Spot trading of power may start soon

A wholesale market for electricity is taking shape in the country, with at least three new power exchanges being planned by different players.

Power Trading Corporation (PTC) is awaiting a response to its proposal for sharing experiences in power trading with the Nordic Power Exchange, which runs the world's oldest and one of the most successful power exchanges, Nord Pool.

According to sources, once the proposal is firmed up, PTC is expected to approach the government for clearances and could then establish a power exchange with assistance from Nord Pool.

Simultaneously, the Goa government and Global Energy Ltd, a new entrant in the power trading scene, have started work on setting up a new power exchange.

State-owned National Thermal Power Corporation (NTPC) is also firming up plans to set up a power exchange. NTPC has forayed into power trading through its subsidiary, the NTPC Vidyut Vyapar Ltd.

The exchange mechanism envisaged will be in the nature of a spot market for power and provide a platform for buyers and sellers of electricity.

Several utilities like the Damodar Valley Corporation, NEEPCO and states like Goa and Sikkim are selling their surplus power to other states through traders like PTC and Global Energy. "The idea of an exchange is to enable these states to bypass the traders and sell power straight to a buyer," a government official said.

An exchange will help the power producers retain higher trading margins.

Sellers of power can quote their price for delivering electricity to a particular nodal point, which will then be intimated to interested parties. Buyers can then strike a deal for purchasing a certain quantity of power that can be evacuated to its point of consumption.

As the Electricity Act, 2003, permits open access in transmission, the buyer can wheel the power to its location using the existing transmission infrastructure of PowerGrid Corporation or the state electricity boards.