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Foreign Participants in Indian Power Exchanges to Rise Soon, Energy News, ET EnergyWorld

By on June 21, 2021 0

New Delhi: India’s electricity exchanges may soon welcome a larger number of buyers and sellers from neighboring countries with the operationalization of cross-border sale and purchase of electricity for which regulations have already been issued by the Central Electricity Regulatory Commission (CERC) and the Central Electricity Authority (CEA) notified the proceedings.

Currently, the country’s largest electricity exchange, Indian Energy Exchange (IEX) has started trading electricity hosting participants from Nepal on its platform.

Rohit Bajaj, head of business development at IEX, told IANS that the potential for cross-border electricity exchange is immense and that his platform may soon welcome participants from Bangladesh and Bhutan with whom India has already. an electricity transmission line.

“We launched this market on April 17 and have already traded 150 million units of electricity. The potential is good for purchase deals from power-deficit countries such as Nepal and Bangladesh, while put options could come from Bhutan. exchange platform for trading taking into account the discovery of competitive prices that it allows.

“This is a step forward towards the development of regional markets. With better connectivity in the coming years, cross-border trade could also include countries like Myanmar and Sri Lanka,” Bajaj added.

After Nepal, the plan is for India’s power exchanges to start welcoming buyers and sellers from countries like Bhutan and Bangladesh. This could be followed by bringing participants from Myanmar and Sri Lanka.

Such participation of foreign entities in Indian stock exchanges would not be done directly but through an India Electricity Trading Licensee. Exchanges will take place through bilateral agreements between two countries, through calls for tenders or through mutual agreements between entities. In the case of Nepal, NTPC Vidyut Vyapar Nigam (NVVN) is the business partner that has registered the Nepal Electricity Authority (NEA) for cross-border trade up to 350 MW now.

“Myanmar and Sri Lanka are also under consideration now, but it will take a little bit as we have no connectivity with Sri Lanka and have very limited connectivity with Myanmar. With Sri Lanka, the cabling on the high seas is under consideration, ”Bajaj told IANS.

Experts point out that cross-border transactions would only be successful once the monopoly of state-owned distribution entities is broken and a multi-buyer-multi-seller marketplace is developed for trade to effectively determine the price.

Although correct estimates have yet to be made, industry sources have said there could be demand for 300-400 MW from cross-border trade in the spot market initially.

Currently, around 3,000 MW of electricity is marketed in the South Asian region between seven countries, including India, Bhutan, Bangladesh, Nepal, Pakistan, Sri Lanka and Myanmar.

India imports approximately 1,200 to 1,500 MW of electricity from Bhutan each year and exports approximately 1,200 MW to Bangladesh, 500 MW to Nepal and 3 MW to Myanmar.

A vibrant electricity trading market with the ability to trade in the spot market for consumers in the domestic and overseas market would also be good news for power producers, as they could overcome any low demand situation. on the domestic market to transfer capacity abroad.