IPPAN Opposes NEAs New Power Regulation Method, Urges Government to Withdraw It
9th July 2026, Kathmandu
The Independent Power Producers’ Association, Nepal has officially urged the government to immediately suspend the newly introduced Electric Power and Energy Schedule Determination Method-2083.
IPPAN Opposes NEAs Method
The private sector energy body claims that several restrictive provisions within the regulation will severely damage domestic hydropower development and discourage future private capital investments.
The institutional protest highlights growing friction between private infrastructure developers and the state-owned power utility, the Nepal Electricity Authority. Industry experts warn that the policy changes could block active energy projects and stall the national strategy to build a robust green energy grid.
Formal Memorandum Submitted to Energy Minister
IPPAN President Mohan Kumar Dangi led an executive delegation to present a formal memorandum directly to the Minister for Energy, Water Resources, and Irrigation, Biraj Bhakta Shrestha. The association requested the immediate formation of a high-level technical task force containing representatives from all primary energy stakeholders to completely review and revise the regulation before any official implementation steps occur.
According to the filed memorandum, the new operational methodology contains flawed clauses that undermine the basic technical and financial viability of ongoing and future plant designs. The group pointed out that the restrictive framework will create major obstacles to achieving the government’s long-term target of generating 30,000 megawatts of electricity within the next decade.
Restrictions on Technology Upgrades and Equipment Efficiency
A primary objection raised by the association focuses on clauses that prevent generation developers from adopting advanced engineering technologies. The new regulation restricts upgrades to vital plant equipment, such as turbines, generators, and large transformers, beyond the specific efficiency benchmarks originally written into older Power Purchase Agreements.
The private sector body argued that this restriction penalizes efficiency and prevents operators from maximizing water resource usage. By blocking the installation of modern equipment, the policy forces older production units to run on outdated technologies, lowering overall energy generation across regional river basins.
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Controversial Efficiency Standards for Capacity Expansion
The energy association also strongly criticized the introduction of dual efficiency standards separated between new purchase contracts and existing project expansion designs. The organization claims that the administrative move appears deliberately designed to prevent capacity upgrades in hydropower facilities that are already undergoing active structural development.
Furthermore, the memorandum raised serious objections regarding newly mandated hydrological data assessment protocols. While specialized government departments already possess extensive hydrological flow data, the new method forces a single rigid study formula while placing total legal responsibility for data errors onto private developers and independent consultants, an approach labeled by the group as highly impractical.
High Constraints on Minimum Capacity Growth
The private sector group expressed strong opposition to the statutory rule requiring existing plants to increase their installed capacity by at least 15 percent to qualify for an official expansion allowance. Detailed engineering and topography studies show that most running projects can realistically expand their output capacity by only around 10 percent.
Setting the expansion baseline at an unreachable 15 percent permanently eliminates opportunities to optimize electricity generation from active infrastructure investments. The energy guild warned that this restriction will cause an inefficient use of natural resources, estimating that roughly 15 percent of potential power generation capacity across several projects could be permanently lost under these rules.
Conflicts with Previous Corporate Board Decisions
The association highlighted a clear policy contradiction, noting that while the electricity authority is legally permitted to sign purchase agreements for extra power, restricting capacity upgrades below 15 percent creates a major regulatory conflict. Additionally, the new guidelines run counter to previous formal decisions passed by the utility’s own board of directors.
The board’s 963rd executive meeting had clearly allowed hydropower projects holding active agreements to increase their capacity by up to 25 percent. Furthermore, the subsequent 990th board meeting went a step further, deciding to remove that upper limit entirely for production plants that satisfied specific technical conditions.
Because the newly issued guidelines directly conflict with these earlier institutional commitments, the private sector body has demanded an immediate withdrawal of the document to allow for a comprehensive redrafting process through collaborative stakeholder consultations.
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