Trigger is the power ministry’s directive to put in place mechanism for open access
The power ministry’s fresh communication reiterating its directives to the Central Electricity Regulatory Commission to put in place a framework to operationalise open access for the 1-Mw-and-above consumers has revived debate on the establishment of national bulk market (NBM). According to the provisions of Electricity Act, 2003, NBM is a voluntary pool of 1-Mw-and-above consumers, wherein power is supplied through the day-ahead- market (DAM).
NBM would route power from the distribution companies and generators, after they declare the short-term un-required power. This power would be brought to the power exchange and offered to these consumers through DAM.
Jayant Deo, MD and CEO, Indian Energy Exchange, told Business Standard, “Our estimate of bulk consumers is around 15,000. The majority or 99.99 per cent are retail consumers and only 0.01 per cent are bulk consumers. An average 1 Mw consumer operates a business with an annual turnover of Rs 25-30 crore, while he spends a few crores annually on power bills. Hence, it is fair to say bulk consumers are capable of managing market-based pricing for all their inputs, including energy.”
Deo, who has made a representation to the power ministry in this regard, said NBM would ensure stability and supply in the system.
However, Ajoy Mehta, managing director, Maharashtra State Electricity Distribution Company said, “Fundamentals of operationalising open access have still not been structured. Hence, to talk about the methodology for an open access regime either through power exchange or bulk market or any other market mechanism is very pre-mature.”
On the other hand, RV Shahi, former union power secretary said the establishment of NBM was mandated under the Electricity Act, 2009. However, it has been delayed. “Therefore, the provision exists but the process has to be catalysed. This role can best be played by power generators and trading agencies to start with and subsequently even by power exchanges. NBM will create the real competitive market in the power sector. However, the process will have to be gradual and will evolve over a period of time,” he says.
Lanco Power’s senior executive, who did not want to be identified, however, emphasised the need for a proper load forecasting to make the national bulk market operational.
