Saturday, December 22, 2018

India relaxes cross-border power trading guidelines

India has relaxed the cross border power trading guidelines by giving recognition to the tripartite arrangement in cross-border trading of electricity. The 'Guidelines on Cross Border Trade Import/Export of Electricity' has also paved the way for Nepal to export surplus electricity to Bangladesh via Indian transmission lines.
The Indian Power Ministry – introducing the new guideline – has removed the discriminatory provision included in the older one, under which Nepali-based hydropower projects, which are owned by the Indian government or have a majority (51 per cent) Indian share were only allowed to export power to India.
The new guideline has, however, included a provision under which two countries having a bilateral agreement with the Indian government can trade electricity between them through Indian power lines after entering into agreement with the Indian government owned-Central Transmission Utility.
"Provided that in case of tripartite agreements, the cross border trade of electricity across India shall be allowed under the overall framework of bilateral agreements signed between the Government of India and the Government of respective neighbouring countries of the participating entities," the guideline reads.
"Where tripartite agreement is signed for transaction across India, the participating entities shall sign a transmission agreement with the Central Transmission Utility of India to obtain transmission corridor access," it further reads, adding that it will foster power trade between Nepal and Bangladesh.
While issuing guidelines on cross-border electricity trade for the first time in 2017, the Indian Power Ministry had neglected a possibility of trilateral arrangement among Nepal, India and Bangladesh. But the new guidelines – issued after withdrawing the old one issued in 2017 – provide an opportunity to its neighbouring countries, including Bangladesh and Nepal to trade electricity between them through Indian territory.
The latest guidelines – that is more progressive and has opened plenty of avenues for the development of hydropower sector in Nepal – also follows the spirit of the Power Trade Agreement (PTA) signed between Nepal and India in 2014, which requires both countries to allow non-discriminatory access to cross-border electricity market.
The older guideline was discouraging to foreign investors and private Nepali power developers planning to construct export-oriented hydropower projects.

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