GoI Amends Guidelines for Cross-Border Electricity Trade

The Ministry of Power, India, has updated the Guidelines for Import/Export (Cross Border) of Electricity 2018, originally issued in December 2018 and previously revised in July 2019. The latest changes, detailed in the office memorandum (OM), aim to enhance the regulatory framework governing electricity exports to neighbouring countries.

Under the new rules, Indian power generation and distribution companies are allowed to export electricity generated from coal, renewable energy, or hydropower plants. These exports can occur directly or via licensed traders, provided they receive the green light from the designated authority. 

For coal-based electricity, exports are allowed only if the coal is sourced from imports, spot e-auctions, or government-approved suppliers—unless the transaction occurs through Indian power exchanges, where this restriction is waived. Similarly, gas-based electricity exports are restricted to power generated using imported gas or other sources specified by the government.

The amendments also permit Indian generating stations that cater exclusively to foreign markets to build dedicated transmission lines connecting to the neighbouring countries' grids. This infrastructure development requires approval and adherence to the Electricity Act of 2003, with financial terms embedded in agreements between the involved parties.

These generating stations may be allowed to tie into the Indian grid, either across state lines or within a single state, to sell electricity domestically in cases where there are sustained non-scheduling issues or defaults in Power Purchase Agreements (PPAs). These updates aim to ensure a more resilient and flexible energy export system, while the other provisions from the original 2018 guidelines remain intact and unchanged.

The Ministry of Power (MoP) in consultation with the Ministry of External Affairs has issued guidelines for cross-border trade of electricity in the first place with objectives to facilitate the import and export of electricity between India and neighbouring countries, evolve a dynamic and robust electricity infrastructure for the trade of electricity; and promote transparency, consistency, and predictability in regulatory mechanism pertaining to such trade.