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NEA Nepal, CEA India Agree to Start Energy Banking by Next Fiscal Year

The joint conclusion of Nepal Electricity Authority (NEA) of Nepal and the Central Electricity Authority (CEA) of India on the Nepal-India Power Exchange Committee meeting held in New Delhi was to start energy banking by 2019-2020. The meeting was held on 5th July and 6th July.

Why it matters:

  • Energy banking means exchanging energy for energy; when there is excess energy in one country it will be supplied to the other country and vice-versa.
  • Under this agreement, if the amount of energy exchanged between Nepal and India is equal then no there will be no charges imposed on either side. Likewise, if one country imports more energy than it has exported then it will have to pay for the additional imported electricity amount.

What they are saying:

  • Prabal Adhikari, spokesperson for NEA said that the discussions had already been held regarding the amount of electricity to be exchanged and the electricity would be imported and exported to different countries in different seasons.
  • Within the next six months, the guidelines on energy banking will be prepared. Since energy banking has been implemented in various cities in India, the CEA has been assigned the task to prepare the guidelines.
  • According to NEA, Nepal’s electricity production will reach 5,600 MW by the fiscal year 2025-56, and the domestic demand is expected to reach 3,500 MW. That will allow the excess 2,100 MW of electricity to be exported to India through the energy banking agreement.

One more thing:

In the same meeting, India’s proposal to hike the electricity tariff by 5% from 15% to 20% was rejected by NEA.

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