Deconstructing the Storage Hydro PPA Pricing Framework: A Critical Review of the ERC Discussion Paper

 Introduction: Nepal’s Growing Need for Energy Security

In recent years, Nepal has experienced a substantial increase in electricity generation capacity, mainly driven by run-of-river (RoR) hydropower projects. However, the country’s energy landscape is still heavily dependent on seasonal river flow, leading to surpluses in the wet season and deficits during the dry season. Recognizing this vulnerability, the Government of Nepal has prioritized storage hydropower projects in the national budget, marking a strategic shift toward energy security and grid reliability.

ERC’s New Draft on Open Access — An Example with Cost Calculation

 

ERC has recently released a draft regarding open access. Experts have long demanded that the private sector be allowed to use the transmission line by paying certain fees. So, this draft is a positive step forward. In this article, I try to calculate how much an open access user has to pay if we export 10 MW. 

Peaking Power: Comparing RoR Hydro, Peaking Hydro, Solar, and Battery-Backed Solar in Nepal

Introduction

In recent times, there has been significant buzz surrounding battery storage for solar power projects in Nepal. Some industry observers believe the recent introduction of the “take and pay” mechanism for Run-of-River (RoR) hydropower projects is part of a broader shift aimed at prioritizing solar power coupled with battery storage. This prompted me to analyze how battery-backed solar stacks up against traditional RoR hydro and peaking RoR projects in terms of energy supply during critical demand periods.

"Hydropower at Risk: Why Nepal Must Embrace Innovation and Abandon Take and Pay PPAs"

The recently announced budget has created a buzz, especially with the introduction of a "Take and Pay" Power Purchase Agreement (PPA) for run-of-river (RoR) hydropower projects. On one hand, the government has set an ambitious target of achieving 28,500 MW electricity production, but on the other, it has taken a contradictory step by formulating policies like the Take and Pay PPA. This system, where electricity is purchased only when consumed rather than through long-term contracts, has led to financial instability for power producers.

 

Misaligned Priorities: Why Nepal’s Hydropower Sector Needs a Regulatory Reset

 

Introduction

Nepal’s hydropower sector is at a critical juncture. While the government claims to prioritize storage-based hydropower projects, real progress is lacking. The recently announced budget emphasizes the importance of storage, but practical and policy-level gaps continue to undermine that objective.

Without decisive changes in regulation, planning, and pricing, Nepal risks wasting its hydropower potential — especially the opportunity to address dry-season energy shortages.