The Central Electricity Regulatory Commission (CERC) has ruled that the power exchanges should continue to allow members to quote a price in the range of ₹0/kWh to ₹12(~$0.15)/kWh in the Day-Ahead Market (including Green Day-Ahead Market), Real-Time Market, Day-Ahead Contingency, and Term-Ahead (including Green Term-Ahead Market) contracts from October 1, 2022, to December 31, 2022.

The Commission gave the direction after reviewing the situation in the power market and other related factors impacting the demand and supply of electricity.

Background

In April this year, CERC directed the power exchanges to re-design their bidding software so that members can submit their buy bids at the maximum price of ₹12 (~$0.15)/kWh for the Day-Ahead and Real-Time markets.

The order was applicable until June 30, 2022. Later the validity of the order was extended for three months until September 30, 2022.

Commission’s analysis

Based on the data provided by power exchanges, the Power System Operation Corporation (POSOCO), and the Central Electricity Authority, the Commission noted that the peak demand fluctuated and touched 199 GW on September 7, 2022. Based on past trends, it would remain significant in the winter months.

Also, during the last three months, the market clearing price of ₹12 (~$0.15)/kWh in the Day-Ahead Market had generally been discovered during the evening hours from 18:30 hrs.

From September 15, 2022, morning and evening peaks in the market clearing price were observed in the Day-Ahead Market at IEX. It is expected that these peaks are anticipated to become steeper during the winter season.

The Commission said high demand for electricity, particularly from household and industrial consumers, was likely to continue over the next few months mainly due to the festive season and pressure emanating from lighting and heating load.

CERC noted that the domestic coal stock was well-positioned compared to October-December 2021. However, it is expected that generation from hydro and wind would start decreasing from October onwards, which would exert pressure on coal stock.

After analyzing the market trends and to protect consumer interests, the Commission decided to extend the validity of the earlier order until December 31, 2022.

The Green Day-Ahead Market traded 321 MU in August with a weighted average price of ₹5.20 (~$0.065)/kWh. In all, 157 entities participated in the process. The highest number of participants in a single day was 114 on August 10, 2022.

Last month, CERC granted time for one more year from August 15, 2022, for power exchanges to align their clearing and settlement system to the Payment and Settlement Systems Act 2007.

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