--By Pankaj Goel
I ndian power market is a vibrant and growing. Its growth is stable. It is completely voluntary market with multiple choice and options. Electricity trading is allowed by Electricity Act- 2003 and 41 trading licenses have been issued till March 2012. Top 5 trading licensees have 80 per cent market share.
PTC India Ltd (PTC), the leading provider of power trading solutions in India, was established in the year 1999 as a Government of India initiated Public-Private Partnership. Its primary focus is to develop a commercially vibrant power market in the country.
PTC is the pioneer in implementing the power trading concept in India and has successfully demonstrated its efficacy in optimally utilizing the existing infrastructure within the country to the benefit of all.
Electricity trading has led to optimization of existing energy resources, encouraged commercial outlook in the sector and cross-border exchange of power. This has also catalyzed investment into the power sector, mainly from the private sector
It is worthwhile mentioning here that development of power trading has created market structure facilitating private investment in the sector.
Power markets world-wide seek to maximize competition in generation, are open to all market participants, and compete on price, not cost.
PTC pioneered the concept of power trading in India and it has continued to maintain the top position since inception. That concept was developed to promote private investment in power sector.
Long term trading contracts reduce volatility in trading volumes. It helps to enter into long term PPAs with new Independent Power Producers (IPPs) and invest into power projects to increase the trading volume.
It was only after the success of PTC’s model, that the Electricity Act 2003 recognized power trading as a distinct licensed activity. Short term power market in India has witnessed rapid growth. It not only grew in volume terms but also as percentage of total electricity generation from 3% in 2008 to 11 per cent in fiscal year 2013.
PTC created a power market which is the first of its kind in South Asia. It has been facilitating a transition from cost-based returns to market based returns. PTC has contributed to create value for power – market based price discovery of power. It helps in optimal utilization of generation capacity and increased generating capacity addition. Short-term and long-term trading opportunities thus created have led to development of Power Exchange and encouraged renewable energy market.
It has introduced innovative products suiting customers’ needs. Similarly, single window service has come into effect to take care of all intermediate requirements like transmission agreements, metering, accounting etc. That engages regulators at Centre/State level towards development of power market.
There is possibility of cross-border trade with Nepal. India-Nepal power exchange is at a moderate level that stands at around 100-150 MW. Out of total power supplied to Nepal, PTC supplies 50-70 MUs annually to meet Nepal’s emergent load during winter months.
Government of Nepal has prioritized hydro power development and encourages private investment. Nepal has enormous 42,000 MW hydro potential but only 2 percent has been exploited so far. Existing India-Nepal transmission links should be strengthened for long-term power trade between two countries.
(The article is based on Goel’s presentation made at The Power Summit 2013 organized by IPPAN. Writer is Vice President, Marketing at PTC India)
