Real-time power trade to help India’s regional electricity market push
- A power exchange functions on the lines of a commodity trading platform, allowing buying and selling of electricity
- The market, which includes Myanmar, Sri Lanka, Nepal, Bhutan and Bangladesh, could aid regional peace and improve use of generation assets
NEW DELHI: Besides aiding the financially stressed distribution companies (discoms) procure electricity at competitive rates, low auction prices in a real-time market (RTM) to trade power may help India create a common pool for neighbouring countries.
An RTM platform, with 48 auction sessions of 15 minutes each in a day, pushes trade closer to the real time. This in turn will help get more green energy such as wind and solar on the national grid, usher in competition and support grid balancing.
It assumes importance as India has 34.6 gigawatts (GW) of solar power and 38GW of wind power, and runs the world’s largest clean energy programme. The RTM is being offered by Indian Energy Exchange and Power Exchange India Ltd.
A power exchange functions on the lines of a commodity trading platform, allowing the purchase and sales of electricity. Till now it was only through spot contracts for the same day, next day, and on a weekly basis.
India has already notified cross-border trading regulations. The proposed market, which will include Myanmar, Sri Lanka, Nepal, Bhutan and Bangladesh, could aid regional peace and improve utilisation of generation assets—including the stranded assets in India—and efficient price discovery.
Speaking at Mint’s annual energy conclave in March this year, power and new and renewable energy minister Raj Kumar Singh had said it is his aim to have a regional power grid that includes Myanmar, Bhutan, Bangladesh, Nepal and Sri Lanka.
“And ultimately, the vision which I see is that we have one regional power market,” Singh said.
The plan has gained traction with India moving ahead with threading-the-needle for an ambitious global electricity grid and calling for bids last week to roll-out the “One Sun One World One Grid” (OSOWOG) plan.
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. While the second phase deals with the MESASEA grid getting interconnected with the African power pools; the third and final phase is about global interconnection.
Cross-border energy trade is a key part of Prime Minister Narendra Modi’s South Asia-focused neighbourhood-first policy, with the electricity link attempting to negate the growing influence of strategic rival China in the region.
While India has been procuring hydropower from Bhutan, it is also supplying electricity to Bangladesh and Nepal. The plans now include the option of an overhead electricity link with Sri Lanka. India’s energy diplomacy initiatives range from cross-border electricity trade to supplying petroleum products and setting up liquefied natural gas terminals.
The RTM platforms come at a of time discoms increasingly being averse to entering into long-term power purchase agreements.
Singh will electronically launch the real time market today.
Mint reported on 1 June about nearly 20 billion units of power will be traded every year on the RTM, making up for errors in demand estimates and unpredictable generation patterns, and building a more reliant electricity network in the country.