CERC Grants Approval for Third Power Exchange in India

CERC has approved Pranurja Solutions, promoted by BSE, PTC Ltd and ICICI Bank, to establish what will become the third power exchange in India

The Central Electricity Regulatory Commission (CERC) has approved the petition filed by Pranurja Solutions Ltd, a company promoted by BSE, PTC Ltd and ICICI Bank, to establish what will become the third power exchange in India after Indian Energy Exchange (IEX) and Power Exchange India Limited (PXIL).

Power exchange facilitates over-the-counter sale and purchase of power via different types of contracts — day-ahead, term-ahead, renewable energy certificates, and recently int­roduced real-time electricity market.

PTC India Executive Director and Group Chief Risk Officer Rajiv Malhotra said the company was confident of meeting all the required regulations in the stipulated eight weeks. “Thereafter, following the di­r­­­ectives of CERC, we can look at op­e­­rationalising the exchange in an­other eight-nine months, effectively next financial year.”

“Our decision to come into the exchange space is not strictly a financial investment but a strategic one. We want the exchange credit space to grow so that the over-the-counter space also grows and goes beyond just one type of contract which is day-ahead,” Malhotra added.

At present, PTC holds a 49 percent stake in Pranurja Solutions, a major niggle with the existing two exchanges, as PTC is itself a major trader in the power market. A trader owning nearly a big chunk of the exchange would be a major conflict of interest because it could trade only on the exchange it owns. BSE also owns a massive 41 percent stake in the firm, while ICICI Bank holds 9.9 percent, respectively.

In line with this, the CERC has put a condition on the license for setting up of the power exchange. The shareholders will have to dilute their stakes to own not more than 25 percent each, within eight weeks of the order issuance (which was July 31, 2020). Pursuant to which, the promoters have already initiated the process to reduce their stake in the exchange to meet the criteria of 25 percent or less, which is in accordance with Regulation 19 of the Power Market Regulations, 2010.

“The Commission is prima facie satisfied that the Petitioner Pranurja Solutions Limited meets the requirements of the Power Market Regulations 2010 for grant of registration, subject to fulfilment of the shareholding pattern under Regulation 19 of the Power Market Regulations 2010,” the CERC order stated.

The proposed promoters of Pranurja Solutions will be PTC India Limited (25 percent), BSE Investments Limited (25 percent), ICICI Bank (9.9 percent), Greenko Energies (5 percent), Kirti Telnet (5 percent), Subrashi Vinimay (5 percent), Jindal Power (2 percent), Chamaria (3.1 percent), Tollman International (5 percent), Varanium Capital (5 percent), Lord Dholakia (5 percent), and Meenakshi Power (5 percent).