The Central Electricity Regulatory Commission (CERC) on Monday cleared the application of the state-run power producer SJVN for grant of the Category I licence for inter-state trading in electricity in the country.

“On consideration of the materials on record, we are satisfied that the Applicant company (SJVN) meets the requirements of the Act and the Trading Licence Regulations for grant of inter-State trading licence for Category ‘I’. Accordingly, we direct that SJVNL be issued a Category ‘I’ licence for inter-State trading in electricity in whole of India,” CERC said in its January 10th order.

If the licensee fails to start the trading in power within one year from the date this licence is granted then the licence can be revoked, the order added.

According to the trading licence regulations, a entity or person applying for a Category `I` trading licence should have net worth of ₹50 crore and should have maintained minimum current ratio and liquidity ratio of 1:1, as on date of audited balance sheet accompanying the application.

SJVN portfolio

SJVN has a portfolio of more than 16,000 megawatt (MW), out of which 2,016.5 MW is under operation and the rest under various stages of development. It has a footprint in nine States and two neighbouring countries — Nepal & Bhutan. The company clocked its highest ever power generation of 1,480 million units (MU) in Q3 FY22. So far in FY22, the company generated 8,321 MU of power.

As per data on short term transactions for July 2021, India’s total power generation, excluding renewable and captive power plants, stood at 1,15,654.66 million units (MU). Of this, 14.72 per cent was transacted through short-term, comprising of 7.67 per cent through bilateral (traders and term-ahead contracts on power exchanges and directly between distribution companies), followed by 5.05 per cent through Day Ahead Market (DAM) and Real Time Market (RTM) of power exchanges and 2 per cent through Deviation Settlement Mechanism (DSM).

According to CERC, of the total electricity procured in India in 2019-20, the short-term power market comprised 10 per cent. The balance 90 per cent of generation was procured mainly by distribution companies through long-term contracts and short-term intra-state transactions.