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| Transmission woes take fuse out of traded power |
| Sudheer Pal Singh / New Delhi Aug 25, 2009, 00:35 IST |
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Continued pressure on volumes could choke the growth of power market, feel experts
Inadequate power transmission capacity, one of the worst fears of operators of the Indian power exchanges, has finally come alive. While volumes of electricity traded at the electronic platform have jumped multifold in the past one year, the absence of a comparable increase in the transmission capacity to support the evacuation of such huge volumes is leading to their curtailment.
While this could further increase the gap in the demand and supply of power especially for shortage prone areas like the northern region, experts believe that the continued pressure on market volumes could choke the growth of the power market in the country.
“More than 20 per cent of the volume of power scheduled at the exchange every day is getting curtailed (not getting evacuated) due to lack of transfer capacity. While bids are placed for over 20 million units of power daily, anything above 14 million units is unable to flow,” said a senior official from the Indian Energy Exchange (IEX) - India’s first power exchange promoted by the Financial Technologies India ltd (FTIL) and PTC India.
The remaining 6 MUs of curtailed power translates to a daily revenue loss of over Rs 4 crore for the Indian power market.
In order to evacuate the 20 MUs of power transacted at the exchange, IEX requires a transmission capacity of up to 1,000 Mw on a daily basis. As against this requirement, a grid capacity of only 400 Mw becomes available. “Today itself we required 800 Mw capacity in the day time, but we could get only 400 Mw,” the IEX official said.
The lack of required transmission capacity is acting as a stumbling block for the growth of the nascent power market in the country. The IEX, for instance, had targeted a daily trading volume of over 24 million units as an average for the current year, but it has not been able to achieve this growth so far, owing to the transmission constraints.
The other functional power exchange, the National Stock Exchange promoted PXIL has also expressed a similar grief. “I agree that transmission constraints are impacting volumes of power exchanges,” said Rupa Devi Singh, MD and CEO of PXIL.
Power is traded at the exchange by first discovering a market price by inviting bids from interested buyers and sellers in the bid-call period. Once the price is discovered, the exchange then notifies the national and regional load dispatch centers to allocate the required transmission corridors.
“The load dispatch centers do not indicate the available capacity to us, saying that the same is given on their websites. The data on their websites is however not updated,” the IEX official said.
Apart from the two full-time power exchanges IEX and PXIL, power, being a commodity, is also traded at the Multi Commodity Exchange (MCX). In addition, the electricity regulator CERC has recently approved National Power Exchange Ltd (NPEX) to be set up by the joint venture of NTPC, NHPC, PFC and India’s largest information technology firm TCS.
The IEX, which started functioning in June last year, has so far traded over 4,300 million units of power with an over Rs 3,400 crore trade value. IEX alone accounts for over 90 per cent of the power currently traded at the exchanges in India. PXIL, which started operation in October last year, has so far traded over 300 million units of power.
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