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Home News Power Sector News NTPC to exit proposed National Power Exchange

NTPC to exit proposed National Power Exchange

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NTPCIndia's largest power company NTPC has decided to exit the proposed third power trading exchange because of policy hurdles and adverse market conditions for trading platforms that helped revive many sick units across the country by providing them cheaper electricity. Experts says Indian power exchanges, once perceived as revolutionary in the sector for assured electricity supply and market determined prices, are in doldrums with just one of the two power exchanges making profit.

Future of the third proposed exchange - National Power Exchange - remains uncertain with NTPC walking out of it. NHPC, Power Finance Corp (PFC) and Tata Consulting Services are the other members of the proposed exchange that was expected to begin operations this fiscal.

An official close to the development said NTPC has conveyed its willingness to quit the proposed exchange to other members. The company has cited changes in market conditions and power exchange regulations as the reason for backtracking from the project. NTPC board is likely to take a final call on the issue in its ensuing board meeting on December 28.

Power Exchange Market Regulations, 2010, specified by the Central Electricity Regulatory Exchange (CERC), bar participating members of an exchange from holding more than 5% equity. State electricity regulators' reluctance to give large industrial consumers the right to purchase power from exchanges is also an obstacle in smooth functioning of power exchanges.

Jayant Deo, advisor, India Energy Exchange (IEX), says: "The Indian power exchange market is awaiting various reforms and has not developed since open access to large consumers is yet to be implemented."

Currently, Financial Technologies-promoted IEX owns about 93% market share, while Power Exchange India, jointly promoted by National Stock Exchange and National Commodity & Derivatives Exchange, owns the rest.

Source- Economic Times

 

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