In Dec.2018, the Ministry of Power (MoP) issued new guidelines for the import and export of electricity and power trading with neighboring countries, replacing its previous guidelines issued in 2016.
After the guidelines the Central Electricity Regulatory Commission (CERC) issued new regulations for the cross-border trade of electricity in March 2019.
According to the regulations, “any electricity trading licensee of India can trade in the Indian power exchanges on behalf of any participating entity from other countries after obtaining approval from the designated authority.”
Under the new guidelines, short-term power purchase agreements through exchanges will also be allowed for cross-border transactions and will not be restricted to the term-ahead market.
The government has also done away with the preferential treatment to projects with government investments of respective countries. The newer framework makes it easier for private companies to trade with neighboring countries.
The cross-border trade in power could be a tremendous opportunity for Indian solar developers and implementing agencies. There will be no dearth of off-takers for cheaper solar energy based on the current solar tariffs in India. The government is recognizing this and working toward removing restrictive policies.
The Central Electricity Authority (CEA) recently published in its National Electricity Plan (NEP) a blueprint to develop the transmission systems in the country.
In the plan, cross border power exchanges with neighboring countries considered for the plan period (2017-22) include about 4,500 MW to be imported from Bhutan. The plan also covers 1,500 MW and 950 MW of power exports to Bangladesh and Nepal respectively.
The greater international grid connectivity will enhance the grid’s ability to better manage the variability of renewable energy and will also facilitate lower cost management of peak demand.
Reference- Mercom India, Economic Times