Daily spark missing from India’s international power trade

NEW DELHI: India has emerged as a hub of south Asian transmission network but daily spark of day-ahead trading is missing in its cross-border power trade due to regulatory hurdles

Indian power exchanges have petitioned the Central Electricity Regulatory Commission to open the doors to spot buyers from neighboring countries as millions of units go waste at home due to busy transmission lines or poor appetite of financially stressed state utilities.

Tata Power has petitioned the regulator for permission to import power from its 126 mw Dagachhu hydel project in Bhutan through the Indian exchanges for sale in India till bilateral contracts are signed. Industry sources say there are consumers in Nepal and Bangladesh, countries with large unmet demand, willing to buy power from the Indian spot market.

But for the regulator, it is a grey area as the existing policy does not reflect the changing reality of expanding interlinks with neighboring countries and power projects coming up in Bhutan and Bangladesh with Indian private investments. The government is examining the new reality and at least Tata Power’s case is awaiting the foreign ministry’s approval.

But for the regulator, it is a grey area as the existing policy does not reflect the changing reality of expanding interlinks with neighboring countries and power projects coming up in Bhutan and Bangladesh with Indian private investments. The government is examining the new reality and at least Tata Power’s case is awaiting the foreign ministry’s approval.

The Dagachhu hydel project is the first of several private power projects being built on foreign soil for supplying to local market, India or a third country. Reliance Power and Adani group recently inked deal for large power plants in Bangladesh.

The petitions by power exchanges point out that the ground is ready for cross-border trading because of financial and regulatory similarities in electricity markets of the interlinked countries. Initially, the volumes are expected to be small due to limited interlink capacity. But with plans for their expansion, a full-on regional power market is just round the corner, much in line with the scenario in Europe.

India, with a rapidly expanding generation capacity – estimated at 2.72 gw (giga watt) at last count – and surrounded by deficit countries, can be in the driver’s seat only if it moves fast.