A Green Energy Exchange on Cards to Reduce Power Costs

Power buyers can so-on start buying green electricity - solar and wind - from the ex-change at competitive rates. The Indian Energy Exchange initiative is likely to make green power cheaper, helping reduce the cash outgo on power bills by consumers.

The Central Electricity Regulatory Authority has agreed to the proposal. The ground work is ongoing and a dedicated green power exchange market is slated to be in place by April 2017. Those who buy from the green market can use it to meet their obligation on purchasing green power.

“Initially, it will be a day-ahead market where power for the next day would be traded. The trading window would be opened every- day just before the general day-ahead market which primarily deals in thermal power,” said Rajesh K Mediratta, director of business development at the Indian Energy Exchange.

“Unsold power at the green exchange platform can be offered at Rs 0 per unit at the day-ahead market, the window for which would open after the green window shuts. If this power gets sold, the producers will receive at least the renewal energy certificate price of Rs 1.50 per unit plus the average clearing price of the day,” he said.

A few green power generators already sell output through the exchanges, but the buyers get no special benefit from buying the non-polluting power. This purchase is dealt at par with that from other sources such as thermal and hydel.

A few months ago, the Indian Energy Exchange filed a request with the Central Electricity Regulatory Commission for allowing it to set up a dedicated renewable energy platform for selling and buying green power. The regulator agreed to it and is now seeking stakeholders’ comments and suggestion on the proposal.

The move is expected to increase the sale of green power which is witnessing a glut. “For example, in Tamil Nadu, some solar projects are being asked to back down about 50% of generation without compensation,” said an analyst from the solar power segment. Independent green power companies would be able to sell power at the exchange. Producers that have power purchase agreements with states, but have unrequisitioned power, can also sell power on this platform.

The exchange will require buyers to make upfront payment. As far as payments for selling solar power is concerned, payment cycles for distribution companies are getting better although there are some rare cases with delays of 45-60 days. Source: The Economic Times, Kolkata, 12th December 2016