Cross border electricity trade through power exchange begins
3 min read 19 Apr 2021, 03:59 PM ISTIndian Energy Exchange has stated that this is a first-of-its kind initiative for exchanges to expand their power markets beyond India to South Asia towards building an integrated South Asian regional power market
PremiumNEW DELHI : New Delhi: In a boost to India’s efforts to create a regional power grid, cross border electricity trade has started on the Indian Energy Exchange (IEX).
IEX on Monday announced the “commencement of the Cross Border Electricity Trade (CBET)" on its platform. "This is a first-of-its kind initiative for the exchanges to expand their power markets beyond India to the South Asia region towards building an integrated South Asian regional power market," it said.
This comes against the backdrop of India already notifying cross-border trading regulations. While India has been procuring hydropower from Bhutan, it is also supplying electricity to Bangladesh and Nepal. The plan now is to include the option of building an overhead electricity link with Sri Lanka. India is trying to create a common pool for neighbouring countries.
“Nepal, Bangladesh and Bhutan are to be among the first beneficiaries, owing to the connectivity with the Indian electricity grid," reads a statement issued by IEX on Monday.
Speaking at Mint’s annual energy conclave in March last year, power and new and renewable energy minister Raj Kumar Singh had said it was his aim to have a regional power grid that included Myanmar, Bhutan, Bangladesh, Nepal and Sri Lanka. The proposed market, which will include these countries, could aid regional peace and improve utilization of generation assets—including the stranded assets in India—and efficient price discovery.
“In a remarkable development following the notification of CBET regulations by CERC (the Central Electricity Regulatory Commission) in the year 2019 and the recent notification of CBET rules in March 2021 by the Central Electricity Authority (CEA), NVVN (NTPC Vidyut Vyapar Nigam Ltd) has secured approval from the CEA, for Nepal’s participation in the day-ahead market on the Exchange," the statement added.
Cross-border energy trade is a key part of Prime Minister Narendra Modi’s South Asia-focused neighbourhood-first policy. The government has set up a high-level group headed by former Union power secretary Ram Vinay Shahi and tasked it with helping build a South Asia-focused energy security architecture, as reported by Mint earlier.
“Currently, the cross border trade with neighbouring countries for India stands at about 18 BU (billion units) conducted through the medium to long term bilateral contracts. As per the CEA and CERC, as on date, India imports 8.7 BU from Bhutan and exports 2.37 BU and 7 BU to Nepal and Bangladesh, respectively. The power trade with these countries is expected to increase to about 40 BU by FY22 and 70 BU to FY 27 according to a study by IRADe," the statement added.
India is already moving ahead with its ambitious global electricity grid plans to roll out “One Sun, One World, One Grid" (OSOWOG). The global grid plan has been spread across three phases. The first phase deals with the Middle East-South Asia-South-East Asia (MESASEA) interconnection for sharing green energy sources such as solar for meeting electricity needs, including peak demand. The second phase connects MESASEA grid with African power pools; the third and final phase is about global interconnection.
“India is centrally placed in South Asia region and shares boundaries with several countries in the region. Due to its unique location as well as sound electricity infrastructure, we must lead in energy cooperation and development of market in the South Asia, regional transmission infrastructure development as well as facilitate efficient utilization of the energy resources for the cross-border entities. Nepal is the first country to avail the benefit of buying day ahead power from power exchange through NVVN," said Mohit Bhargava, chief executive officer, NVVN and executive director, responsible for renewable energy at state run NTPC Ltd in the statement.
“We also aspire to work closely with Bhutan and Myanmar in future," Bhargava added.
