New CERC Regulations To Ease Cross Border Electricity Trade

19 March 2019

The Central Electricity Regulatory Commission (CERC) of the Government of India revised the regulations concerning power trade between India and its neighboring countries, covering both bilateral and trilateral energy trade. This follows the new Guidelines on Import/Export (Cross Border Trade) of Electricity – 2018 released by the Ministry of Power of the Government of India in December 2018 that support electricity trade between India and the regions’ power producers

The CERC Cross Border Trade of Electricity Regulations 2019 include sections on:

  • General Provisions, which covers the scope, institutional framework, tariff determination, and trade through Indian power exchanges;
  • Transmission Planning, Connectivity, and Access, which includes provisions on planning and implementation of cross border transmission links, general provisions for connectivity, long term access, medium term open access and short term open access, application fee, application for grant of connectivity, application for short-term access, long-term access, and medium-term open access, time frame for processing long-term access and medium-term open access application, treatment of delay in transmission system and generation projects, access bank guarantee, operationalization of long-term access, metering arrangements, data and communication facilities, system recording instruments, reactive power compensation, and cyber security;
  • System Operation, which covers system security aspects, declaration of transfer capability, scheduling, metering, energy accounting and settlement, curtailment of cross border electricity trades in case of contingency, event information, and coordination between system operators;
  • Payment of Charges and Payment Security Mechanism; and
  • A miscellaneous section, which covers regulations on dispute settlement and resolution mechanism, and power to relax and issue directions.

Key sections from the revised Regulations state that:

  • The regulations shall be applicable to the Participating Entities in India and the neighboring countries which are engaged in cross border trade of electricity with India. The regulations shall be applicable to the Participating Entities in India and the neighboring countries which are engaged in cross border trade of electricity with India. 
  • Cross border trade of electricity between India and the neighboring country(ies) shall be allowed through mutual agreements between Indian entity(ies) and entity(ies) of the neighboring country(ies) under the overall framework of agreements signed between India and the neighboring country(ies) consistent with the provisions of the prevailing laws in the respective country(ies), including:
    • through bilateral agreement between two countries;
    • through bidding route; or
    • through mutual agreements between entities; or
    • provided that in the case of tripartite agreements, the cross border trade of electricity across India shall be allowed under the overall framework of bilateral agreements signed between Government of India and the Governments of the respective neighboring countries of the Participating Entities.
  • Designated Authority appointed by the Ministry of Power, Government of India shall be responsible for facilitating the process of approval and laying down the procedure for import and export of electricity. The Designated Authority shall coordinate with any authority designated by the concerned neighboring country for all purposes stated in the Guidelines. 
  • Transmission Planning Agency shall be responsible for planning of transmission system for the purpose of facilitating cross border trade of electricity and may coordinate with the Transmission Planning Agency of the concerned neighboring country, wherever necessary. For India, this function shall be discharged by the Designated Authority. 
  • The Cross Border Transmission Link between India and any neighboring country shall be planned jointly by Transmission Planning Agencies of the two countries with the approval of the respective Governments keeping in view the future need for electricity trade between India and the neighboring country.
  • The manner of implementation of Cross Border Transmission Link between the pooling station within India till the Indian border and the implementing agency shall be decided by Government of India. Provided that a participating entity having a generating station located in a neighboring country may develop, operate and maintain the dedicated transmission system from the generating station to the pooling station within India at its own cost after obtaining all the necessary approvals from respective countries.
  • The Transmission Planning Agency of India, in consultation with the Transmission Planning Agency of the neighboring country, shall grant access to the Participating Entities to use Cross Border Transmission Link for cross border trade of electricity.
  • Cross border trade of electricity shall be undertaken in a manner that ensures reliable, secure and stable operation of the interconnected grid and does not jeopardize grid security at any point of time. For purposes of cross border trade of electricity, all grid operation related provisions shall be applicable as per the prevailing regulations of the Commission.

Read the full CERC Cross Border Trade of Electricity Regulations 2019.

 

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