Request for expression of interest for selection # 1176350
Assignment Title
Analysis of the Indian power market and offtake possibilities for Nepalese producers
Publication Date
16-Mar-2015
Expression of Interest Deadline
26-Mar-2015 at 11:59:59 PM (EST)
Language of Notice
English
Assignment Country

IN - India
The World Bank intends to finance the assignment/services under Trust Funds:


BB - BANK BUDGET
TF018772 - DFAT CSA SDIP
Individual/Firm
The consultant will be a firm.
Assignment Description
SELECTION FOR CONSULTANTS BY THE WORLD BANK
REQUEST FOR EXPRESSIONS OF INTEREST
Electronic Submissions through World Bank Group eConsultant2
https://wbgeconsult2.worldbank.org/wbgec/index.html
ASSIGNMENT OVERVIEW
Assignment Title: Analysis of the Indian power market and offtake possibilities for Nepalese
producers
Assignment Countries:
- India
ASSIGNMENT DESCRIPTION
Power trade with India is of critical importance for Nepali IPPs to achieve bankable hydropower
projects. At the same time cross-border offtake arrangement between India and Nepal remain a
major challenge with many unknowns and different commercial options to be explored.
This assignment explores potential cross-border offtake arrangements and salient features of the
Indian Electricity market that will determine optimal offtake arrangements.
1.0 Project Background and context
Nepal has a large hydro potential which at least 43,000 MW are economically viable. Currently,
733 MW of hydropower capacity are installed (compared to a peak demand of > 1200MW).
Hydropower remains the major source and the least-cost option for power generation. The export
of power to Indias energy market remains an important goal. However strong institutional,
regulatory, and physical capacity bottlenecks remain. Recent changes in bilateral ties between
Nepal and India have significant implications in this context. During the recent visit of Prime
Minister of India, Narendra Modi to Nepal, the two countries signed a Power Trade Agreement
(PTA). The Government of India lifted restrictions on electricity as a tradable commodity
between the two countries. Shortly after this, Project Development Agreements (PDAs) were
signed for two major hydropower projects (Upper Karnali and Arun III). An interconnection
(Dhalkebar to Muzaffarpu) is currently under construction and two more are planned. Given
Nepalese hydrology, most hydro projects are likely to have large summer surplus to sell to India
with limited winter production. It is possible that the Nepalese utility (NEA) buys all winter
production but some projects could be exclusively for exports with large summer production and
limited winter one.
India still faces major electricity supply constraints, especially in certain regions. Inter-grid
trading has helped in recent years with massive transfers of power notably from the Eastern
region to the Northern region. The following figure presents the inter-grid balance between 2013
and 2014.
Short term trading represents currently approximately of electricity demand and the volume of
short term power exchanges has been growing since 2006. More than 60 traders are now licensed
to trade and more than 3000 industrial customers are eligible and able to contract directly. The
short term market represents a new market opportunity for Nepalese hydro developers along the
possibility to sell to traders or directly to industrial customers.
2. Objective of the assignment
The objective of this assignment is to prepare an in-depth assessment of the Indian power sector
and to investigate the offtake possibilities for Nepalese developers. The assessment should cover
the legal®ulatory framework for power trading, the type and number of players, inter-grid
trading, volumes and pricing on the regulated and open markets, etc. The assessment should
cover also transmission pricing and congestion management (zonal pricing and other methods)
with particular references to eventual transmission prices from Nepalese border injection.
Finally, based on the assessment, the Consultant should recommend possibilities and best offtake
options for Nepalese developers.
3.0 Scope of Work
The indicative but not exhaustive scope of work could be envisaged as follows:
Task 1 Review the legal and regulatory framework for power trading in India
The Consultant shall review and analyze the legal®ulatory framework to understand how short
and long term power trading is organized. Key laws and specific regulations should be presented
as well as their potential impacts for Nepalese developers . Special attention should be given the
licensing for trading and eligible consumers (for eg CERC licenses for traders and requirements
for long term power off take agreements specific to IPPs).
Task 2 Analysis of the Indian power market
The Consultant is expected to carry out a comprehensive assessment of the Indian power market
and more specifically:
Inter grid trading volumes
Short versus long term trading (volumes and prices)
OTC versus power exchanges trading (volumes and prices)
Participants
The Consultant will also briefly review the power trade agreements between Bhutan and India
and more specifically the structure of PPAs and their prices if available. Finally, the Consultant
will discuss with the Indian Power exchange (IEX) their proposal to develop an access point for
Nepal via their platform: status, transmission capacity allocation issues, etc.)
Task 3 Analysis of transmission rules and tariffs
The consultant shall carry out an analysis of the open access rules (both inter and intra state) and
the associated wheeling charges or transmission tariffs as well as transmission capacity
allocation methods. Based on the methods applicable (for eg. point of connection), the
Consultant will estimate the potential transmission tariff for various Nepalese interconnection
points and assuming Delhi or other large potential delivery points.
The Consultant will also analyze the various transmission capacity allocation methods used in
India (including market splitting) and more specifically, those that would apply for the various
potential Nepalese interconnection points, both for short and long term trading. Delhi or other
large potential delivery points can be assumed.
Currently, there are no markets for ancillary services in India and imbalances are penalized via
unscheduled interchange (UI) penalties. We assume that Nepalese sales would be at the border
and that interconnection deviations will be handled between the NEA and Indian system
operators. The Consultant will nevertheless assess if Nepalese developers could sell some
ancillary services directly or via NEA.
Task 4 Possibilities and offtake options for Nepalese developers
Based on his assessment of the Indian market, the Consultant will present the various offtake
possibilities for Nepalese developers selling into the India market. The Consultant would also
assess potential PPA structure and indicative price level for each structure: for example, summer
sales contract only, yearly sales (with higher summer sales), long term and short term.
INDIVIDUAL / FIRM PROFILE
The consultant will be a firm.
SUBMISSION REQUIREMENTS
The World Bank now invites eligible consultants to indicate their interest in providing the
services. Interested consultants must provide information indicating that they are qualified to
perform the services (brochures, description of similar assignments, experience in similar
conditions, availability of appropriate skills among staff, etc. for firms; CV and cover letter for
individuals). Please note that the total size of all attachments should be less than 5MB.
Consultants may associate to enhance their qualifications.
Interested consultants are hereby invited to submit expressions of interest.
Expressions of Interest should be submitted, in English, electronically through World Bank
Group eConsultant2 (https://wbgeconsult2.worldbank.org/wbgec/index.html)
NOTES
Following this invitation for Expression of Interest, a shortlist of qualified firms will be formally
invited to submit proposals. Shortlisting and selection will be subject to the availability of
funding.
Qualification Criteria




1. Provide information showing that the firm is qualified in the field of the assignment.
2. Provide information on the technical and managerial capabilities of the firm.
3. Provide information on their core business and years in business.
4. Provide information on the qualifications of key staff.
* - Mandatory
Selection and contracting will normally be made from responses to this request for expression of
interest. The consultant will be selected from a shortlist, subject to availability of funding.