Cross Border Power Trade Between Nepal and India: An Analysis for Power Trading Option in Indian Electricity Market

Abstract

The power system in Nepal has been a regulated electricity market. The government-owned utility has a franchised monopoly over the transmission and distribution of electricity and owns a significant portion in the generation sector with encouragement for private participation on the generation side of the hydropower project. The power system in Nepal gets its maximum share of electrical power from its hydropower plants, and cross border power import from India to meet the generation deficit. Nepal's power system has an enormous potential to add up to its generation capacity, enhanced opportunities for earning export revenues, improve the power sector performance, and increase the electricity supply. India has a competitive wholesale electricity market, so to trade power with India, power producers in Nepal have to compete with the domestic market of India. Therefore, it is important to know the price it will receive if it wishes to trade energy with India. The research study emphasizes the electricity market in Nepal and envisages the possibilities to trade power in Indian electricity market platforms.