With an objective to promote optimal utilization of resources and encourage competition, Electricity Act 2003 recognized “Power Trading” as a distinct licensed activity. It is an activity of buying and selling of power on Power Exchanges, which are approved by Central Electricity Regulatory Commission (CERC), standardized Products are offered to buy and sell power and also buying and selling between a generator and a consumer. This activity comprises of two types of transactions namely, Collective Transaction and Bilateral Transactions.

Power Exchange Transactions

Collective transaction means a set of transactions discovered in power exchange through anonymous, simultaneous competitive bidding by buyers and sellers. Electricity Power Exchange provides a spot market, mainly day-ahead, for electricity, which like any other market matches demand and supply for each time block, while providing a public price index. Power Exchanges have the following characteristics:

Bilateral Transactions

Bilateral transaction means a transaction for exchange of energy (MWh) between a specified buyer and a specified seller directly or through a trading licensee from a specified point of injection to a specified point of drawl for a fixed or varying quantum of power (MW) for any time period. Bilateral market aims at the following: