- Buyers from neighboring countries however will not be able to trade directly on the Indian exchange.
- Foreign traders will have to trade through any of India's electricity trading licensees.
Jul 04, 2020, 07:05 PM IST
new Delhi. Soon buyers and sellers of neighboring countries will be able to trade on the Indian Power Exchange. The government wants to buy and sell electricity with neighboring countries. Rules were set for this last year. Initially, sellers and buyers from Nepal, Bhutan and Bangladesh will be able to trade on the India Energy Exchange (IEX). IEX is India's largest power exchange.
Buyers from neighboring countries however will not be able to trade directly on the Indian exchange. They will have to trade through any of the electricity trading licensees in India. This trading will take place through the bilateral agreement or bidding route of two countries or mutual agreement between institutions. Rohit Bajaj, head of business development at IEX, said the facility was expected to be commissioned in the next few months.
Indian production companies will be able to sell surplus power to neighboring countries
Currently, power trading with neighboring countries is taking place in the Term Ahead Market (TAM) segment. Under this, India exports electricity to Bangladesh. This trending is not happening for short term power purchases through exchanges. Bajaj said that after the cross-border trading started in the short-term market, Indian manufacturing companies would be able to sell their surplus power to buyers from neighboring countries.
The proportion of renewable energy in India's production will increase
Buyers from Nepal and Bangladesh will be able to purchase power from India through exchanges. At the same time, Bhutan will be able to sell India through its Surplus Power Exchange. India will also benefit from this. The proportion of renewable energy in India's production will increase.
Once the infrastructure is built, the exchange will start trading with countries like Myanmar and Sri Lanka.
India's transmission link with Nepal, Bhutan and Bangladesh already exists. Therefore power trading with them through exchange can begin immediately. Trading can also begin with exchanges with countries like Myanmar and Sri Lanka if the necessary infrastructure is ready.
Trading on the exchange may initially demand 300-400 MW of power from neighboring countries
There is already less demand in the electricity market. After the outbreak of the coronavirus epidemic, demand further decreased. With this, the country's electricity companies are exploring additional markets to sell surplus electricity. With the exchange starting trade with neighboring countries, they will get an opportunity to sell some of their surplus power. According to experts, 300-400 megawatts of electricity may come initially in spot trading through the exchange.
India currently sells 1703 MW of power to Bangladesh, Nepal and Myanmar.
Currently, about 3,000 MW of electricity is traded between India, Bhutan, Bangladesh, Nepal, Pakistan, Sri Lanka and Myanmar. India buys 1,200-1,500 MW of electricity from Bhutan every year, while Bangladesh sells 1,200 MW, Nepal 500 MW and Myanmar 3 MW.