India seeks new grid operation charges for electricity exports to Bangladesh risking supply disruptions

Bangladesh is facing a potential disruption in power imports from India following a proposal by New Delhi to introduce a new settlement fee for cross-border electricity trade. India has requested a charge of 0.005 Indian Rupees per unit of electricity imported, a move that would increase costs for the Bangladesh Power Development Board (BPDB).

The Ministry of Power, Energy and Mineral Resources has sought guidance from the Finance Ministry regarding the implementation of this charge. In a letter dated August 18, the Power Division warned that failure to formalize a Settlement Nodal Agency (SNA) agreement with India’s NTPC Vidyut Vyapar Nigam Limited (NVVN) could complicate the importation of 1,160 megawatts of electricity.

The proposed charge stems from a directive by India’s Central Electricity Regulatory Commission (CERC). While the CERC initially proposed a fee of 0.01 Indian Rupees per unit for cross-border trade, the rate was halved following an appeal by the BPDB. Officials from the Power Division and the BPDB clarified that the SNA charge is not a surcharge on the price of electricity itself, but rather a fee to cover the costs of grid operations, metering, and the reconciliation of cross-border power transactions.

According to the Power Division, the SNA framework is part of a broader initiative by the CERC to streamline grid-related settlements with neighboring countries. Similar charges are currently applied to India’s electricity trade with Nepal and Bhutan. Officials noted that formalizing the agreement with NVVN would consolidate transaction processes, eliminating the need to settle bills separately with individual power plants.

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The proposed agreement specifically covers 1,160 megawatts of power currently imported through NVVN under various government-level arrangements. This includes 250 megawatts from NTPC, 300 megawatts from the Damodar Valley Corporation, 160 megawatts from the Tripura State Electricity Corporation, and 450 megawatts sourced through PTC India from Sembcorp Energy India.

Bangladesh currently has the capacity to import a total of 2,656 megawatts of electricity from India. This figure includes the 1,496-megawatt supply from Adani Power’s facility in Godda, Jharkhand. BPDB officials confirmed that the power purchase agreement with Adani already encompasses provisions for such charges, meaning no separate SNA agreement will be required for the electricity supplied by that plant.