Open access to reduce electricity cost of industries <\/strong><\/p>\n Kathmandu. Preparations are underway to implement a provision to reduce the cost of electricity by linking the investment made by the industries in hydropower projects with their own electricity consumption. The Electricity Regulatory Commission has proposed a separate standard for industries that want to use electricity through open access. <\/p>\n The draft of the two directives on captive power generation plant and connectivity prepared by the commission has sought to establish the basis for the industry to use its own investment and to get electricity from alternative sources through the national transmission grid. <\/p>\n According to the proposed provision, the concerned consumer should own at least 26 percent of the shares in the captive plant. The concerned consumer will have to consume at least 51 percent of the total electricity generated from such plants. The draft provides that industries fulfilling these conditions can be exempted from cross-subsidy and additional charges. <\/p>\n This can give an opportunity to the cement, steel, and other industries, which consume a large amount of electricity on a regular basis, to meet their energy needs by investing in hydropower generation. If the industry can use electricity from the project of its own investment, it can reduce the amount of electricity that needs to be purchased from the NEA. <\/p>\n At present, there is a need for clear criteria to allow industries to use the electricity generated for their own industrial consumption even if they invest directly in electricity generation. The Commission’s proposal seeks to combine investment, production and consumption into a single structure. <\/p>\n The proposed provision also includes the option of generating electricity not only by a single industry but also by more than one consumer through a special purpose company or group structure. <\/p>\n In such a structure, the total share ownership of the consumers should be at least 26 percent and the group will have to consume at least 51 percent of the total electricity generated. It has also been proposed that each consumer should consume electricity in proportion to his share ownership. There is a provision to accept fluctuations up to 10 percent. <\/p>\n The option of group investment may give an opportunity to industries that cannot build their own hydropower projects or have higher costs of investing alone to participate in joint power generation. However, it will be necessary to coordinate the power demand, share ownership and project production of the participating industries. <\/p>\n Similarly, if the generation capacity of the project and the consumption time of the industry do not match, then the need to purchase electricity from the grid may remain. Therefore, it cannot be concluded that the cost of electricity of the industry will be reduced only on the basis of tariff waiver. The cost of generation, transmission and distribution charges and the timing of power supply will also determine this. <\/p>\n Basis for Electricity Transaction with Alternative Supplier <\/strong><\/p>\n The draft on connectivity prepared by the Commission has proposed technical standards for electricity producers and consumers who want to be connected to the national transmission grid. <\/p>\n According to the draft, power generating stations with a capacity of more than 5 MW who want to use open access will be connected to the transmission grid of 66 kV or above or a 33 kV transmission substation. Similarly, industrial and commercial consumers with contracted power demand of 5 MW or more can be connected to the transmission system of 33 kV or above. Ram Prasad Dhital, chairman of the commission, said that this arrangement can provide a technical basis to the producers and consumers who want to use electricity outside the traditional power purchase structure with the NEA. However, he said that the permission to buy, sell or exchange electricity will not be automatically obtained if it is connected to the grid. For this, a separate permission will have to be obtained according to the guidelines on open access. <\/p>\n The cost of the infrastructure to be connected to the grid will be borne by the applicant or the concerned transmission licensee as per the agreement. There is also a proposal to fix the application fee for connectivity from Rs 50,000 to Rs 3,50,000 depending on the capacity. <\/p>\n Expectation that competition will put pressure on electricity prices <\/strong><\/p>\n After the implementation of open access, consumers will be able to get electricity from sources other than the NEA. This can increase competition between electricity producers and suppliers. <\/p>\n When competition expands, producers have to compete on price and supply terms to attract consumers. This can reduce the cost of production and give industrial consumers the opportunity to choose the right supply option. <\/p>\n However, the impact will depend on the price of electricity available under open access, the charges for the use of the transmission and distribution systems, the reliability of the supply, and the terms of the agreement.<\/p>\n The actual profit can be determined only by comparing the total cost incurred by the industry while using its own production or taking electricity from other producers with the cost of electricity purchased from the NEA. <\/p>\n After the approval of the <\/strong> Guidelines, the Commission is collecting public comments on the draft of both the guidelines. Based on the suggestions received, the Commission is preparing to approve the necessary amendments and then draft the necessary agreements for the implementation of open access. <\/p>\n Dhital said that the experts have been given a month’s time to review the draft and preparations are being made to implement the test once the necessary process is completed.<\/p>\n According to him, the implementation of the test is expected to start by November-December. <\/p>\n For this, necessary agreement should be made between the electricity authority, consumers and suppliers, as well as the transmission and distribution system and technical infrastructures. The proposed facilities and procedures will be formalized only after the directive is approved and implemented. Therefore, the extent to which open access affects the cost of electricity of the industry and how easy it will be to get electricity from alternative suppliers will be clear after implementation. <\/p>\n","protected":false},"excerpt":{"rendered":" Open access to reduce electricity cost of industries Kathmandu. Preparations are underway to implement a provision to reduce the cost of electricity by linking the investment made by the industries in hydropower projects with their own electricity consumption. The Electricity Regulatory Commission has proposed a separate standard for industries that want to use electricity throughContinue reading “Open access paving way for industries to reduce electricity cost”<\/span><\/a><\/p>\n","protected":false},"author":0,"featured_media":114936,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[147],"tags":[],"class_list":["post-114957","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-samachar-en"],"acf":[],"jetpack_featured_media_url":"https:\/\/arthakhabar.com\/wp-content\/uploads\/2026\/10\/photo_8cb21fad.png","_links":{"self":[{"href":"https:\/\/arthakhabar.com\/ak_api\/wp\/v2\/posts\/114957","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/arthakhabar.com\/ak_api\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/arthakhabar.com\/ak_api\/wp\/v2\/types\/post"}],"replies":[{"embeddable":true,"href":"https:\/\/arthakhabar.com\/ak_api\/wp\/v2\/comments?post=114957"}],"version-history":[{"count":1,"href":"https:\/\/arthakhabar.com\/ak_api\/wp\/v2\/posts\/114957\/revisions"}],"predecessor-version":[{"id":114958,"href":"https:\/\/arthakhabar.com\/ak_api\/wp\/v2\/posts\/114957\/revisions\/114958"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/arthakhabar.com\/ak_api\/wp\/v2\/media\/114936"}],"wp:attachment":[{"href":"https:\/\/arthakhabar.com\/ak_api\/wp\/v2\/media?parent=114957"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/arthakhabar.com\/ak_api\/wp\/v2\/categories?post=114957"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/arthakhabar.com\/ak_api\/wp\/v2\/tags?post=114957"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}