Alleging failure in price discovery at power exchanges, PTC India Ltd CMD Rajib Kumar Mishra on Wednesday strongly advocated the need for market coupling of the power exchanges, one of which is owned by PTC India.
“The need for market coupling arose as there were aberrations in price discovery. There should be one national price and the states should buy through only one platform which will be the final discovery,” he said.
Last month, the power ministry directed the Central Electricity Regulatory Commission (CERC) to initiate the process of market coupling of power exchanges. It was vehemently opposed by the Indian Energy Exchange (IEX), which handles more than 90% of the power deals in India.
Mishra said that the government is not giving any direction on its own but is just following the power market regulation of 2021, which said that there will be market coupling and the date can be decided on the basis of preparedness of the infrastructure.
Apart from IEX, the other two power exchanges are Power Exchange of India Ltd (PXIL) and Hindustan Power Exchange (HPX). HPX is owned by power trading solutions provider PTC India, a public-private partnership entity.
“If there are continuous aberrations in the market price and a drift from day ahead market to term ahead market, which is a bilateral market, then it is certainly the time when you should introduce it (coupling),” he said.
Mishra further rejected the comparison to Ola-Uber and BSE-NSE, saying they both are continuous market, unlike the power market which is a block market and is done a day in advance, and without any knowledge of prices in other exchanges.
“Ola and Uber is a continuous and localised market. BSE and NSE is also a continuous market and all players are watching it. In power exchanges, it is the 96 time blocks of 15 minutes each that you try to determine for the next day. These are not comparable,” he said.
As for the outlook of the company, Mishra said that PTC India expects to add 20% to its power trading volume from 70 billion units (BU) in FY23 to about 85 BU in FY24. Still, lower than 87 BU done in FY22.
“That was a conscious call not to service those trading volumes which is below our cost of service in 2022-23. We let go almost 15 BU as they were below the cost. As a result, our margins were better in FY23 than in FY22,” he said.
PTC India plans to do more long and medium term bilateral contracts and cross border power trades in FY24 to improve its margins. In FY23, almost 60% of the power trading deals were in the short term or on exchanges. It wants to restrict the exchange traded volume to be within 50%.
