Date:22/07/2006 URL: http://www.thehindubusinessline.com/2006/07/22/stories/2006072202870300.htm

Back CERC issues consultation paper on power exchange

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To help streamlining power trading, standardise electricity as a tradable product

Guidelines
Should be designed for dispensing short-term power available for trading through competitive bidding.
To invite simultaneous anonymous bids from buyers and sellers on day-ahead hourly basis.
One exchange could be conceived at the national level.

New Delhi , July 21

The Central Electricity Regulatory Commission (CERC) on Thursday released a consultation paper to develop a power exchange for electricity trading in the country.

The exchange, a common platform for power trading, would help in streamlining power trading, standardise electricity as a tradable product, provide a payment security mechanism to buyers and sellers and increase business confidence in the power sector, the CERC said in a release.

The Staff Paper on Power Exchange addresses a wide range of issues related to development of an electricity market in India, it said. Similar to stock and commodity bourses, a power exchange would act as a platform for buying, selling and trading of electricity.

Board mooted

The CERC said such an exchange could be run by an independent board with five directors including a chairperson, under regulatory oversight. Participation in the exchange may be voluntary for the present, the regulator said.

The exchange should be designed for dispensing short-term power available for trading through competitive bidding by inviting simultaneous anonymous bids from buyers as well as sellers on day-ahead hourly basis.

The regulator has suggested that as the amount of tradable power is low at present, a power exchange on regional basis may not be viable and only one exchange could be conceived at the national level, the paper said.

With electricity supply far short of demand and tradeable quantity negligible at just two per cent of the total generation, the regulator said the right time to launch a power exchange should to be debated.

The CERC has suggested that instead of waiting till aggregate demand and supply streams are more or less balanced on all India basis, it may be prudent to launch such an exchange in the near future to send the right signal to investors and consumers about transparent market development.