India promotes transparency in Cross Border Trade of Electricity

India promotes transparency in Cross Border Trade of Electricity

Dec. 12, 2016, 5:45 p.m. Published in Magazine Issue: Vol 10. No. 8,December. 02,, 2016 Mangsir 17,2073)

India issues Cross Border Trade of Electricity Guidelines to pursue the trade with SAARC countries. Presently, India has Cross Border Trade of Electricity with Bangladesh, Bhutan, Nepal and Myanmar.  The trade of electricity has mostly been taking place under Government-to-Government negotiations, which inherently take longer time.  In order to facilitate and promote cross border trade of electricity with greater transparency, consistency and predictability in regulatory approaches, India has pro-actively issued the new guidelines on cross border trade of electricity.

According to a press release issued by Indian Embassy, the guidelines specify the institutional framework and required processes to facilitate power trade.  It also broadly specifies about the participating entities, and provisions have been made such that maximum entities get opportunity to trade electricity with India.  Under ease of doing business, India has simplified the process for all the Government owned companies of the neighboring countries.  But, this does not debar other companies / entities from participating in the trade of electricity.  The guidelines also facilitate determination of tariff for such trade of electricity.

Even though the power exchanges are not operational in the neighboring countries and they don’t have significant experience of trading power through the power exchanges, India has taken lead in promoting trade of electricity by neighboring countries through Indian Power Exchanges.  The modalities and products of such power trade through the exchanges will be as per the extant power market regulations.  The guidelines also talk about the transmission system, scheduling and accounting, grid operation safety and security, etc.

The present guidelines give the broad contours on cross border trade of electricity.  The detail process and procedure will be made more transparency through the regulations, which will be issued shortly by Central Electricity Regulatory Commission (CERC).

With the issuance of this guideline, it is expected that the hydro power potential of the neighboring countries which has not been harnessed over the years will be developed on fast track as the stakeholders including financers would be having transparency in the utilization of such power projects. 

The guidelines are based broadly on the experience gained over the years.  Presently, the trade of electricity has increased many folds with our neighboring countries.  Particularly with Bangladesh, India has been able to supply 6 Billion Unit (BU) of power within a span of 3 years from the date of signing of the Memorandum of Understanding (MoU) and is further considering enhancing the supply of electricity.  Around 2 BU of electricity has been supplied to Nepal during last 2 year.  Many more cross border inter-connections have been planned and would be implemented in shortest possible time with a view to enhancing power trade.


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