The Hindu Business Line : Power exchange: NTPC to work out parameters

Power pooling
NTPC studying proposals of consultants, Nord Pool and Crisil.
Nord Pool is the world's only multinational exchange for trading power and is owned by the national grid companies of Norway and Sweden.
A power exchange would function like commodity exchanges and provide a platform for buyers, sellers and traders of electricity to enter into spot and forward contracts.

New Delhi , May 28

NTPC is working out the broad contours of the proposed nationwide Power Exchange, with the consultants to the project - Nord Pool ASA and Crisil - having submitted their final proposals for setting up electricity pooling mechanism in the country.

"We are studying the recommendations and have set up a group to work out key operational parameters for the exchange, including parameters like the governing body structure and modalities of executing transactions," the Chairman and Managing Director, Mr T. Sankaralingam, told Business Line.

NTPC has taken a lead in the initiative to set up a wholesale market for electricity, which is also expected to see participation from trading major PTC India Ltd and Power Grid Corporation of India Ltd. It is also likely that these companies may initially acquire some equity in the project, Government officials said.

Nord Pool, the world's only multinational exchange for trading power and one of the most efficient pooling mechanisms, is owned by the national grid companies of Norway and Sweden.

The exchange, established in 1993, has a market council comprising power traders and industry representatives that acts as the advisory board for all its activities. The council, in turn, reports to Nord Pool's board of directors.

Nord Pool has two distinct groups for the physical trading of electricity and the financial markets. In view of the success of the pooling mechanism in the Scandinavian countries, a broadly similar structure could be considered for India, Government officials involved in the exercise said.

A high-powered task force comprising officials from Power Trading Corporation (PTC), NTPC, Power Grid Corporation of India Ltd (PGCIL), Central Electricity Authority (CEA), and the Ministry of Power had visited the US, Norway, Canada, Australia, and the UK last year to study the power markets in these countries.

A power exchange would basically function on the lines of commodity exchanges and provide a platform for buyers, sellers and traders of electricity to enter into spot and forward contracts.

Currently, inter-regional power transfer capacity of around 6,000 MW is available in the country, which is expected to increase further to about 9,500 MW in the coming few years.

With transmission capacity being put in place for large size inter-State projects, the inter-regional transfer capacity is likely to get further enhanced.

With greater optimisation of capacities and increased competition expected among generation, trading and distribution firms, power tariffs are also expected to come down in the long run, an official said.

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