The Ministry of Power (MoP) has issued new guidelines for import and export of electricity and power trading with neighboring countries.

The 2018 guidelines will replace the existing guidelines on cross border trade of electricity issued in 2016.

The objective of the new guidelines is the same as the previous one – to facilitate and promote cross-border trade of electricity, developing a dynamic and robust electricity infrastructure for import export of electricity and reliable grid operation and transmission of electricity.

While the earlier guidelines allowed cross border power transactions only through bilateral agreements between two countries, the new guidelines allows power generating or distribution companies of India to export electricity generated by coal (with certain restrictions), renewable energy or hydro power to companies of neighboring countries directly or through trading licensees of India after taking government approval.

Moreover, any  Indian  power  trader  may,  trade in Indian Power Exchanges on behalf of any company of neighboring  country,  for  specified  quantum  as  provided  with government  approval  and  complying with CERC Regulations.

This opens a whole new market especially for renewable energy developers who are finding it difficult sell power to the DISCOMs owing to lack of demand.

The 2016 guideline provided preferential treatment to projects with government investments of respective countries. According to the regulation, companies fully owned by the governments of the concerned countries and those having 51 percent equity investment of Indian public and private companies could export power to the Indian market after obtaining one-time approval from the designated authority in India. Any other power generators needed to obtain approval on case by case basis. This preferential treatment has now been removed.

Earlier, Mercom reported how India and Nepal have strengthened their electricity trade with the commissioning of the high-voltage Dhalkebar substation in southern Nepal. The Dhalkebar substation is the first 220 kV substation in Nepal which works as first interconnection between Nepal and India operating at this voltage level.

India has gradually strengthened its position as an electricity exporting nation and has been exporting power to Bangladesh, Nepal, and Myanmar. In September 2018, replying to a question in Lok Sabha, the minister for Power, R.K. Singh, stated, “India is currently supplying around 660 MW power to Bangladesh and it would increase by 840 MW after the completion of additional transmission links.”