An approval for setting up a power exchange by the country’s biggest power generator has been delayed with the CERC asking NTPC Ltd to first form a company for the same.
NEW DELHI: An approval for setting up a power exchange by the country’s biggest power generator has been delayed with the Central Electricity Regulatory Commission asking NTPC Ltd to first form a company for the same. NTPC plans to set up the exchange along with NCDEX.
Official sources said an objection for the proposal was raised during a public hearing. Under the CERC guidelines for power exchanges, permission can be granted to any company registered under the Companies Act exclusively for the purpose. In case of a consortium, it should submit formal agreement among its members that would dwell upon the issues critical for setting up of the exchange.
Besides NCDEX, NTPC plans to rope in PowerGrid Corporation, Power Finance Corporation, National Hydroelectric Power Corporation and Tata Power for the proposed exchange. Sources said a joint venture agreement among the partners has already been finalised. CERC last month approved in-principle a power trading exchange to be set up by Multi Commodity Exchange of India Ltd (MCX) and Financial Technology India Ltd.
Sources said apprehensions were also raised during the hearing about NTPC becoming a generator as well as trader to which CERC said there would be no discrimination. Besides, as far as power being diverted for trading is concerned, the guidelines ensure that no existing power purchase agreements and bilateral contracts would be disturbed.
The MCX-FTIL led exchange, called Indian Energy Exchange Ltd (IEEL), is likely to see participation from PTC India Ltd and Tata Power. FTIL would provide the licensed software to the exchange and MCX the expertise in operation management.
Under the CERC guidelines, the promoters would be required to develop their own model of power exchange. The promoter of the exchange would need to have adequate knowledge of the power sector, the electricity grid code, open access issue, availability-based tariff, unscheduled interchange mechanism, scheduling dispatch and energy accounting procedure.
The power exchanges would enable participants to trade electricity the subsequent day through standard hourly contracts and block contracts. The transaction would happen through injection or drawing power from the grid at a given hour at a market price.
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