Power Trading Across Indian Borders
India has been active in the exchange of electricity across the South Asian region to promote economic growth and improve the quality of life, to balance the diversity of primary energy sources and differences in seasonal patterns of supply and demand and to develop a dynamic and robust electricity infrastructure for import and export of electricity.
Currently, 3,000 MW of power is traded in the South Asia region among seven countries including India, Bhutan, Bangladesh, Nepal, Pakistan, Sri Lanka and Myanmar. India annually imports around 1,200 MW power from Bhutan, exports 1,200 MW to Bangladesh, exports 450 MW to Nepal and 3 MW to Myanmar.
A new regulatory framework by the Indian Ministry of Power (MoP) has allowed trading through power exchanges, whereas earlier guidelines restricted the cross-border power trade on a bilateral basis.
The new regulations provide for a designated authority appointed by the power ministry for facilitating the trade, a transmission planning agency, a nodal agency for settling charges and a system operator while the Central Transmission Utility (CTU) will grant long term and medium term open access.
The new guidelines allow short-term power purchase agreements through exchanges and permit private companies also to trade with neighboring countries.
The greater international grid connectivity enhances the grid’s ability to better manage the variability of renewable energy and facilitate lower cost management of peak demand, according to Tim Buckley, Director of the Institute for Energy Economics and Financial Analysis. It will boost further growth prospects for Indian renewable energy industry which can support increasing demand of power from its developing neighbouring economies. The government is working toward removing restrictive policies.
India is gradually strengthening its position as an electricity exporting nation. With additional transmission and grid infrastructure and reforms in regulations, the power sector of India shall integrate more renewable energy sources and will bring about significant economic and environmental gains.