Neighbouring countries such as Bhutan, Nepal, Myanmar, and Bangladesh can now buy or sell electricity through India's real-time market as the Central Electricity Authority (CEA) has amended India's Cross Border Electricity Trade (CBET) rules.
Until now, the neighbouring countries were allowed to trade only in the day-ahead market (DAM) in the power exchanges. In DAM, the traded electricity is delivered only a day later. The latest move by the Indian government will help these countries to import and export electricity closer to real time with India.
Data from Indian Energy Exchange Ltd (IEX) showed that ever since the CBET rules were notified in 2021, Nepal and Bhutan have traded 4.41 billion units of electricity so far in the Indian power exchange. Myanmar and Bangladesh have not yet started power trade in the bourses.
Bidding process
India has three power exchange platforms which are used by power utilities to procure short-term electricity. Real time market (RTM) is a segment in the power exchanges that enables buyers and sellers to meet their energy requirement closer to real time operation. The market features a new auction session every half an hour with power to be delivered after 4 time blocks or an hour after gate closure of the auction. The price and quantum of electricity trading is determined through a double-sided closed auction bidding process.
"Cross border electricity trading commenced on the Day Ahead Market (DAM) segment of IEX in April, 2021. We have seen good participation by Nepal and Bhutan on both the buy and sell sides, with a cumulative trade of 4.41 BU so far. The countries have benefitted from participating on the exchange market, to meet their deficit and optimise their power procurement costs," said Rohit Bajaj, Executive Director (Business Development, Strategy and Regulatory Affairs), IEX.
He said trading on RTM will provide greater flexibility to cross-border entities for optimally utilising their resources by procuring power close to real-time basis. "This can facilitate other neighbouring countries to start trading on India’s Power Exchanges for achieving better efficiencies in power generation and managing portfolios," Bajaj said.
Power expansion
To be able to trade electricity with neighbouring countries , there has to be transmission lines between the nations. India is now looking at expanding its electricity trade network to include other neighbouring countries such as Sri Lanka and Maldives.
India is also looking beyond the countries it shares its border with for electricity trade. It is planning to connect its power grid with Singapore through undersea cables for export of renewable energy. India has set the target of having 500 gigawatt (GW) of installed renewable electricity capacity by 2030. India is also in talks with Saudi Arabia and the UAE to connect their power grids for trade of renewable energy via Oman.
India's other two power exchanges - Power Exchange India Limited (PXIL) and Hindustan Power Exchange (HPX) - did not comment on the development. IEX is the largest of all three power exchanges with a market share of about 85-90 percent of the total market volume.
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