Power trading in India still at nascent stage: Study

MUMBAI - A recent study of the power sector has opined that the power trading in India is still at nascent stage.

According to a study conducted by Ambit research, the power traded, in volume terms, is just 8.1 percent of total power generation in the country (4.9 percent excluding UI).

Of this, 52 percent is through bilateral trades, 39.2 percent through the UI mechanism and 8.8 percent is traded through the power exchanges.

“We expect bilateral trades would continue to dominate the power trading market mainly on account of the ability to structure volume, pricing and duration separately for both the buyer and the seller,” said the research team.

The study felt that the Power Trading Corporation (PTC) one of the leading power traders in India with over 50 percent market share would poised to take full advantage of all the opportunities in the power sector.

The PTC has strategic tie-ups for long-term power purchases which is being executed through itself as well as through PTC Financial Services (PFS) and PTC Energy (PEL), both subsidiaries and via a strategic stake in India Energy Exchange.

The study felt that the PTC would leverage its knowledge and information base for power trading and to establish relationships to its own advantage.

Recently, the PTC has entered into new long-term agreements to purchase over 5,088Mega Watt of power in 1HFY10 which will partially ensure that the company’s traded volumes grow at 27 percent CAGR over the next three years.

Apart from these PPAs, investments in power projects through its own balance sheet and through PTC Financial Services and PTC Energy would ensure volumes continue to increase. Some of the projects in which PTC has invested are already commissioned, while investments through PTC Energy, which is a co-developer, are expected to begin generation FY12 onward. (ANI)