India Has Introduced Stringent Regulation on Cross-border Electricity Trade

According to The Himalayan Times, the regulation issued by Central Electricity Regulatory Commission for Nepal, Bangladesh, Bhutan and Myanmar seeks INR 10 million per megawatt as bank guarantee to utilise India’s transmission network. Only those hydropower projects with capacity to generate 50 megawatts and above will be granted grid connectivity to export electricity to the Indian market.

This recent regulation is based on the ‘Guidelines on Cross Border Trade of Electricity’. This was issued in December by India’s Ministry of Power. It provides preferential treatment to projects with Indian investment and those with government investment of the concerned countries.

According to the regulation, companies fully owned by the governments of the concerned countries and those having 51 per cent equity investment of Indian public and private companies can export power to the Indian market after obtaining one-time approval from the designated authority in India. Any other power generators will need to obtain approval on case by case basis.

Since the new guidelines are against the spirit of PTA, the Ministry of Energy says it has already put forward its reservations to its counterpart ministry in India.

Shailendra Guragain, president of Independent Power Producers’ Association–Nepal said, “As the Indian government has issued a uniform regulation for Nepal, Bangladesh, Bhutan and Myanmar, all the neighbouring countries should lobby together for easy access to the market of the South Asian giant.”