The Hindu Business Line : NTPC-led group submits plan for power exchange

New Delhi, July 21 A National Thermal Power Corporation-led consortium has submitted its proposal to the Central Electricity Regulatory Commission (CERC) for setting up a national power exchange.

The consortium, which has on board the National Hydroelectric Power Corporation (NHPC) and NCDEX, proposes to have a broad-based equity structure, with participation from stakeholders, including State electricity boards.

The other contender in the fray for setting up another nationwide exchange, a Financial Technologies (India) Ltd-MCX (Multi Commodity Exchange)-led venture, submitted its proposal before the regulator earlier last week.

The venture, named Indian Energy Exchange Ltd (IEEL), claims in its proposal that it has put in place the requisite software platform and hopes to get the exchange up and running in six months’ time once all clearances are in place.

The CERC had earlier said that at least one power exchange would get operational by the year-end. A power exchange would basically function on the lines of a commodity exchange and provide a platform for buyers, sellers and traders of electricity to enter into spot and forward contracts.

Trading Volumes

It would offer a market-based institution for providing price-discovery and price risk management to the generators, distribution licensees, traders, consumers and other players in the sector.

Currently, inter-regional power transfer capacity of slightly over 6,000 MW is available in the country, which is expected to increase to about 9,500 MW in the coming years, according to Government estimates. Short-term power trading or trading on daily requirement accounts for about 15 per cent of the total power trading volumes on an average. The CERC had, in February this year, issued guidelines for grant of permission to operators wanting to set up and operate a power exchange in the country.

Without stipulating a cap on the number of exchanges that can be set up by prospective players, the regulator had broadly prescribed the need for a clear ring-fencing between ownership, management and participation in the proposed power exchange and the requirement for an efficient financial settlement and guarantee system.