Government of India Amends Cross-Border Electricity Trade Guidelines to Strengthen Regional Energy Cooperation

The Ministry of Power, Government of India, has issued an important amendment to the “Guidelines for Import/Export (Cross Border) of Electricity-2018” (IECBE Guidelines-2018). This amendment, dated August 12, 2024, introduces modifications to clause 5.2(a) and clause 8.9 of the guidelines, with the approval of the Minister of Power. These changes aim to streamline and enhance the framework for cross-border electricity trade while addressing technical, strategic, and operational considerations.

Key Amendments in the IECBE Guidelines-2018 

Clause 5.2(a): Export of Electricity 

The amendment specifies the conditions under which Indian generating companies or distribution companies can export electricity to neighboring countries. The key highlights are:

Sources of Electricity for Export:
- Electricity generated from coal, renewable energy, or hydropower-based plants can be exported directly or through trading licensees, subject to approval from the Designated Authority.
- For coal-based generating plants:
  - Export is allowed only if the electricity is generated using imported coal, spot e-auction coal, coal obtained from commercial mining, or other sources specified by the Government of India.
  - Restrictions on coal-based electricity exports do not apply to collective transactions through Power Exchanges in India.
- For gas-based generating plants:
  - Export is permitted only if the electricity is generated using imported gas or other sources specified by the Government of India.

Clause 8.9: Dedicated Transmission Lines for Neighboring Countries 

The amendment introduces provisions for Indian generating stations supplying electricity exclusively to neighboring countries:

Construction of Dedicated Transmission Lines:
- Generating stations may build dedicated transmission lines to connect to the transmission systems of neighboring countries, considering technical and strategic factors.
- Approval from the Designated Authority is required, in accordance with the Electricity Act, 2003.
- The cost of constructing these transmission lines will be included in the contract agreement between Indian entities and neighboring countries.
Connection to Indian Grid:
- The Government of India may permit the connection of such generating stations to the Indian Grid (inter-State or intra-State) to facilitate the sale of power within India under specific circumstances:
  - Sustained non-scheduling of full or partial capacity.
  - Default notices issued by the generator due to payment delays or other contractual defaults under the Power Purchase Agreement (PPA).

Implications of the Amendments

These amendments reflect India’s commitment to fostering regional energy cooperation while ensuring compliance with domestic regulations and strategic interests. The changes provide clarity on the conditions for exporting electricity and building dedicated infrastructure for cross-border electricity trade. By allowing connection to the Indian Grid in case of non-scheduling or defaults, the amendments also safeguard the interests of Indian generating stations.

Unchanged Provisions

The Ministry of Power has clarified that all other contents of the IECBE Guidelines-2018 remain unchanged.

Stakeholders Informed

The Office Memorandum has been circulated to key stakeholders, including:

Chairpersons of the Central Electricity Regulatory Commission (CERC) and Central Electricity Authority (CEA).
Senior officials from NITI Aayog, Ministry of External Affairs, Ministry of Commerce, Ministry of New and Renewable Energy, and other relevant organizations.
Heads of major power sector entities such as POWERGRID, NTPC, GRID-India, EESL, NVVN, and CTUIL.
Energy Secretaries of all States and Union Territories.

Conclusion

The amendments to the IECBE Guidelines-2018 mark a significant step in strengthening India’s cross-border electricity trade framework. By addressing technical, strategic, and operational aspects, the Ministry of Power aims to ensure seamless and efficient electricity trade with neighboring countries while safeguarding the interests of Indian entities. These changes are expected to enhance regional energy cooperation and contribute to India’s vision of becoming a regional energy hub.

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Source: Ministry of Power

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