CXO Speak : Rupa Singh, CEO, Power Exchange India

Q What is the current power situation in India? What are some of the key

issues that plague Indian power market?



India continues to remain a power deficit country with peak power deficit

recording a high of 16% in the last few months. India also continues to face

overall energy deficits. While the apparent reason for the same is lower

generation capacity addition, it must also be appreciated that there are

bottlenecks in almost all the parts of the electricity value chain.

Some of the key issues include, lag in generation capacity addition as

compared to demand growth, manufacturing capacity for generation equipment (for

boilers, turbines, generators etc), paucity of private capital in setting up

generation plants, transmission bottlenecks and lack of open access to

transmission. In addition, the inefficiencies in the distribution of electricity

to retail consumers and the consequent low credit quality of the distribution

companies makes it difficult for them to support additional investments in

either generation or transmission .

QWhat can be done to improve power situation in India?



The most important issue facing the country in this sector is the current

shortage in generation capacity. The Ulta Mega Power Plants are a step in the

right direction for adding large quantum of generation capacity at one go. In

our opinion, the most important step that can be taken in a co-ordinated manner

should be the development of competitive power markets.

While generation capacity addition, transmission capacity addition, plugging

AT&C losses in distribution, timely completion of the EPS and five year plans

etc. are absolutely necessary, it is the development of a common market that

would help the entire sector leverage itself on other related issues.

QHow does IT help in power trading?



PXIL like any other exchange is largely dependent on IT as it is through secure
communication networks that buyers and sellers of electricity participate on a

fully electronic platform for trading. For Power Exchange, the tool becomes even

more critical as the power markets in the country have their own peculiarities

and it is extremely important to be able to devise trading methodologies that

suit the needs of local market participants.

Therefore, PXIL has made the choice to indigenously develop the complete

trading platform, bidding and matching methodology and other related

infrastructure rather than relying on some ready made tool from markets outside

the country. Moreover, the Indian power markets are undergoing rapid evolution

and it is important that the trading tools are also able to mould themselves in

line with the changing needs and expectations of the market. The software

designed by PXIL IT team enables PXIL to launch newer products, in sync with

requirement of buyers and sellers of electricity, in a relatively short period

of time. PXIL offers a full range of services for bidding, clearing and

settlements of all electricity trading transactions using IT. In course of time,

PXIL also intends to leverage its knowledge of the Indian power sector to

provide other services to its constituents as well as the sector as a whole.