The Hindu Business Line : NTPC mulls power trading exchange

A SPOT market for electricity trading could be on the anvil soon. The National Thermal Power Corporation (NTPC) has appointed the Nordic Power Exchange as consultant for the establishment of an IT-enabled power trading system and a nationwide power exchange. The Nordic Power Exchange runs the world's oldest and one of the most successful power pooling systems — the Nord Pool.

The exchange mechanism being envisaged would be in the nature of a spot market for power, which would provide a platform for buyers and sellers of electricity to strike trading deals on a real-time basis.

The project is being undertaken by NTPC's trading subsidiary, the NTPC Vidyut Vyapar Nigam Ltd. The other members of the consulting team, which was short-listed through a bidding process, include Crisil Advisory Services and Millhouse Associates, industry sources said.

At present, several utilities such as the Damodar Valley Corporation, NEEPCO and States including Goa, Himachal Pradesh, Uttaranchal and Sikkim are selling their surplus power to others through traders such as the Power Trading Corporation (PTC) and Global Energy Ltd.

``The idea of an exchange is to enable these States to bypass the traders and buy or sell power without any middlemen. Also, the time lag of 2-3 days required at present for striking deals would be eliminated once an exchange is established and deal-making can be done real-time,'' an industry player said. An exchange will help the power producers retain higher trading margins, he said.

Sellers of power can quote their price for delivering electricity to a particular nodal point, which will then be intimated to interested parties. Buyers can then strike a deal for purchasing a requisite quantity of power that can be then evacuated to the point of consumption, if the transfer is possible using the existing grid infrastructure. As the Electricity Act, 2003 permits open access in transmission, the buyer can wheel the power to its location using the existing transmission infrastructure of Power Grid Corporation Ltd (PGCIL) or the transmission and distribution facilities of the respective State Electricity Boards.

In the UK, under the New Electricity Trading Arrangement (NETA), a spot market for power trading enables players to trade electricity close to the time of their actual requirement. Participants can trade power up to an hour before the time of supply. In the US, various regional grids have a pooling mechanism of their own, whereby participants can strike spot deals.

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