Dynamics of Day-Ahead Trading of Electricity in India

Kritika Mathur and Pankaj Sinha

MPRA Paper from University Library of Munich, Germany

Abstract: Electricity is a commodity and has a characteristic of being non-storable; it must be consumed once it is produced. In India, the Electricity Act (2003) tries to promote competition by unbundling and treating generation, transmission and distribution as separate entities. In order to address the needs of the power sector, the last decade has seen the setting up of markets for bilateral trading of electricity followed by trading of power on power exchanges in 2008. Power exchanges are able to mitigate risks arising from price volatility for the participants to a large extent. Power exchanges offer short term trading of electricity, of which day-ahead electricity trading on power exchanges forms a significant component. Day-ahead electricity markets allow exchange of contracts with delivery of electricity for the twenty four hours of the next day. The study examines the trading of day-ahead electricity contracts in India.

Keywords: power exchanges; day- ahead electricity trading; trading mechanism (search for similar items in EconPapers)
JEL-codes: D44 Q41 Q48 (search for similar items in EconPapers)
Date: 2014-11-15
New Economics Papers: this item is included in nep-ene and nep-reg
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