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Interstate Power Trade
Introduction, Projects, Regulations, License, Company Profiles,
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- Power trading inherently means a
transaction where the price of power is negotiable and options exist
about whom to trade with and for what quantum.
- The Central Electricity
Regulatory Authority (CERC) has issued a new norm for companies to
carry inter-state power trading business. Companies must have net
worth ranging between Rs 5 crore and Rs 50 crore for obtaining three
different types of power trading licenses.
- According to CERC guidelines
issued in May 2006, the margins for inter-state power trading are
capped at 4p a unit of power traded. Total power trading volume in
the past five years have increased at a compounded annual growth
rate (CAGR) of 17%. The entry of new players in the power trading
business affected PTC’s volume, resulting in steep erosion of the
company’s market share (to 46%).
- Power demand during the rainy
seasons is low in the States of Karnataka and Andhra Pradesh and
high in Delhi and Punjab. Whereas many of the States face high
demand during evening peak hours, cities like Mumbai face high
demand during office hours. The Eastern Region has a significant
surplus round the clock, and even normally power deficit states with
very low agricultural loads like Delhi have surpluses at night. This
situation indicates enough opportunities for trading of power. This
would improve utilization of existing capacities and reduce the
average cost of power to power utilities and consumers.
- Trading margins would not exceed
4 paise a unit if the selling price of electricity is less than or
equal to Rs3 a unit. The ceiling of the trading margin shall be 7p a
unit if the selling price of electricity exceeds Rs3 a unit. The 4p
a unit cap regime was not adequate to cover the operational and
market risks borne by trading companies due to strong competitive
pressures, especially in the short-term buy and sell agreements.
This regulation will help the growth of the power trading industry.
- Under current U.S. trade policy,
these nontariff barriers are the primary form of trade restriction.
There are two primary types of interstate trade barriers: export
taxes and import restrictions. Export taxes are levied on goods and
services that are consumed mainly by people who reside outside the
state that levies the tax. Import restrictions take two principal
forms: taxes and administrative barriers.
- The Central Electricity
Regulatory Commission (CERC) has granted the licence to Patni
Projects Pvt for inter-state trading of electricity under the
Electricity Act 2007. The company has met with all conditions
including net worth of not less than Rs 7.5 crore in order to trade
up to 500 million units of electricity in a year.
- Power trading in India is in
infant stage and has high potential for growth. Provision of Open
Access was a step towards commercialization of power market with
high growth potential.
- Open access to renewable power ,
CPPs, Merchant Power Plants etc. needs special attention that may
help in development of power market.
- In India, Inter – regional power
transfer capacity, according to the statistics, stands at 9000 MW. A
perspective transmission plan has been evolved to install an
integrated and resilient Nation Power Grid in a phased manner by the
year 2012 thereby augmenting the Inter- regional transfer capacity
from the current level of 9000 MW to
30000 MW.
Entrepreneur who want the information about
Interstate Power Trade can E-Mail to
informer@eth.net,
primaryinfo@gmail.com
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Primary Information Services
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Ullagaram, Chennai - 600091, India.
Phone: 91 44 22421080
Email : informer@eth.net,
primaryinfo@gmail.com
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