The first trilateral supply of electricity through the Indian power transmission network was jointly inaugurated on Friday by India, Bangladesh and Nepal, a development that points to India’s ambition of establishing an integrated South Asian power market.

India approved up to 40 megawatts (MW) of cross-border power transaction from Nepal to Bangladesh via the Indian grid. “This historic occasion marks the first trilateral power transaction carried out through the Indian grid,” Power Ministry noted.

The development assumes importance as India aims to become a major hub for trading in electricity and refined petroleum products in the South Asian region. For instance, India will supply liquefied natural gas (LNG), through State-run Petronet LNG to Sri Lanka for its power plants. Besides, both countries are also working on an undersea transmission line for supplying electricity.

Similarly, Bangladesh also receives electricity from Adani Power, which is currently facing issues in recovering outstanding dues from the country after thepolitical crisis in August. However, government officials are confident that the issue will be resolved as Bangladesh has started making payments.

Strengthening cross border electricity trading is also envisaged under the South Asian Association for Regional Cooperation (SAARC) Framework Agreement for Energy Cooperation, which was signed in 2014.

Cross border trade

At present, cross-border power trading between India and its neighbours takes place through bilateral agreements.

NTPC Vidyut Vyapar Nigam (NVVN), a subsidiary of State-run power generation major NTPC, is the nodal agency for cross-border trading of power with Bangladesh, Bhutan and Nepal. It is also the Settlement Nodal Agency (SNA) for grid operation-related charges with Bangladesh, Bhutan, Nepal and Myanmar.

Another company, PTC India, is also involved in power trading with Bhutan, Nepal and Bangladesh. Since 2021, the Indian Energy Exchange (IEX) is trading with Nepal through Day Ahead Electricity Market.

The government has introduced several policy measures aimed at expanding power trading across countries. For instance, SBICAPS, in a July 2023 report, said that the Central Electricity Regulatory Commission (CERC) introduced market coupling for spot power trading, which, among other benefits, enables cross-border trading by linking markets.

Earlier this year, India revised its guidelines for import and export of electricity. These revisions support reliable grid integration and transmission for cross border trading, thereby strengthening regional energy cooperation.

One Sun, One World, One Grid

At the heart of India’s ambition of creating a transnational power market is the One Sun One World One Grid (OSOWOG) initiative.

As part of OSOWOG, India, Saudi Arabia, the UAE and Singapore are in various stages of planning for creating a mega grid infrastructure, which will enable trade in renewable energy from South East Asia to Europe via the Middle East.

In September last year, the then Power Minister RK Singh told businessline that grid interconnection from South East Asia to Europe is part of the OSOWOG initiative, which will be beneficial to all countries participating in the sense that these countries will be able to access renewable energy (RE) at the least cost.

“The concept behind OSOWOG is that when the sun sets in Vietnam, it will be shining in India. Similarly, when the sun sets in India, it will be shining in Saudi Arabia or vice versa. So, you do away with the requirement for storage. Now, storage is expensive. Our bid for storage gave us a rate of ₹10 per kilowatt. Even pumped hydro is in the range of ₹5.50 per kilowatt,” he said.

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