Power bazaar taking shape

The Central Electricity Regulatory Commission is drafting a proposal for setting up an exchange where one can buy and sell power, bypassing the middleman.

Generating utilities like the Damodar Valley Corporation and states like Goa and Sikkim sell surplus power to other states through traders like Power Trading Corporation and Global Energy Ltd.

Power trading

Modelled on the power pool mechanism in the US and several European countries, the exchange will be like a spot market for power Quotes to be floated on the exchange, enabling buyers to strike a deal States striking deals in the power exchange can save around 5 paise per unit

"The idea is to enable these states to bypass the traders and sell power directly to buyers," an official said.

Power Trading Corporation has been the sole agency for trading electricity among states since 1999.

Several companies, including Reliance Power, Amalgamated Transpower, Tata Power and the Adani group, have applied for trading licences with the regulator.

The nodal points of the power pool are being planned at the inter-regional grid links. Sellers will be required to quote the prices of delivering power to their nodal point, including the wheeling charges, at any of the several control rooms to be set up.

The seller's quote will be floated on the exchange, and the buyer can then strike a deal for delivering its power requirement to the point of consumption.

Since the Electricity Act, 2003, permits open access in transmission, power can be wheeled to the point of consumption through Powergrid Corporation or the state electricity boards.

"Since the Northeast and the eastern states have surplus power, the exchange will help them to market it to the north, south and western states. Right now, it is a struggle for the buyer, and the matchmaking is done by the trader," an official said.

In the first phase, the power regulator is likely to ask the regional load despatch centres to provide information on extra power available with them, which can be posted for sale. In the second stage, regions within these centres can be identified as points of drawal.

A set of control rooms could be set up in the metros, or deals could be finalised on the Internet, the official said.

In the UK, a spot market for power enables trading up to 1 hour ahead of its despatch. In the US, various regional grids have a pooling mechanism, whereby participants can strike spot deals.