The Hindu Business Line : Power exchange: Task force on global tour to select ideal model

As a first step towards having an efficient power exchange in the country, a high-powered Task Force comprising officials from Power Trading Corporation (PTC), National Thermal Power Corporation (NTPC), Power Grid Corporation of India Ltd (PGCIL), Central Electricity Authority (CEA) and the Ministry of Power are away on a visit to the US, Norway, Canada, Australia and the UK to study the power markets in these countries and zero in on the ideal model for India.

NTPC, PTC and PGCIL have already decided to jointly work for establishing the country's first power exchange and the three companies may also initially acquire some equity in the project.

"The inputs from the visit to these advanced electricity markets, all of which have a successful pooling mechanism in place, would be used for benchmarking the proposed power exchange here," a Government official said.

The companies plan to approach the Central Electricity Regulatory Commission for getting permission to set up an exchange subsequently, officials said.

NTPC has already appointed Nord Pool and Crisil as consultants to look into various aspects of setting up the exchange.

A power exchange would basically function on the lines of commodity exchanges like NCDEX or MCX and will provide a platform for buyers, sellers and traders of electricity to enter into contracts. Nord Pool runs the world's oldest and one of the most efficient exchanges across the four Scandinavian countries.

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.

"Substantial opportunities therefore exist to improve the economic efficiency and security of supply through trading of power. A mechanism such as an exchange would greatly facilitate the trading of surplus power among players," an official involved in the exercise said.

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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