Power exchanges, CERC to address outages in Maharashtra

Power exchanges have join hands with the Central Electricity Regulatory Commission (CERC) to address power outages in the state.

The exchanges have renewed their efforts to award membership to small players — open access buyers and sellers — to ensure that the rising demand in the summer months are met adequately.

The move, industry insiders said, would improve liquidity, reduce quantity and price risk besides ensuring availability of power. Open access consumers may be individual entrepreneurs, co-operatives and captive power plants or whoever generates or uses power for business.

“While power generating and distributing bodies of various states are our members, their operations are on a large scale and therefore the risks are high. With such small consumers, co-ordination, margin issue and thus operational risk in business is less.”

With such open access customers joining the exchange, price of power has reduced gradually from Rs 6-7 per unit to Rs 3 per unit. States like Maharashtra can meet more power demand without additional power generation.

Power Exchange India Limited (PXIL) has introduced a concept of “aggregator member” who will act as aggregator of small open access consumers.

While the annual membership fee for such aggregator member is just Rs 1 lakh, their job will be to co-ordinate and aggregate the business operations of thousands of single individual entrepreneurs with a captive power plant or a cooperative or firm on the exchange by making them members.

The volumes on PXIL has gone up from 2,791 megawatt per hour (MwH) to 11,752 (MwH) over a quarter.

Similarly, India Energy Exchange has reduced the minimum eligibility criteria for open access customers for trading on exchanges to below one megawatt capacity from the current cap of 1MW albeit within the purview of conditions on grid connectivity, but only for the state of Uttarakhand.

This means even a customer with power generation below one megawatt with no objection certificate from the concerned state authority is eligible for trading.

Secondly, exchanges are working out ways to develop term market by adding new products. Besides, weekly contracts, which are already available on the exchanges, long-term or monthly contracts are also being designed.

However, this is designed in such a way that it does not contravene the jurisdictional issues of futures trading, sources said.

“What we plan is that members can decide on their commitment to sell or buy before hand but the contract will actually be done 11 days ahead so as to avoid tripping into the jurisdictional issue of regulation of futures contracts,” said an official source closely associated with the central advisory committee meetings of CERC.