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New Delhi: The Central Electricity Regulatory Commission (CERC) has announced new regulations that will govern trading of powerwith neighbouring countries. The new regulations have allowed cross border entities to trade on Indian Day Ahead Market on exchanges for the first time.
Under the Cross Border Trade of Electricity Regulations 2019, sale and purchase of power between India and the neighbouring countries will be allowed through mutual agreements between the local entities and the entities of the neighboring countries through bilateral agreement between two countries, bidding route or through mutual agreements between entities.
“Any electricity trading licensee of India may, after obtaining approval from the Designated Authority, trade in the Indian Power Exchanges on behalf of any Participating Entity of neighbouring country, for the specified quantum as provided in the approval subject to compliance with the applicable Regulations of the Commission,” CERC said in a notification on the regulations.
The new regulations provide for a designated authority appointed by the power ministry for facilitating the trade; a transmission planning agency; a nodal agency for settling charges and a system operator while the Central Transmission Utility (CTU) will grant long term and medium term open access.
According to Rajesh Mediratta, Director-Business Development at Indian Energy Exchange (IEX), the new regulations were long due and awaited as they have allowed trading through power exchanges. “All other modes of transactions viz. long, medium and short term trade were already happening so far. The regulations have now allowed trade of electricity through the exchanges in the Day Ahead Market (DAM),” he said.
The regulations state that the tariff for import or export of electricity across the border will be determined through competitive bidding or through mutual agreements signed between the parties under the overall framework of agreements signed between India and the neighbouring countries.
Under the new regulations, foreign entities will have to apply to the CTU for seeking connectivity, long-term access or medium-term access while applications for short-term access will have to made to the National Load Dispatch Centre (NLDC) which will act as the system operator.
The regulations have detailed provisions governing multiple areas of the cross border trade including application fee; treatment of delay in Transmission system and Generation projects; bank guarantee; metering arrangements; data and communication facilities; and cyber security etc.
Currently, a mere 3,000 Mw of power is traded in the South Asia region among seven countries including India, Bhutan, Bangladesh, Nepal, Pakistan, Sri Lanka and Myanmar. The country annually imports around 1,200 mw power from Bhutan, exports 1,200 Mw to Bangladesh, exports 450 Mw to Nepal