Potential For Hydropower Exports Underscores Nepal-India Transmission Line


BMI View : We believe that India is in the midst of developing a high voltage direct current transmission line to Nepal as it intends to import electricity from Nepal over the long-term. Nepal is currently developing its hydropower potential, and is poised to have an electricity surplus over the medium- to long-term. We also note that Bhutan is likely to retain its role as a major exporter o f power to India, but highlight that India's increasing reliance on electricity imports from Nepal and Bhutan will exacerbate the vulnerability of the country's electricity supply to weather patterns.

On December 5, India's External Affairs Minister Salman Khurshid announced that the country was working on plans to develop a high voltage direct current (HVDC) transmission line to Nepal. The line is intended to facilitate electricity imports from Nepal over the long-term, and there are also plans to develop lines to import electricity from Bhutan in order to improve energy security in India. These regional connections are part of India's plan to establish a multilateral South Asian Association for Regional Cooperation (SAARC) market for electricity, and a larger SAARC transmission grid.

We believe that India intends to import electricity from Nepal over the long-term as the country is poised to have an electricity surplus over the medium- to long-term. At present, Nepal faces serious energy shortages (leading to occasional load shedding) and imports about 150MW of electricity from India via a 40MW transmission line completed in 2012. However, this situation is set to change as Nepal develops its hydropower potential estimated at over 40,000MW (according to Hydroelectricity Investment and Development). Less than 1GW of this hydropower potential has been developed at present, but positive regulatory developments have greatly improved the outlook for the sector ( see 'New Project Template To Unlock Hydropower', June 22 2012). There are currently 1.7GW of hydropower projects in various stages of development and the completion of these projects, such as the 456MW Upper Tamakoshi hydropower project, could help to change this shortage into a surplus over the next decade.

Nepal: Currently An Importer
Nepal - Electricity Generation And Sales, TWh

or Register now for free to read the full article

This article is tagged to:
Sector: Power
Geography: India, Nepal