for the ability to sell electricity into the system, and since 2008, power exchanges have allowed for exchange-based trading of electricity via the Indian Energy Exchange (IEX).

Policy and regulation

The Indian power sector has governing bodies at two levels: central (or federal) and state. The central-level power market is divided into five regions: Northern, Western, Southern, Eastern, and Northeastern (Central Electricity Authority of India, 2019). The Ministry of Power is the highest central governing body and is responsible for policy, planning, and project development and implementation. It shares the policy and planning responsibility with the Central Electricity Authority and state governments.

Regulation is handled by the Central Electricity Regulatory Commission (CERC), which regulates tariffs of centrally owned generating companies and other generating companies that sell electricity in more than one state as well as regulating and determining the tariffs for interstate transmission, and by State Electricity Regulatory Commissions, which handle electricity generated by individual states and electricity that is sold within a single state (Ministry of Law and Justice, 2003). The Central Advisory Committee (CAC) is in place to advise CERC on policy questions, compliance of power market licensees and standards of performance by utilities; however, CAC has no direct policy or regulatory control.

Secondary power trading arrangements

Two of the case studies in this section can be characterised as secondary power trading arrangements: SAPP and SIEPAC. These are detailed in the following sections.

SAPP

SAPP was created on 28 August 1995, with the primary aim of providing reliable and economical electricity supply to consumers in each of the SAPP member countries, consistent with reasonable utilisation of natural resources and minimised negative impact on the environment. SAPP consists of 12 countries totalling a population of approximately 300 million people. As of 2018, SAPP had 16 members active in cross-border power trade. The approximate consumption in the SAPP area is 400 TWh, though traded volumes are significantly lower at only 1 TWh (Table 9).

Source: Southern African Power Pool (2017), SAPP Annual Report 2017.

One important lesson from the development of SAPP is that the national markets have not been deregulated. In each of the participating countries, national incumbent power companies act as single buyers (and sellers) of electricity. However, this has not hindered the development of a market model to support the better utilisation of power resources on a regional basis. In some of the countries, IPPs have been allowed to participate directly in SAPP.

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