NEA Receives Overwhelming Response for Solar Power PPAs, Aiming to Boost Winter Energy Supply

The Nepal Electricity Authority (NEA) is intensifying efforts to increase electricity production from solar power to address energy scarcity during the winter months. With hydropower currently generating about 95% of the country's 3,200 MW installed capacity, the NEA is seeking to diversify the energy mix by boosting solar power generation.

In April 2024, the NEA issued a call for power purchase agreements (PPAs) for 800 MW of solar power. The response from energy entrepreneurs was overwhelming, with 134 companies submitting applications to produce a total of 3,600 MW—more than four times the NEA's initial target. These proposals span 300 different projects.

The NEA's strategy involves purchasing 800 MW of solar-generated electricity within the next two years, with an emphasis on projects near NEA-owned substations with capacities of 200 kV, 132 kV, and 33 kV. Solar projects are capped at 150 MW each, with PPAs signed for a duration of 25 years. The base rate for solar electricity has been set at Rs 5.94 per unit, with the goal of integrating up to 10% of the national grid's capacity from solar sources.

Currently, the NEA has signed PPAs for 175 MW of solar power, 107 MW of which are already operational. This includes a 25 MW solar project at the Devighat Hydropower Plant. Additional PPAs for 30 MW of solar projects are in the process of being finalized. NEA Managing Director Kulman Ghising emphasized that connecting solar-generated electricity to the main grid is crucial for ensuring adequate energy supply during winter, when hydropower production typically declines.