NLC to trade power in­de­pen­dently

Financial Chronicle - - GAME - SANGEETHA G

HAV­ING se­cured a li­cence, Neyveli Lig­nite Cor­po­ra­tion will be in­de­pen­dently trad­ing in the power mar­ket through a power trad­ing arm. The com­pany hopes that the new devel­op­ment will dou­ble its rev­enue from trad­ing.

NLC has se­cured a Cat­e­gory I li­cence for power trad­ing from Cen­tral Elec­tric­ity Reg­u­la­tory Com­mis­sion last week. With this li­cence, the com­pany can in­de­pen­dently trade in the power mar­ket.

“As a part of its busi­ness pro­mo­tion and di­ver­si­fi­ca­tion plan NLCIL has joined the league of Ac­cred­ited Power Traders in the coun­try,” the com­pany said.

The com­pany has been trad­ing power for the past two years with­out a li­cence. Dur­ing the past two years, it would sell the un­req­ui­si­tioned or sur­ren­dered sur­plus power by the dis­coms, which they were not able to sell due to chang­ing de­mand-sup­ply sce­nario.

NLC was trad­ing this through Na­tional Ther­mal Power Cor­po­ra­tion’s trad­ing arm, NTPC Vidyut Vya­par Nigam, as it could not buy and sell in­de­pen­dently in the mar­ket with­out a li­cence.

Now with the li­cence, NLC can form its own power-trad­ing arm. It can en­ter into bi­lat­eral agree­ments with power gen­er­at­ing com­pa­nies and buy their un­der­utilised ca­pac­ity and sell it to dis­coms, mainly in the south­ern states.

“Some of the power plants in the south­ern re­gion have not tied up for their full ca­pac­ity with power pur­chase agree­ments. Such plants would sell us the sur­plus for lower rates, which we would in turn sell to the dis­coms,” said A Gane­san, DGM, Fi­nance, NLC. The trad­ing of sur­plus power in the mar­ket will pave the way for ef­fec­tive util­i­sa­tion of gen­er­at­ing ca­pac­ity of GENCOS. The sur­plus power other­wise would have gone waste, he added.

In 2016-17, NLC had gar­nered a rev­enue of Rs 134 crore from power trad­ing and this went up to Rs 294 crore in 201718. With the launch of in­de­pen­dent trad­ing, NLC ex­pects to more than dou­ble the rev­enue from trad­ing this fis­cal. With vol­umes pick­ing up, NLC hopes that trad­ing will also help the com­pany im­prove its profit mar­gins.

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