Central Electricity Regulatory Commission (CERC) has directed Indian Energy Exchange (IEX) to approach Central Electricity Authority (CEA) in the matter of IEX seeking permission to allow cross-trading on the exchange.
In its order dated December 6, 2021 (No.596/2021), CERC has advised IEX to hold consultation with CEA, which is the designated authority on the subject matter, and then approach CERC with a fresh petition.
Here is a chronological summary of developments:
- In its petition to CERC, IEX sought approval for the introduction of cross-border contracts on the IEX platform. IEX proposed to create separate windows within the Term Ahead Market (TAM) for allowing cross border trade of electricity. IEX submitted to the CERC that such cross-border contracts would be similar to the existing term ahead market (TAM) contracts. However, the scheduling of such contracts will be made to the National Load Dispatch Centre (NLDC) by IEX, as per the provisions of the Central Electricity Regulatory Commission (Cross Border Trade of Electricity) Regulations, 2019.
- On this point, CERC observed that participation in the cross border contracts as proposed to be introduced by IEX entirely depended upon the approval to be granted by CEA (the designated authority) to prospective Indian sellers and foreign buyers.
- In the virtual hearing of the case held on November 30, 2021, CERC asked IEX whether CEA has already given such permission to any entity for participating in the TAM or whether CEA was intending to give such permission in the near future. To this point, IEX replied in the negative. IEX however maintained that certain entities have shown interest and once the market is developed, it may trigger demand for cross border trade in electricity in the TAM.
- CERC in its order therefore directed IEX to approach CEA for consultation on the subject matter and approach CERC thereafter with a fresh petition.
Also read: IEX To Resume REC Trading After 16-Month Hiatus
DAM Regulations
It may be mentioned that as per extant regulations, for Indian entities trading in the day ahead market (DAM) on power exchanges, no prior permission is required from the designated authority (DA), which is CEA. However, Indian sellers willing to export power to a neighbouring country through Term Ahead Market shall require approval from DA to participate in the market. Similarly, the entities of neighbouring countries can participate on power exchanges through trading licensee situated in India, after obtaining the necessary approval from DA.
