The Hindu Business Line : Power utilities make presentation to CERC on futures trading

THE concept of a wholesale market for electricity in the country is fast taking shape. National Thermal Power Corporation (NTPC), PTC India Ltd (PTC) and Power Grid Corporation of India Ltd (PGCIL) have jointly made a presentation to the Central Electricity Regulatory Commission (CERC), explaining the broad contours of the power exchange planned by them.

The three blue-chip Central power utilities are jointly working on the country's first pooling mechanism and the presentation to CERC marks the first step in getting the project off the ground. The utilities may also initially acquire some equity in the project, Government officials said.

"We have made a presentation before the CERC, explaining the broad contours of the project. Another meeting with the CERC is scheduled shortly, following which we would put in the application for a licence," an official with one of the utilities said.

The utilities have already appointed Nord Pool, which runs power pools globally, and Crisil Advisory Services as consultants to look into the various aspects of setting up the exchange. A high-powered Task Force comprising officials from NTPC, PGCIL, PTC, Central Electricity Authority (CEA) and the Ministry of Power had visited the US, Norway, Canada, Australia and the UK to study the power markets there and zero in on the ideal model for India.

A power exchange will function on the lines of commodity exchanges such as NCDEX or MCX and will provide a platform for buyers, sellers and traders of electricity to enter into contracts. Currently, an inter-regional power transfer capacity of around 6,000 MW is available in the country, which is expected to increase further to about 9,500 MW in the coming years.

With the transmission capacity being put in place for large size inter-State projects, the inter-regional transfer capacity is likely to get further enhanced. "Substantial opportunities therefore exist to improve the economic efficiency and security of supply through trading of power. A mechanism such as an exchange would greatly facilitate the trading of surplus power among players," an official involved in the exercise said. With a greater optimisation of capacities and increased competition expected among generation, trading and distribution firms, power tariffs are likely to come down in the long-run, the official said.

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