KATHMANDU, Oct 12: Nepal Electricity Authority (NEA) today signed a Memorandum of Understanding with the Chinese solar energy firm Hunan Yueer Solar Energy Technology Co. Ltd. for installing a 30-Megawatt solar station in the country. It would be the largest ever solar energy project in Nepal.
The MoU stated that that a solar company would be established in Nepal and NEA will buy and sell electricity produced from the solar station. The site of the installation is yet to be decided.
NEA will be responsible for providing space for installing the solar panels whereas the total investment will come from the Chinese firm. “Actual cost of production and other details are yet to be finalized but for now we have agreed to produce 30 MW of electricity from solar power; this would be a major demonstration project for the country,” said Sher Singh Bhat, director at NEA´s Department of Power Trade.
“It has also been agreed that the feasibility study is to be completed within four months. If found feasible, the installation could be done within two years and it will be connected directly to the national grid.”
The Chinese company will hold 92 percent share of the solar company to be established within the next six months. NEA will have an 8 percent share. However, the company will be responsible for installing the system and will bear the cost of the installation in full.
The document says the installation work will be completed within two years from the date of the construction contract, which will be entered into after the feasibility study and the establishment of the company in Nepal.
A joint team will be formed immediately for the preparatory work and it will negotiate various technical issues as well as identify the installation site.
The company will sell the electricity to NEA for 35 years and then hand over the system to the government. “It is technically feasible to generate that amount of power but the electricity will be more expensive than hydropower,” said Mukesh Ghimire, solar energy expert at the Alternative Energy Promotion Center under the Ministry of Environment, Science and Technology.
According to Ghimire, if all the electricity generated to date across the country by small solar panels at individual homes is added up, it would amount to about 13 MW. So, the installation of such a big project would be a milestone for solar energy development in the country.
A few weeks ago, NEA had signed a power purchase agreement (PPA) for the solar energy project at Sundarighat that generates 650 KW, a first such agreement for solar power. The PPA rate was Rs 5.1 per unit.
Experts say that Nepal has a potential of about 21,000 MW of electricity from solar power at present. “It depends on how we install but there is a huge potential for solar energy and it could be harnessed if big projects are also launched and connected to the national grid, " added Ghimire.