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The Central Electricity Regulatory Commission (CERC) is in favour of setting up a regional market for power trade across South Asian countries. This will be an extension of proposals for facilitating cross-border power trade.
The market is expected to connect member countries of South Asian Association for Regional Cooperation (SAARC), a senior CERC official said adding “South-Asian countries, namely Afghanistan, Bangladesh, Bhutan, Nepal, India and Sri Lanka, among others, do not have a Regional Market Platform to trade electricity…”
The electricity sector integration for developing a Regional Market is in an evolutionary stage, the official said. At present, transactions between nations take place through bilateral agreements.
“There are no formal, market-based multilateral trading agreements that are supported with a commercial, regulatory and legal framework, between countries. So there is a large scope for developing a structured regional power market,” he added.
Bilateral agreements
Investments in viable interconnections are favoured under the present structure of power trade through bilateral agreements. “But gradually, transaction standards, balancing mechanisms, and the strengthening of institutional cooperation, short-term transactions through energy exchanges would become increasingly feasible,” the official said.
SAARC countries have already entered into a framework agreement for energy cooperation aimed at promoting energy trade, developing clean energy and energy efficiency, among others. But there has not been much progress in electricity trade under this framework.
On its part, the Centre had issued guidelines on cross border trade of electricity in 2016.
By March 2017, India turned around from a net importer of electricity to net exporter of electricity.
From April 2016 to February 2017, India exported around 5,798 million units to Nepal, Bangladesh and Myanmar which is 213 million units more than the import of around 5,585 million units from Bhutan, according to the Central Electricity Authority.
These guidelines were repealed in 2018 and new regulations for the same have been proposed.
“India has entered into separate bilateral agreements with Bangladesh, Nepal and Bhutan for cross border trade of electricity. India imports around 1450 MW from Bhutan and exports around 500 MW to Bangladesh, and 300 MW to Nepal.
“According to the Centre’s estimates, India would be importing around 17,100 MW from Bhutan, 15,800 MW from Nepal and exporting around 2,000 MW to Bangladesh, and 1,000 MW to Sri Lanka…This can be further boosted if there is a uniform framework for undertaking cross border trading of electricity,” the official said.
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