o POWER TRADING o OPEN ACCESS o CAPTIVE GENERATION BHANU BHUSHAN Director (Operations ) Power Grid Corporation of India Ltd

How do you buy or sell a commodity which can not be seen, counted in numbers, or measured in kg, litres or metres, which can not be put in a container with a forwarding address, on a particular truck taking a particular route, but flows as per laws of physics, which can not be stored, and whose availability and cost keep changing widely,

which intermingles with all other supplies in an inevitable pool, and can not have an owner’s name tag ? There is another peculiarity: the buyer has no control over what the seller supplies, and the seller has no control over what the buyer draws from the pool, and the two may not match ! It is crucial to have mechanism for commercial handling of mismatches

1) Power trading has to be notional: buyer to pay the agreed amount to the supplier for scheduled quantum of power. 2) Payment for variations from the schedule through a common mechanism, e.g. U.I. TO AVOID DISPUTES

TRADER GRID 10MW 8MW A A B Rs. 2.00/ Rs. 2.20/ u AGREEMENTS ACTUAL FLOW 12 MW

TRADER UI POOL A/C UI for 2 MW A B Rs. 2.00/ u for 10 MW Rs. 2.20/ u for 10 MW PAYMENTS UI for 2 MW

DEFINITION OF “ OPEN ACCESS ” IN THE ELECTRICITY ACT, 2003 “The non-discriminatory provision for the use of transmission lines or distribution system or associated facilities with such lines or system by any licensee or consumer or a person engaged in generation in accordance with the regulations specified by the Appropriate Commission”

A MORE GENERAL DEFINITION OF “ OPEN ACCESS ” “Enabling of non-discriminatory sale/ purchase of electric power/energy between two parties utilizing the system of an in- between (third party), and not blocking it on unreasonable grounds”

REAL ISSUES Freedom to buy/ sell, and access to market Adequacy of intervening transmission Transmission/ wheeling charges Treatment of transmission losses Energy accounting, scheduling, metering and UI settlement

An Example: Suppose TATA POWER want to sell 100 MW to Discom- A in Andhra Pradesh Steps: 1) TPC and Discom-A to agree on terms and conditions of sale 2) TPC to get the consent of MSEB and “no- objection” of MSERC 3) Discom-A to get the consent of APTransco and “no- objection” of APSERC

4) MSLDC and APSLDC to ascertain transmission adequacy, and agree to arrange necessary metering, scheduling, energy accounting and UI settlement 5) WRLDC and SRLDC to ascertain transmission adequacy in their regional transmission systems 6) All concerned to have a common understanding about treatment / sharing of transmission losses, and levy of transmission/ wheeling charges for the use of intra-State and inter-State systems

SCHEDULING, METERING, UI SETTLEMENT AGREEMENT & PAYMENT FOR SCHEDULED QUANTAM WRLDCSRLDC APTRANSCO/ APLDC TATA POWERDISCOM-A MSEB/ MSLDC

TRANSMISSION IS THE FACILITATOR OF o OPEN ACCESS o TRADING/ MARKET o CAPTIVE GENERATION, AND NOT A STUMBLING BLOCK

Thank You