Monday, October 4, 2010

Earmarking of transmission capacity for power exchanges not feasible

The CERC has termed the demand raised by the two power exhanges of India, Indian Energy Exchange (IEX) and Power Exchange of India Limited (PXIL), for the allocation of a quota in the inter-regional transmission capacity of the country, as infeasible.

  • The power exchanges' request has been driven by the substantial trade opportunities lost due to congestion in the network, ostensibly caused by the in-advance reservation of capacity by power traders, leaving very little margin for day-ahead transctions. While 5.9% of the net volume of electricity transacted by IEX over February-July 2010 could not be cleared due to excess traffic, the problem was more serious for PXIL, which lost 16.7% of its transactions due to the issue.

  • The CERC has asserted that reservation of transmission capacity for licensed traders is possible since all such transactions are from point to point, as the buyers and sellers are identified. On the other hand, transactions at power exchanges are collective in nature, wherein the exact buyers and sellers are not known to the system operator in advance.

  • Thus, the system operator would not be in a position to decide which corridors to reserve.

  • Further, for point to point corridor allocations, any changes in scheduling can be accommodated, a measure not available for collective transactions.

  • In order to somewhat ameliorate the congestion problems being faced by the power exchanges, the CERC has suggested an increase in the number of bid areas to make congestion a more localized phenomenon. To effect such a change, the system operator would, however, have to identify a larger number of corridors.

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