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Dynamics of Day-Ahead Trading of Electricity in India

Author

Listed:
  • Mathur, Kritika
  • Sinha, Pankaj

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.

Suggested Citation

  • Mathur, Kritika & Sinha, Pankaj, 2014. "Dynamics of Day-Ahead Trading of Electricity in India," MPRA Paper 59934, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:59934
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    References listed on IDEAS

    as
    1. Shukla, Umesh Kumar & Thampy, Ashok, 2011. "Analysis of competition and market power in the wholesale electricity market in India," Energy Policy, Elsevier, vol. 39(5), pages 2699-2710, May.
    2. Singh, Anoop, 2010. "Towards a competitive market for electricity and consumer choice in the Indian power sector," Energy Policy, Elsevier, vol. 38(8), pages 4196-4208, August.
    3. Bhattacharyya, Subhes C., 2005. "The Electricity Act 2003: will it transform the Indian power sector?," Utilities Policy, Elsevier, vol. 13(3), pages 260-272, September.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    power exchanges; day- ahead electricity trading; trading mechanism;
    All these keywords.

    JEL classification:

    • D44 - Microeconomics - - Market Structure, Pricing, and Design - - - Auctions
    • Q41 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Demand and Supply; Prices
    • Q48 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Government Policy

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