The Nepal Electricity Authority (NEA) would be able to acquire electricity from the Upper Tamakoshi Hydropower Project, which is a source of national pride, for the lowest rate of any project to date.
The electricity generated by the project is currently the cheapest, according to the power purchase agreement (PPA) signed between the promoter Upper Tamakoshi Hydropower Limited and Nepal Electricity Authority (NEA) before to its development.
The Upper Tamakoshi Electricity Authority will receive an average price of Rs 4.6 per unit based on the PPA rate. For four months during the winter, the price of electricity would be Rs 6.96 per unit, and for the remaining eight months, including the rainy season, it will be Rs 3.63 per unit. However, most riverine projects’ power purchase and selling rates have been set at Rs 4.80 per unit in the winter and Rs 8.40 per unit in the rainy season.
Similarly, the project’s power will increase at a rate of 3% each year for the next nine years, according to the PPA. After nine years of acquiring electricity from Tamakoshi, the project’s power purchase price will be Rs 9.8 paisa for the four months of winter and Rs 4.73 paisa for the next eight months. At the 220 KVA substation in Khimti, Tamakoshi, the project will get electricity at this rate.
In the first year of production, consumers will be able to purchase from Tamakoshi Electricity Authority for an average of Rs 4.78 per unit. Consumer prices would rise in the ninth year, and they will be able to buy at an average of Rs 6.24 per unit. The consumer price was calculated by multiplying the transmission leakage rate by 15%.
Consumers can buy electricity from the Nepal Electricity Authority (NEA) for Rs 9.5 to Rs 10 per unit. As a result, it appears that the authority will benefit financially from Tamakoshi’s electricity. The NEA generates billions of rupees annually from Tamakoshi’s electricity by selling it at a higher price than the purchase price. However, because the project’s production costs have risen, it will take several years for the project to break even.
The promoter, initial shareholder businesses, government workers, NEA staff, local and general share investors will all earn annual dividend returns once the project is profitable. By selling and repurchasing their shares, shareholders can profit from the secondary market.
To run the 456-megawatt project at full capacity, the business proposes to create a 21-megawatt power project from the Rolwaling River. Even in the winter, the river is expected to make Upper Tamakasi run at full capacity.