit of 35% for RoR projects had been increased by an additional 10%, reaching 45%, which equated to 6,750 MW, from the earlier limit of 5,250 MW. Consequently, a PPA for 1,500 MW had been opened for RoR projects as a result of this adjustment.