Nepal Faces Potential Loadshedding Amidst Import Reliance and Infrastructure Damage

Kathmandu. Nepal had daily 18-hour loadshedding about 8 years ago. Nepal Electricity Authority used to publish a daily 18-hour loadshedding schedule. The daily routines used to start according to the loadshedding schedule of the authority, but it has been about 8 years since the daily 18-hour dire loadshedding ended. On November 1, 2016, the Kathmandu Valley was made loadshedding-free for the first time, choosing the day of Lakshmi Puja, when electricity demand is highest, as a trial. Electricity was supplied continuously without any interruption in the Kathmandu Valley on the night of Lakshmi Puja, ending loadshedding. However, the government officially announced the complete end of loadshedding across the country, including industrial areas, from May 14, 2018. Eight years after the country got rid of loadshedding, there are signs and risks of loadshedding recurring in the coming winter. Damage to hydropower projects due to Bhote Koshi and continuous rainfall causing floods and landslides has indicated the possibility of loadshedding in the winter months. Although electricity is saved in the Nepal Electricity Authority's system during the monsoon and it becomes possible to export to India and Bangladesh, Nepal's energy security appears to be dependent on India as soon as winter arrives. The authority projects that the peak electricity demand within the country will reach about 2,300 megawatts in the upcoming winter (dry season). The authority stated that domestic production is insufficient to meet this demand, and it is necessary to import 1,154 megawatts of electricity from India, which is almost half of the total demand. Electricity is being imported from various Indian mechanisms to meet the domestic electricity demand, said Executive Director of the Authority, Dirghayukumar Shrestha. According to Executive Director Shrestha, who spoke at a press conference at the authority on Monday, the peak electricity demand last winter was 2,292 megawatts. Therefore, the authority is preparing to meet the demand with 1,154 megawatts of imports and 1,218 megawatts of domestic production. He stated that currently, 3,739.40 megawatts of electricity is being produced in Nepal. An additional 320 megawatts will be added by November. However, Executive Director Shrestha said that only 30 percent of the total production capacity will be produced in winter, so only 1,218 megawatts of domestic electricity will be produced. To meet the winter demand, the authority will import 600 megawatts from the 400 KV Dhalkebar-Muzaffarpur line and 54 megawatts from the 132 KV Taptap-Mahendranagar line, Shrestha said. Most recently, India has renewed the agreement to allow electricity import for up to 18 hours a day until mid-January. India will have to renew it again for January. It will depend on whether India renews it for 24-hour RTC import instead of 16-18 hours. 'Electricity demand in India also increases significantly in winter. Therefore, India cannot supply electricity for 18 hours. That's why in the past, India did not supply electricity for 3-4 hours during the peak evening hours in Nepal, and we are not expecting it this year either,' said Director Shrestha. 'Instead, we are in the process of importing 150 megawatts through Real Time Clearing (RTC) mode.' Importing electricity through the RTC medium is a suitable option for energy security, according to Shrestha. Based on his statement, it appears that loadshedding is likely in the coming winter. If the transmission projects affected by natural disasters and the technical and strategic complexities in imports from India are not resolved in time, there is a risk of electricity cuts again in the industrial and domestic sectors in the coming winter. * Plan and uncertainty of importing 1154 MW from India. To meet the winter demand, Nepal Electricity Authority has prepared a plan to import a total of 1,154 megawatts of electricity through various cross-border transmission lines and agreements, which will be imported through the Dhalkebar-Muzaffarpur 400 KV line with 600 MW (through the Indian energy market), 54 MW from the Taptap-Mahendranagar 132 KV line, and 300 to 350 MW from the 132 KV lines connected to Bihar, including Kataiya-Kushawa, Raxaul-Parwanipur. Additionally, the authority plans to import 50 MW from the Gandak-Ramanagar line connected to Uttar Pradesh and 150 MW through bilateral agreements from India in winter. However, the implementation faces significant strategic risks, as the plan appears simpler on paper. India has currently allowed electricity import for only 18 hours a day until mid-January. Since demand is high in India during Nepal's peak evening hours, India has refused to supply electricity for 3 to 4 hours in the past. It is still uncertain whether India will renew the permit for 24-hour import from January onwards. Executive Director Shrestha of the authority says that efforts are being made diplomatically with the Indian government. He stated that the authority has intensified preparations from now on to reduce the risks expected in winter. In 2079 BS, although a 230 MW import agreement was made with India's NVVN, electricity was not received due to lack of approval from the Indian government. In 2080 BS, the agreement was canceled due to price disputes. The new rate for imports through the Nepal-India Electricity Exchange Committee (PEC) for 2027 is yet to be determined. * Self-reliant in Monsoon, Dependent in Winter. Nepal's electricity system is still more than 70 percent dependent on Run-of-River (RoR) projects based on river flow. Currently, Nepal's total installed electricity generation capacity has reached 3,739.40 megawatts, and with an additional 320 megawatts to be added by November, this capacity will reach approximately 4,060 megawatts. During the monsoon, when the water flow in the rivers is high, all projects operate at full capacity, leading to the export of surplus electricity to India after domestic consumption. However, as soon as winter begins, the water flow in glaciers and rivers significantly decreases. In winter, these projects produce only 30 percent of their total installed capacity. Despite a capacity of 4,060 megawatts, Nepal can generate only about 1,218 megawatts from its hydropower plants in winter. Last winter, the peak electricity demand reached 2,292 megawatts. According to the authority, this year's demand is estimated to increase to around 2,300 megawatts compared to last year. Therefore, the authority has no option but to import from India to cover the electricity deficit of more than 1,100 megawatts created in winter. * Authority's Backup Strategy: Reliance on RTC and Kulekhani. To avoid the uncertainty of the Indian open market, the authority plans to adopt the Round-the-Clock (RTC) or Take-or-Pay model, which ensures continuous electricity supply 24 hours a day. According to Executive Director Shrestha of the authority, the process has been initiated with Indian companies to purchase 150 MW of RTC electricity from January 2027 to May. He stated that this agreement would open a way for Nepal to receive electricity continuously even during crises in India. According to Shrestha, the authority is working through a technical committee to ease electricity supply in winter. He informed that the authority is fully active to prevent loadshedding. Shrestha mentioned that Kulekhani, the country's only reservoir-based project, is full to its capacity due to heavy rainfall this year. Unlike in the past, there is no shortage of water, so there is a plan to balance the system by operating all three units of Kulekhani when there are technical obstacles in imports from India or during peak evening demand. Executive Director Shrestha said that the Chobar, Phutung, and Mulpani new substations would be charged to manage the load in the Kathmandu Valley, and the much-awaited Dhalkebar-Hetauda 400 KV transmission line would be operational immediately after Dashain. He stated that once this line is operational, it will be easier to bring electricity imported from India to Kathmandu and improve voltage. Demand and Production Projection (in Megawatts) Current total installed capacity - 3,739.40 MW Additional capacity to be added by November - 320.00 MW Total expected installed capacity - 4,059.40 MW Domestic production in winter (30%) - 1,218.00 MW Peak demand in upcoming winter - 2,250 - 2,300 MW Net electricity deficit in winter - Approximately 1,100+ MW Source of 1154 MW to be imported from India * Flood and Landslide Impact: Bhote Koshi 430 MW Out of System. This year, as winter approaches, the recent continuous rainfall and floods and landslides have dealt a major blow to the energy sector. Damage to various hydropower projects and transmission lines due to floods and landslides in Bhadra and Ashwin has caused problems in the system, with approximately 1,000 MW of electricity affected. Specifically, the collapse of towers in the section from Dana in Myagdi to Kushma in Parbat along the Kaligandaki Corridor 220 KV transmission line has made the production of 190.4 MW of electricity uncertain. This has halted electricity from seven projects, including Nilgiri-1 (38 MW), Nilgiri-2 (71 MW), and Mistrikhola (42 MW). Furthermore, 430.8 MW is out of the system due to flood damage to the Trishuli corridor, considered the lifeline for electricity supply to the Kathmandu Valley. It is not possible to generate electricity from these projects immediately. The Bhote Koshi river floods have added to the challenges. The floods have destroyed 11 projects that have been completed and are in operation, or are in the process of being connected to the transmission line, or are under construction. If the transmission lines damaged by the floods are not restored temporarily or permanently before winter, managing electricity in major cities, including the capital, will become more complicated. Currently, per capita electricity consumption in Nepal is 465 kWh per hour. If the transmission structures damaged by the floods are not repaired in time, if India does not grant permission for electricity import during winter peak hours, or if the RTC agreement is not approved in time, the country may face the brunt of undeclared power cuts again.