Under the MCC compact, a-315km double circuit 400kV transmission line will be constructed. Shutterstock

Once starved for power, Nepal now is an energy surplus country in the monsoon, thanks to the completion of a number of hydropower plants.

The installed capacity has crossed 2,000 megawatts as of the first half of the fiscal year 2021-22, ending mid-January, according to the Nepal Electricity Authority. With more projects nearing completion, Nepal in near future will be in a situation where it must find ways to evacuate the generated electricity worth billions of rupees.
It has to be either sold domestically or exported to power-hungry markets like India and Bangladesh.
But, it needs infrastructure to relay power from production sites.
“We have estimated that the peak hour demands in monsoon, starting June, is expected to reach 1,700 MW,” Suresh Bahadur Bhattarai, spokesperson for the Nepal Electricity Authority, told the Post. “The total installed capacity of projects is expected to reach 2,300 MW by the end of the current fiscal year.”
For a country like Nepal, whose dependency on the income of migrant workers is growing, there is a dire need of infrastructure to trade energy in order to boost its gross domestic product (GDP).
According to a report, Nepal can generate revenue of up to Rs310 billion per year in 2030 and as high as Rs1,069 billion per year in 2045 if the country is able to sell electricity to India by harnessing its hydropower potential.
“To harness electricity of this quantum, Nepal needs to invest up to Rs2,596 billion between 2012 and 2030 and another Rs2,216 billion between 2031 and 2045,” says the report titled ‘Economic Benefits from Nepal-India Electricity Trade’.
Come monsoon, according to an estimate of the country’s power utility, it is likely that there will be a surplus of around 500MW of electricity even during the peak hours.
Nepal’s transmission lines either do not have the capacity or have aged to the point of collapse, hence more such infrastructures are needed, almost immediately, not only for improving supply within the country but also to export power to India and beyond.
When Nepal in September 2017 signed an agreement with the United States to receive $500 million in grants, a majority of the funds was meant for building transmission lines.
The agreement, called Millennium Challenge Corporation-Nepal Compact or simply MCC, however, fell into a political quagmire. The MCC compact meant for electricity transmission lines became one of the highly charged-up issues, with Nepali parties sharply divided over its parliamentary ratification, a prerequisite for the implementation of the project.
Stakeholders say during wider political debates on MCC, what has been forgotten is the importance of transmission lines which are supposed to be developed under MCC aid for the country irrespective of who would build them.
Under the MCC compact, a-315km double circuit 400kV transmission line will be constructed. Five segments of transmission lines to be built are—New Butwal-India Border (18km), New Butwal-New Damauli (90km), New Damauli-Ratmate (90km), Ratmate-New Hetauda (58km), and Ratmate-Lapsephedi (59km).
Once completed, these infrastructures are expected to provide a vital missing link for power projects of different river basins to the existing high-voltage grid in Nepal.
“The 400kV transmission line projects are extremely important for Nepal as the country currently does not have any transmission line with the capacity of 400 KV internally, except for the Dhalkebar-Muzaffarpur Transmission line for cross-border electricity trade with India,” said Dirghayu Kumar Shrestha, chief of the transmission directorate at the NEA. “These projects are significant also for increasing reliability of power supply as well as boosting export and import of electricity to and from India.”
According to the NEA, the absence of high capacity transmission lines has constrained its ability to transport power to the areas where there is high demand for electricity.
As of the last fiscal year 2020-21, the country has 4,874km-long transmission lines, with most of the lines of 132kV capacity.
According to the NEA’s Annual Report 2020-21, of the total length of transmission lines, 3,540.54km is of 132kV capacity, 741.20km of 220kV capacity, 514km of 66kV capacity, and 78km has the capacity of 400kV.
The 78km line is the Nepali part of the Dhalkebar-Muzaffarpur Cross-Border Transmission Line, according to Shrestha.
Under the domestic transmission system, currently, only one 400kV transmission line (Inaruwa-Dhalkebar-Hetauda Transmission Line) is under construction, whose length is around 282km.
A detailed feasibility study is underway for another proposed 400kV transmission line connecting New Butwal, Lamki and Attariya.
Besides them, five segments of the 315km transmission line project expected to be implemented with the MCC assistance are other projects whose capacity is 400kV and they are expected to strengthen the domestic transmission system.
“We don’t need to build a transmission line of less than 400kV capacity, as we are talking about evacuating thousands of megawatts of electricity in the future,” said Kul Man Ghising, managing director of the NEA. “The capacity of the main trunk line should not be less than 400kV.”
According to Ghising, 132kv single circuit lines cannot carry more than 150MW while 220kv single circuits carry only 300-400MW.
“So, it is necessary to develop a transmission line with a capacity of 400kV or more which can carry over 1,200 MW of electricity from one circuit,” Ghising told the Post.
At a time when the country’s transmission system does not have operating power lines with the capacity of 400kV or more, 400kV double circuit transmission lines will be built with the MCC assistance.
“We will have a 400kV backbone transmission system stretching from the eastern region to the western region following completion of the transmission lines being planned under the MCC compact,” said Shrestha, chief of the transmission directorate at the NEA.
According to NEA officials, the importance of the transmission line projects to be implemented under the MCC compact is that they fall between the under-construction 400kV transmission line from Inaruwa to Hetauda on the eastern side and the proposed 400kV transmission line from Butwal to Attariya on the western side.
“Without the construction of transmission lines in the middle section which are to be laid with the MCC assistance, we cannot transport electricity from the eastern region to the western region or vice versa,” said a senior official at the NEA who spoke on condition of anonymity.
According to Shrestha, there are more power projects on the eastern side of the country including the 456MW Upper Tamakoshi Hydropower Project than on the western side.
“But we won’t be able to relay electricity to the western side of the country if there is more demand in places like Butwal, which is an emerging industrial city,” said Shrestha. “So, we are forced to export electricity to India through the Dhalkebar-Muzaffarpur Cross-Border Line. If India refuses to buy our electricity generated in eastern Nepal through this route, we may see our power going to waste.”
For a country like Nepal, stakeholders say, the precious electricity, for lack of which the people suffered power cuts up to 18 hours a day, going to waste would be a disaster.
According to them, even to ensure uninterrupted power supply, the country needs a robust transmission system having capacity of 400kV or more and the projects planned under the MCC compact are a crucial part of that high capacity system.
According to the Millennium Challenge Account-Nepal, the special purpose vehicle established to implement the MCC compact projects, the alignments of the transmission line and segments were selected following careful analyses and feasibility studies that weighed both technical and economic merits, the importance in meeting Nepal’s medium and long-term electricity supply goals, and in consistency with Nepal’s domestic and cross-border transmission investment plans.
The transmission lines will also interconnect with existing NEA substations at Lapsephedi of Kathmandu district and New Hetauda of Makawanpur district.
“Based on a study on the current load flow and future load flows, substations and alignments were determined,” said Khadga Bahadur Bisht, executive director of MCA-Nepal. “There is a risk of a blackout in Kathmandu if a substation based in Matatirtha, Kathmandu goes kaput for some reasons. We need an alternative substation and transmission line.”
According to Bisht, to avoid such a situation, a substation has been planned in Lapsephedi which will become the largest substation to supply electricity to Kathmandu Valley.
Likewise, other substations and power lines have been determined to ensure uninterrupted supply of electricity, if supply from one direction is disrupted, according to Bisht.
The transmission line projects under the MCC compact are also important for electricity trade with India and the South Asia region.
Currently, there is only one 400kV Cross-Border Transmission Line Project between Nepal and India—the Dhalkebar-Muzaffarpur line.
New Butwal-India Border (18km) line project planned to be implemented under the MCC compact is a part of the proposed 140km Butwal-Gorakhpur Cross-Border Transmission Line.
In September last year, the NEA and Power Grid Corporation of India signed an agreement to build the Indian portion of the 400kV Butwal-Gorakhpur cross-border transmission line through joint investment on the Indian side.
The proposed Butwal-Gorakhpur transmission line will have a capacity of relaying as much as 3,500 megawatt of electricity, according to the NEA.
“When there is a single cross-border transmission line, there will be no alternative for cross-border electricity trade with India,” said Shrestha. “It is also difficult to sell the electricity generated in the western side of the country to India through the Dhalkebar-Muzaffarpur line because we don’t have a high capacity transmission structure connecting Dhalkebar and the western side of the country.”
Officials at the NEA said that construction of the New Butwal-India Border Transmission Line to be developed under the MCC compact along with the construction of adjoining transmission lines on the Indian side are important for ensuring the alternative route for large scale electricity trade between Nepal and India.
With Nepal producing more power than its needs in the rainy season, the country either has to increase domestic consumption or export electricity to India to prevent power spillage.
In the last monsoon, the peak hour demand of electricity was around 1,500MW, according to the NEA. The country was producing 2,000MW of electricity, of which 1,900MW was generated from hydropower projects.
After 456MW Upper Tamakoshi started producing electricity in August last year, there was a wastage of power. It could sell 39MW to India’s power exchange market only after Indian approval in November.
The state-owned power utility body expects to add 250-300MW of electricity to the national grid from the end of the current fiscal year in mid-July, from existing over 2,020MW capacity, and the country should be able to sell more electricity to India to prevent spillage, according to NEA officials.
The NEA has already signed power purchase agreements with independent power producers which have a combined capacity of 6172.75MW as of last fiscal year, according to the power utility’s annual report, suggesting that the country would produce more power in the days to come.
A stronger transmission system is a must to transport electricity within Nepal and outside, NEA officials say.
The ongoing dispute over the MCC compact, however, has left the private sector power developers worried.
“The main trunk transmission lines for most of the hydropower projects in Nepal are the ones which are planned to be developed under the MCC compact,” said Ashish Garg, vice-president of Independent Power Producers’ Association of Nepal (IPPAN), a grouping of private sector power developers. “The transmission lines to be built under the MCC will streamline the power within the country and enable power export through the Butwal-Gorakhpur Cross-Border Transmission Line.”
According to Garg, there is a risk of power generated by various hydropower projects going to waste if there is a lack of access to trunk transmission lines.
“Around 50 hydropwer projects with combined capacity of around 3,000MW will face the risk of power spillage to a certain extent if these power lines are not constructed irrespective of who builds them,” Garg told the Post. “As the private sector is developing around 70 percent of power projects whose electricity will be evacuated by these transmission lines to be built under the MCC grant, we are extremely concerned about the ongoing dispute over the MCC compact.”