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| Power Trading |
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The development of the power sector
is often cited by the Government of India as one of
its top priorities, as increased power supply is
necessary for ensuring sustained GDP growth.
With the ratification of the Electricity Act of
2003, the Government took a bold step towards
restructuring the power sector in the country.
This Act officially recognized Power Trading as
a licensed activity, defining it as the,
"purchase of electricity for resale thereof," to
be carried out as per the rules and regulations
stipulated by the Central Electricity Regulatory
Commission (CERC).
Simply put, Power Trading is the process by
which electricity is bought from a power-surplus
utility/region for resale to a power-deficit
utility/region. This is a particularly effective
strategy for optimum utilization of resources in
a country with as much inherent diversity as
India, where periods of seasonal oversupply in
one state can coincide with periods of relative
scarcity in another.
Currently, only 3% (approx.) of electricity
generated in India is traded through short-term
bilateral contracts. Due to the constraints of
transmission capacity, the Indian inter-state
electricity trade market is relatively
underdeveloped. However, with the growth and
synchronization of regional grids, and a steady
increase in surplus capacity, there is
significant potential for expansion of the Power
Trading market across the country.
Considering this scope for development, and our
close associations with various State
Electricity Boards as their coal handlers, KCT
has decided to diversify by including Power
Trading in its business portfolio.
The Company was awarded an Inter-State Trading
License by CERC in 2005, which was upgraded to
the highest Category "F" in 2006 (this has since
been re-classified as Category-I in 2008). KCT
already has more than three years of experience
performing various inter-state electricity
trades across the country, including day-ahead
and short-term bilateral transactions.
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