'Centralized Cell' to streamline power sale, purchase management in HP

| | Shimla
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'Centralized Cell' to streamline power sale, purchase management in HP

Monday, 18 September 2023 | PNS | Shimla

Aimed at revolutionizing the coordination of power trading strategies and transactions within the state's energy sector, the Himachal Pradesh Government has decided to establish a Single Energy Trading Desk.


“The move is set to reshape the landscape of energy management in Himachal Pradesh, ensuring efficient short, medium, and long-term planning and the economic disposition of energy resources, commencing in the financial year 2024-25,” said the Chief Minister Sukhvinder Singh Sukhu on Sunday.


The Chief Minister said that the nature has blessed Himachal with abundant water resources, boasting a total hydro potential estimated at a staggering 24,567 MW (megawatt), whereas only 11,150 MW has been harnessed through 172 hydro projects till date.


Sukhu underscored the need for enhanced coordination among three key entities — the Directorate of Energy (DOE), Himachal Pradesh Power Corporation Limited (HPPCL), and Himachal Pradesh State Electricity Board Limited (HPSEBL). “The lack of communication and disparate pricing strategies have sometimes led to power being sold at suboptimal rates and purchased at higher costs, exacerbating inefficiencies and losses to the state exchequer,” he noted.


The Chief Minister emphasized the significance of this initiative by pointing out that DOE, unlike the other entities, is not a regulated entity, with all revenues from power sales flowing into government receipts. “Conversely, power transactions and activities of HPPCL and HPSEBL must undergo pre-approval by the Himachal Pradesh Electricity Regulatory Commission (HPERC). Therefore, there is a need to establish a ‘Centralized Cell’ to streamline power sale and purchase management, ultimately aiming to boost revenues,” he said.


Sukhu said that the third Disbursement Linked Indicator underscores the necessity of merging existing trading contracts of the Directorate of Energy, HPPCL, and HPSEBL into the single trading desk and an allocation of Rs 200 crore will be made for its operational needs.


“This transformative Single Energy Trading Desk will undertake a multifaceted role. It will not only optimize power trade but also explore structural and financial aspects to create a unified, independent entity overseeing power trade in Himachal Pradesh, encompassing HPSEBL, HPPCL, and DOE,” he said, adding that the move is aimed at establishing mutual settlement arrangements within the regulatory framework applicable to power generation and distribution companies.


The desk's advanced capabilities will enable precise energy forecasting for hydro and other renewable sources, enhancing the state's ability to sell pooled power effectively and maximize the benefits of Renewable Purchase Obligation or Hydro Purchase Obligation. Furthermore, it will contribute to reducing overall Deviation Settlement Mechanism charges, marking a significant step toward making Himachal Pradesh the country's foremost Green Energy State, he added.

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