During the last 3-4 years, there have been positive developments in promoting power trading with neighbouring countries. Following this trend, PTC India has already signed long-term power supply agreement with the Nepal Electricity Authority and building of 400 KV transmission link between India and Nepal. Deepak Amitabh, CMD, PTC India, talks about developing power trade relations with neighbouring countries.
In the recent past it has been observed that power trading, on the part of sellers, has not been too lucrative due to low rates. What were the main reasons?
The power rates in the short-term market is low only in the North, East, Northeast and the Western (NEW) regions, whereas in the Southern region, the rates are very high. The reason for the low rates in the NEW region is mainly because there has been a significant increase in the generation capacity in this region during the last 3-4 years. Further, the RBI direction to the banks for not extending the working capital loan to utilities has resulted in reduced availability of cash with the discoms for the purchase of power. I think rates lower than the cost of generation is a temporary phenomenon. There has been an increase in tariff by the state regulatory commissions in almost 23 states in the last year, and this year, 15 state regulators have already increased their tariffs. This initiative will improve the financial health of discoms and their power purchasing capability. The Financial Restructuring Package (FRP) of the Government of India will also help the discoms in improving their financial health. With the interconnection of NEW region with the Southern region by March, 2014, the surplus power from NEW region can be exported to Southern region, which will rationalise the rate in both the regions.
What are the major challenges in power trading?
Power trading volume has increased from 2 per cent of the generation during 2002 to 11 per cent of generation in 2012. During 2012-13, about 100 billion units were sold through trading. Poor financial health of the distribution companies is a major cause of concern for the power traders. With a small trading margin of 4 paise per unit, power traders cannot take their risk of delayed or default in payment. FRP package and the initiative taken by the regulators for rationalisation of tariff will improve the financial health of discoms. Open access to consumers will provide further jump to the trading volume. However, at present, many of the state discoms are reluctant to provide open access to the industrial consumers, as they feel that with this they will lose their high-paying customers. Purchase of power by the industrial consumers through open access has recently started in some of the states, viz., Tamil Nadu, Andhra Pradesh, Karnataka, Punjab, Haryana, etc., and I am sure in the next 2-3 years, other states will also start allowing open access. This will provide a big opportunity to the trading companies.
You are one of the promoters of IEX. How do you see the trade performances at two power exchanges, IEX and PXIL?
PTC is one of the promoters of the Indian Energy Power Exchange (IEX) through its subsidiary, PFSL. IEX has shown excellent performance in the last five years. During the year 2012-13, trading volume through IEX was more than 22 BUs, which is a quantum jump of 62 per cent with respect to preceding year. It has also shown robust financial results. However, the performance of its other power exchange, PXIL, has not been picking up, and the trading volume was less than 1 BU during the year 2012-13. Good performance of IEX was mainly because of the first mover advantage. Customisation of the operating platform software to suit the Indian power market has facilitated transactions through IEX.
What have you planned for FY13-14?
During the FY2013-14, we plan to increase our trading volume to almost 34-35 BUs. PTC has few power purchase agreements (PPAs) with generators for almost 14,000 MWs. Most of these plants are under advanced stage of construction. In the FY2013-14, about 2024 MW is expected to be commissioned, and in the next year, almost 4200 MW will be commissioned. Further, almost 300 MW capacity under tolling is also expected to be commissioned during this time. This will give a push to the trading volume of PTC and increase our revenues. PTC has also taken the initiative of getting into power retail business. At present, we have almost 250 industrial consumers to whom we are supplying power. We expect to double this number by the end of year 2013-14. PTC has also signed a MoU with the Railways Energy Management Corporation (REMC) to provide cost effective power to the railways.
How is the performance in cross border trading?
PTC has been identified as the nodal agency for cross-border trade with Bhutan and Nepal. This agreement is to buy about 5 to 5.5 BU every year from Bhutan under the long-term PPAs and supply this power to the states of Eastern and Northern regions. We are also supplying about 70-80 MUs to Nepal. Power trading with Nepal is restricted because of the transmission constraints.
What are the future prospects for such trading and which are countries willing to trade with India?
During the last 3-4 years, there have been positive developments for promoting exchange of power with the neighbouring countries. PTC has already signed a long-term power supply agreement with the Nepal Electricity Authority for the supply of 150 MW of power. Building of 400-KV transmission link between India and Nepal is already under development. The construction of this link will increase further exchange of power between Nepal and India. More than 500 MW HVDC link for exchange of power between India and Bangladesh is also under construction and is likely to be commissioned by July 2013. This will help in exchange of 500-MW power from India to Bangladesh. Transfer of power from India to Sri Lanka through HVDC link and sub marine cable is under active construction as well. In addition to this, high-level discussions have already started to work out modalities for exchange of power between India and Pakistan. From Bhutan, India is already importing about 1,300-1,400 MW power. About 10,000 MW will be developed by 2020 under 'Cooperation in the field of Hydroelectric Power Development' between the Government of India and the Government of Bhutan. This will further increase import of power form Bhutan to India. Development of South Asian Regional Electricity Grid is under discussion and PTC is actively involved in the same. We have always believed that exchange of power with the neighbouring countries will play an important role in achieving energy security.
POWER TRADING CORPORATION (PTC INDIA)
PTC, promoted jointly by state-run power and finance utilities, is mainly involved into power trading û short term, medium term and long term power exchange. Apart from this, the company carries out banking and tolling of power. Banking of power is a kind of barter arrangement between utilities with surplus power and power deficit utilities during certain periods. Under power tolling, PTC provides fuel to the power generators, and the power purchased from the plant is owned and sold by PTC. PTC is also involved in providing other energy solutions, such as consultancy services for energy management, providing financial solutions through its subsidiary, PTC Financial Services Ltd (PFS), coal trading through its another subsidiary, PEL, and strategic investment solutions for power projects.
I wish to start pvc / pp electric wire unit in Delhi. What kind of information I can get if I subscribe for your magazine
Pls invite me all auction in gujarat
we are doing business developing for solar power ,thermal power , customer supporting and we have 45 mw splar power on hand needs investors.....
pls call +910842559230