TCS in power exchange alliance

Written by Sanjay Jog | Mumbai, Feb 28 | Updated: Feb 29 2008, 05:19am hrs
IT giant Tata Consultancy Services (TCS) and three power PSUsNTPC, Power Finance Corporation (PFC) and National Hydro-electric Power Corporation (NHPC)have teamed up to set up a power exchange. The companies are in broad agreement for a joint venture, and are thrashing out the details.

Sources told FE: All these promoters are exploring options for the JV formation. It can be equal equity contribution by each or TCS providing technological solutions and also holding a stake in the power exchange. The exchange will transact power for the short-term, long-term and round-the-clock (RTC) initially and later include hourly trades. The power PSUs and TCS are expected to sign the agreement very soon.

This would be the third power exchange in the country. Already, the MCX-promoted Indian Energy Exchange has indicated that it may start operations before March 31. Recently, NTPC and National Commodity and Derivatives Exchange (NCDEX) failed to arrive at an agreement on management control, and thereafter NCDEX and NSE have agreed to float a power exchange, Power Exchange India Limited.

The formation of three exchanges would be a boon for electricity consumers, as they would have a variety of choices for drawing power. This would, however, be possible only if the open access becomes a reality in its true sense.

Going by the Central Electricity Regulatory Commission data, nine power traders are there in the absence of a power exchange. The trading volume increased from 11,028.96 million units (mu) in 2003-04, when PTC India was the lone trader, to 15,022.7 mu in 2006-07.

Industry sources said that 15.02 billion units (BUs) was traded from the total power generation of 624.50 BUs in 2006-07. Thus, the percentage of trading to total generation comes to a paltry 2.41%. These transactions are generally bilateral and short-term.