Indian Energy Exchange (IEX) has announced commencement of the Cross Border Electricity Trade (CBET) on its platform.
This is a first-of-its kind initiative for energy exchanges to expand their power markets beyond India to the South Asia region towards building an integrated South Asian regional power market.
Guidelines
Following the notification of CBET Regulations by CERC in 2019 and the recent notification of CBET Rules in March 2021 by Central Electricity Authority (CEA), NTPC Vidyut Vyapar Nigam Ltd (NVVN), a subsidiary of NTPC, has secured approval from the CEA, for Nepal’s participation in the day-ahead market on IEX.
The quantum of trade
Currently, cross border trade with neighboring countries for India stands at about 18 BU conducted through the medium to long term bilateral contracts. As per the CEA and CERC, as on date, India imports 8.7 BU from Bhutan and exports 2.37 BU and 7 BU to Nepal and Bangladesh, respectively. The power trade with these countries is expected to increase to about 40 BU by FY22 and 70 BU to FY 27 according to a study by IRADe. (Note: 1 BU = 1 billion units = 1 billion kwh = 1 TWh)
Unique opportunity
According to S.N. Goel, Chairman & Managing Director, IEX, “We are immensely delighted to welcome Nepal as the first country to commence the cross-border electricity trade in our day-ahead electricity market. With a large installed power generation capacity base of 382 GW and peak demand of about 185 GW, India is a power surplus country. We have a unique opportunity to lead the regional power market development and make efforts towards enhancing the energy access and security amongst the neighboring nations in the region.”
Bhutan and Myanmar, in future
Speaking on the occasion, Mohit Bhargava, CEO, NVVN, mentioned “Nepal is the first country to avail the benefit of buying day ahead power from power exchange through NVVN. This is a new beginning in the South Asian region. We also aspire to work closely with Bhutan and Myanmar in the future.
Also read: IEX Records All-Time High Trading Volume In March 2021 And FY21
Other agencies
IEX is working closely with PTC, NVVN, and all other designated nodal agencies for cross border electricity Trade to facilitate inter-country power trade through the exchange market, the release added.
Featured photograph shows a hydropower plant in Nepal. Hydropower is the country’s largest source of electricity. The hilly nation exports surplus electricity to India during the monsoons when hydropower generation peaks and imports from India when hydropower generation falls.
