India issues guidelines on cross border trade of electricity

Kathmandu, December 7

India’s Ministry of Power has issued ‘Guidelines on Cross Border Trade of Electricity’ with an aim to facilitate and promote cross border trade of electricity with greater transparency, consistency and predictability in regulatory approaches across jurisdictions and minimise perception of regulatory risks.

The issuance of the guidelines would facilitate major hydropower projects being developed in Nepal — like 900MW Upper Karnali, which is being developed by GMR Energy, and 900MW Arun-3 being built by India’s state-owned Satluj Jal Vidyut Nigam — in exporting surplus power to the southern neighbour after they are completed.

The guidelines state that India’s Ministry of Power shall designate an authority for facilitating the process of approval and laying down the procedure for cross border transaction and trade in electricity.

The designated authority shall coordinate with the nodal agency of the neighbouring country for all purposes, including facilitating the process of approval and laying down the procedure for cross border trade; planning, monitoring and coordinating the commissioning of cross border transmission lines for cross border transactions; the grid security, safety and operation; and any other function as assigned by Ministry of Power.

The Central Electricity Regulatory Commission (CERC) of India shall frame the appropriate regulation for facilitating the cross border trade of electricity with neighbouring countries in accordance with the guidelines. The regulation so framed by CERC shall be binding on all the participating entities.

At present, India’s cross border trade of electricity has been taking place with Nepal, Bangladesh and Bhutan under

bilateral memorandum of understanding (MoU) or Power Trade Agreement (PTA).

The guidelines has been issued following the SAARC Framework Agreement for Energy Cooperation (Electricity) signed by the SAARC countries on November 27, 2014.