CERC Announces New Guidelines for Seamless Cross-Border Trade of Electricity
India has gradually strengthened its position as an electricity exporting nation and has been exporting power to Bangladesh, Nepal, and Myanmar
The Central Electricity Regulatory Commission (CERC) has issued new regulations for the cross-border trade of electricity.
These regulations will come into force from the date of publication in the Official Gazette.
These regulations will apply to the participating entities in India and neighboring countries which are engaged in cross-border trade of electricity with India. Cross-border trade of power between India and the neighboring countries will be allowed through mutual agreements between Indian entities and entities of the neighboring countries under the overall framework of CERC (Cross Border Trade of Electricity Regulations), 2019.
In case of tripartite agreements, the cross-border trade of electricity across India will be allowed under the overall framework of bilateral agreements signed between Government of India and the governments of the respective neighboring countries of the participating entities.
The Ministry of Power will assign an authority to facilitate the process of approval and laying down the procedure for import and export of electricity. The designated authority will coordinate with any authority nominated by the concerned neighboring countries for all purposes related to cross border trade in electricity.
- Designated authority will be responsible for the planning of the transmission system to facilitate cross-border trade of electricity and will coordinate with the transmission planning agency of the concerned neighboring country.
- Settlement nodal agency will be responsible for settling all charges related to grid operations including operating charges, charges for deviation and other charges related to transactions for cross-border electricity trade.
- The nodal settlement agency will be a member of the deviation pool, reactive energy pool and other regulatory pools for payment and settlement of the corresponding charges in the pool accounts of the region having connectivity with any neighboring country.
- National Load Dispatch Centre (NLDC) will act as the system operator for cross-border trade of electricity and will be responsible for granting short-term open access and for billing, collection, and disbursement of the transmission charges for short-term open access transactions.
- Central Transmission Utility will be responsible for granting long-term access and medium-term open access concerning cross-border trade of electricity and for billing, collection, and disbursement of the transmission charges.
- Interface meters (the main meter, check the meter and standby meter) will be installed at both the ends of the cross-border transmission link.
- Tariff for import of electricity by Indian entities will be determined through a process of competitive bidding or through an agreement between the buying Indian entity and the selling entity of the respective neighboring country subject to payment of the applicable charges for transmission or wheeling of electricity through the Indian grid.
- In case of import of electricity from the hydro generation projects located in any of the neighboring countries, the tariff will be determined by the CERC only if the hydro-generator approaches it through the government of the neighboring country and is agreed to by the buying Indian entities.
- Tariff for export of electricity to entities of a neighboring country by the Indian entities through long-term or medium-term or short-term agreements will be either mutually agreed or discovered through competitive bidding, subject to payment of the applicable charges for transmission or wheeling of electricity through the Indian grid.
- Where the tariff for import or export of electricity is mutually agreed between the Government of India and the government of any neighboring country involving the participating entities of the two countries, the same will be final.
- The tariff for the cross-border transmission link from the pooling station within India till the Indian border will be determined through a process of competitive bidding or through government to government negotiations or by CERC.
- Any electricity trading licensee of India can trade in the Indian power exchanges on behalf of any participating entity from other countries after obtaining approval from the designated authority.
- Disputes involving entities of separate countries will be resolved mutually by the participating entities within a period of 60 days from the date of raising of the dispute. Even after 60 days, if the dispute remains unresolved, it will be taken up at the government level. In case the dispute remains unresolved, it will be settled through the ‘International Arbitration Centre’ as will be mutually acceptable to the parties to the dispute.
- An applicant seeking long-term access for cross border trade of electricity must submit an ‘Access Bank Guarantee’ of ₹500,000 (~$7159.89)/MW valid for five years from the date of the operationalization of long-term access, for the quantum of long-term access sought.
- Total Transfer Capability (TTC), Transmission Reliability Margins (TRM) and Available Transfer Capability (ATC) for the cross-border trade of electricity will be assessed in advance by system operators in India and the concerned neighboring country and lower of the two values of ATC assessed by the two countries will be considered for allowing cross-border trade of electricity.
- In case of curtailment of the approved schedule by NLDC, transmission charges will be payable on a pro-rata basis in accordance with the curtailed schedule.
- Cross border customer must establish a payment security mechanism for payment of transmission charges and various grid related charges.
India has gradually strengthened its position as an electricity exporting nation and has been exporting power to Bangladesh, Nepal, and Myanmar. This policy comes at the right time, to help in developing a dynamic and robust electricity infrastructure for import-export of electricity and reliable grid operation and transmission of electricity.
This cross-border trade in power can be a substantial opportunity for Indian renewable energy developers and implementing agencies. India’s neighboring countries such as Bangladesh, Nepal, Bhutan, Myanmar, do not have the resources to fund massive power projects, but they are all countries with growing economies.
Earlier, Mercom reported how India and Nepal had strengthened their electricity trade with the commissioning of the high-voltage Dhalkebar substation in southern Nepal.
Saumy is a senior staff reporter with MercomIndia.com covering business and energy news since 2016. Prior to Mercom, Saumy was a copy editor at Thomson Reuters. Saumy earned his Bachelors Degree in Journalism & Mass Communication from the Manipal Institute of Communication at Manipal University. More articles from Saumy Prateek.