At a time when India’s new regulations for cross-border trade of electricity have raised eyebrows in Nepal, the Indian embassy said on Monday it will facilitate and promote such trade with greater transparency, consistency and predictability in regulatory approaches.
After new guidelines were issued by India’s power ministry on December 10, the Nepali media reported they included discriminatory provisions that prohibit private and third country hydropower developers in Nepal from exporting electricity to India with a one-time approval.
The guidelines state only companies in Nepal that are wholly owned by the Indian government or the private sector, or private companies with 51% or higher Indian stake will be eligible to export power and that they will be given one-time approval to sell power.
Nepal has decided to talk with India about this issue, according to media reports. India currently is engaged in cross-border trade of electricity with Bangladesh, Bhutan, Nepal and Myanmar.
The embassy, while clarifying India’s position, said, “The guidelines specify the institutional framework and required processes to facilitate power trade. It also broadly specifies about the participating entities, and provisions have been made such that maximum entities get opportunity to trade electricity with India.”
For ease of doing business, India has simplified the process for all government-owned companies of neighbouring countries, the embassy said. This does not debar other companies or entities from participating in the trade of electricity. “The guidelines also facilitate determination of tariff for such trade of electricity,” it added.
Though power exchanges are not operational in neighbouring countries and they do not have significant experience of trading through such exchanges, India has taken the lead in promoting trade of electricity. “ The modalities and products of such power trade through the exchanges will be as per the extant power market regulations,” it said.
The guidelines also referred to the transmission system, scheduling and accounting, grid operation safety and security and gave the broad contours for cross-border trade of electricity. The detailed process and procedure will be made more transparent through regulations which will be issued shortly by the Central Electricity Regulatory Commission.
With the issuance of the guidelines, it is expected that the hydropower potential of neighbouring countries will be developed in a fast track mode as stakeholders would have transparency in the utilisation of power projects, the statement said.
The trade of electricity has increased in the region in recent years. India has been able to supply 6 billion units (BU) of power within three years to Bangladesh.Around 2 BU of electricity has been supplied to Nepal during the last two years. More cross-border connections have been planned.