ADVERTISEMENT

India Starts Real-Time Power Trade to Help Discoms Manage Demand

India’s main power exchanges started real-time electricity trading to allow buyers flexibility in balancing supply and demand.

India Starts Real-Time Power Trade to Help Discoms Manage Demand
Electricity pylon and electrical power lines against a grey sky India. (Photographer: Karen Dias/Bloomberg)

(Bloomberg) -- India’s two main power exchanges started real-time electricity trading Monday, a bid to allow buyers greater flexibility in balancing supply and demand.

Auctions will be conducted every 30 minutes and deliveries will be made within an hour of the session end, Indian Energy Exchange Ltd., the country’s largest power trading platform, said in a statement. Day-ahead transactions currently account for most of the trade on the exchange, known as IEX.

Power Exchange India Ltd., IEX’s smaller rival, also started real-time trading from Monday, it said in a separate statement.

The shorter delivery schedules are designed to help state distribution utilities manage unexpected changes to demand, which can result in penalties from grid operators under the existing system known as the deviation settlement mechanism, IEX said in its statement. Greater flexibility may also allow easier adoption of intermittent wind and solar power.

Under pressure to improve their finances, India’s ailing state distribution utilities are increasingly reluctant to lock themselves into tong-term contracts, which can run decades, and are exploring shorter-term transactions to meet their frequently changing needs.

The share of electricity transactions executed through long-term deals may fall to 50%-60% in about six years, from 92% now, P.K. Pujari, chairperson at the Central Electricity Regulatory Commission, said in November.

©2020 Bloomberg L.P.