The Hindu Business Line : ‘Time for industries to make use of energy exchange’

Coimbatore, Feb. 10 It is time for industries to come on board the Indian Energy Exchange Ltd as participation of stakeholders in the power sector is increasing and the operations of the exchange are stabilising.

Unlike trading in commodities or stocks, where delivery was optional, trading in IEX results in definite delivery, which helps industries meet their power requirements.

These points were brought forth at a meeting, ‘How To Buy/Sell Electricity Power Through IEX Ltd’, organised jointly here by Indian Energy Exchange, New Delhi, and Annamalai Capital Services (P) Ltd, Coimbatore.

IEX to the rescue

Addressing the gathering, Mr Rajesh K. Mediratta, Vice-President, IEX, New Delhi, pointed out that Coimbatore, which was a major industrial hub of Tamil Nadu, faced power shortage. The electricity exchange could help mitigate the power problem faced by the industries here, he said. The industries could use the trading platform to buy or sell power. The advantage of the exchange is that (power) trading can be done for even one hour a day or for a minimum of one MW.

IEX, which has been in existence since June last, has brought to the exchange most major utilities, distribution companies, generating companies and independent power producers. Now, Indian Energy Exchange wants the industry to make use of the facility.

The exchange has “provided the liquidity the industry needs”.

Mr Mediratta said delivery was definite in IEX, “irrespective of what happens otherwise”.

Deals data

Mr Tuhin Roy, Assistant Manager, Business Development, IEX, Kolkata, said India generates about 1.5 lakh MW of power, of which nearly 90 per cent was traded through power purchase agreements (PPAs).

The agreements were on long-term, fixed-rate basis between generators and buyers, mostly State utilities, and the balance was traded in the open market also known as “short-term markets”. The exchange has no role in determining the PPAs.

IEX is the only player in this market and operates in the “day-ahead market” – trading in power only for the next day.

He said the exchange ensures payment to the seller and power to the buyer. As of now, delivery-based contract is being used but IEX would soon introduce weekly and monthly contracts where power can be sold for a week or month.

Explaining the benefits of trading through IEX, Mr Roy said it ensures better price discovery, lesser overhead expenses, payment guarantee and better price signal.

Commodity

Mr K. Annamalai, promoter of ACSL, said energy has become a tradable commodity.

The meeting was convened to create awareness on how private power generators could sell surplus power and how industries could source power to meet their needs without depending on Government assistance, he added.

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