NEA | Solar energy | Power Purchase Agreement

Solar plant in Nuwakot | Source: World Bank Nepal/Facebook
Solar plant in Nuwakot | Source: World Bank Nepal/Facebook

News

NEA moves closer to awarding 800 MW solar projects

800 MW out of 259 projects totaling 3,492.5 MW will be offered PPA at a maximum base rate of Rs 5.94 per unit

By the_farsight |

The Nepal Electricity Authority (NEA) is set to open financial proposals from 127 solar developers under competitive tariff-based bidding on October 22. The 127 developers are selected for setting up grid-connected Solar PV Power plants with proposals for 3,492.5 MW (259 projects in total). 

In March, the NEA invited bids for 800 MW, where it received proposals totaling 3,600 MW — over four times the invitation — from 134 companies.

“127 developers for 259 projects have been considered substantially responsive in technical bid evaluation”, said the NEA, which has scheduled financial bids opening for them on October 22.

The final selection for Power Purchase Agreements (PPAs) will depend on pricing and substation capacity. The NEA has set a price ceiling of Rs 5.94 per unit for solar energy, and PPAs will be awarded to projects for 25 years that will offer a lower rate and built near 200, 132, and 33 KV substations.

The NEA plans to procure 800 MW of solar energy within the next two years, with the requirement that smaller projects (under 10 MW) provide electricity within 18 months, while larger projects will have to be commissioned within two years. Solar projects can typically be operational within a year and a half, making them a priority over longer-term hydropower projects.

The NEA’s plan is in line with the Nepal government’s plans to promote renewable energy sources like solar and wind to meet rising electricity demand, especially in the winter capping their energy mix at a maximum of 10% of the total installed capacity through all Power Purchase Agreements (PPAs).

According to NEA, it issued the request for proposal for the 800 MW in 2023/24 building on the interest shown by developers in solar power. Earlier, the NEA had opened competitive proposals for 100 MW solar projects. Last fiscal year, NEA concluded PPAs with eight solar plants totaling 90 MW. 

As of 2023/24, the NEA has completed PPAs for 205 MW of solar energy while over 100 MW is currently operational including a 25 MW plant in Nuwakot.

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