There is good news for the power-starved consumers across the country, especially when energy shortages are increasing by the day. The Central Electricity Regulatory Commission (CERC), in a major order on Tuesday, has allowed the Indian Energy Exchange (IEX) to enter into week ahead and month ahead contracts (which means term ahead contracts). IEX, which has been promoted by the Financial technologies, had resumed itsoperations from June 26.
Till now, the Indian Energy Exchange was allowed to trade in power for a day ahead. However, CERC has instructed the IEX and the National Load Despatch Centre (NLDC) to mutually co-ordinate between themselves for the introducing term ahead contracts. Further, in case open access procedure has to be amended, then the same may also be suggested. Both the parties agreed to return to CERC soon.
IEX argued that that there are significant advantages of allowing power exchanges to facilitate week ahead/month ahead and other contacts for the willing seller and willing purchaser. A licensed trader usually undertakes the purchase and sale of electricity for a maximum period of one year, from a minimum of a few hours.
At present, there is no organised mechanism through which one can sell electricity on a weekly basis or monthly basis. It is very difficult for a person having surplus electricity or a person who can organise his affairs to release surplus electricity for a week or month to find a purchaser. The power exchange can offer such a facility. It is therefore of utmost importance that power exchange is developed to arrange for other contracts like week ahead or month ahead contracts. Allowing other contracts like week ahead or month ahead contracts for power exchange would facilitate more competition with more number of people participating in the sale and purchase of electricity.
CERC chairman, Pramod Deo, told FE, ?IEX has been asked to coordinate with the NLDC before the commencement of term ahead contracts as the priority will be given based on the prevailing conditions of transmission corridor.?
Jayant Deo, MD & CEO said ?The true market development will take place when contracts with longer time horizons will come to the transparent and neutral platform of IEX.? IEX has received support from more than 35 entities from power ector who have felt the need for securing power requirement and sale of energy over a longer period.
