A Snapshot of Power Trading in India

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Power Trading has come a long way since trading has been recognized as a distinct entity in Electricity Act, 2003.

What is Power Trading?
Basically, Power trading is an activity of buying and selling of power at Power Exchanges, which are approved by Central Electricity Regulatory Commission (CERC)and moreover standardized Products are offered to buy and sell power. Thus Power is traded like a commodity at Power Exchanges like IEX (India Energy Exchange), PXIL(Power Exchange India Ltd.) Likewise shares trading are done on SENSEX etc & commodity trading at NCDEX etc.

What is Open Access?
Open Access allows large users of power having a connected load of 1 Megawatt (1MW) to buy cheaper power from the market.

Acc. To EA 2003 Sec 2(47) : “open access” means the non-discriminatory provision for the use of transmission lines or distribution system or associated facilities with such lines or system by any licensee or consumer or a person engaged in generation in accordance with the regulations specified by the Appropriate Commission;

Types of Open Access:
• Inter State Open Access: When buying and selling entity belong to different states.
• Intra State Open Access : When buying and selling entity belong to same state.
Types of Power Trading?

Broadly Power trading can be sub classified on the basis of duration of contracts and energy trading platform.

Types of Exchange
Types of Exchange

What are the statutory requirements for Power Trading?
Some of statutory requirements notified by CERC are:
• Demand should be atleast 1000KVAH
• Connected to atleast 11KV line
• Should have 0.2S class CT/PT
• Should have 0.2S class ABT meter
• Consent from DISCOMs/SLDC to trade power.

List of Power Trading Licensee?

Acc. to CERC’s latest MMC report(08/11/2013),there are 65 Power trading licensees in power market, some of active ones are:
• Tata Power Trading Company Ltd.
• Jaypee Group
• Adani Enterprises Ltd.
• PTC India Ltd.
• Reliance Energy Trading Ltd.
• JSW Power Trading Corp.
• NETS (Lanco)
• MMTC Ltd.
• DLF Power Ltd.
• Jindal Steel and power Ltd.
• GMR Trading Ltd.

What are various Bid areas on Energy Exchange?

Bid Areas

What is HHI & its relevance in power market?

HHI stands for Herfindahl-Hirschman Index
A commonly accepted measure of market concentration. It is calculated by squaring the market share of each firm competing in a market, and then summing the resulting numbers. The HHI number can range from close to zero to 10,000.In case of p
For the year 2012-13, HHI was 0.1437

Some Facts about Power Trading (Ref from CERC’s MMC Report)
• In 2011-12, Weighted Average price of electricity traded through Power Exchanges Rs 3.67 / unit and through trading licensees Rs 4.33 /unit.
• During the year 2012-13, 89% of the volume of electricity in IEX and 94% of the volume of electricity in PXIL was transacted at less than 6/kWh. 70% of the volume in IEX and 73% of the volume in PXIL was transacted at less than 4/kWh
• During 2012-13, only 179 million units of electricity was exclusively bought during peak hours under bilateral transactions from traders (exclusive of banking). This was 0.79% of the total electricity bought under bilateral transaction from traders (excluding banking). A major part of this, 93.24%, was bought on round the clock (RTC) basis, followed by 5.97% exclusively bought in periods other than peak periods. The per unit price of electricity procured on round the clock (RTC) basis was the cheapest (4.29/kWh), followed by electricity exclusively procured during non-peak hours (4.66/kWh) and electricity exclusively procured during peak hours (4.97/kWh).

Trend of Electricity


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