Indian Energy Exchange to Launch High Price Day Ahead Market Segment Next Month

The Indian Energy Exchange plans to launch the High Price Day Ahead Market segment by mid-March, which will facilitate power generating firms to sell power at a price of Rs 50 per unit.

Earlier this month, the Central Electricity Regulatory Commission (CERC) permitted three categories of power generators to participate in the HP-DAM market – gas-based generating stations using imported RLNG and naphtha, using only imported coal. performing thermal plants and battery energy storage systems. (BESS) — on the petition of IEX (Indian Energy Exchange).

“IEX has received approval from CERC to launch High Price Day Ahead Market (HP-DAM) in the Integrated Day Ahead Market (I-DAM) segment. We expect to launch this segment by mid-March 2023,” Rohit Bajaj, Head-Business Development, Regulatory Affairs & Strategy, IEX, told PTI.

The relaxation of norms by CERC will provide relief to three categories of power generation companies (Gencos) – those running their plants on costlier natural gas (RLNG), imported coal and BESS (Battery Energy Storage System).

Currently, there is a price cap of Rs 12 per unit in the Day Ahead Market (DAM) on energy exchanges.

With the current level of upper price cap, gencos with high variable costs for operating their plants are generally unwilling to sell power on the energy exchanges and result in stalled power generation capacity.

Against this backdrop as well as the upcoming summer season, CERC, earlier this month, allowed the launch of a new segment – HP-DAM – in which power can be bought and sold at a price of Rs 50 per unit.

However, the regulator has not laid down a floor (minimum) price of power for the HP-DAM market.

CERC has permitted three categories of power generators to participate in the HP-DAM market – gas-based generating stations using imported RLNG and naphtha; Units using only imported coal and BESS.

The power demand is expected to reach 230 GW in April this year. The power ministry has already asked 15 plants to operate at full capacity from March 16 to June 15 to avoid any shortfall in power supply during summer.

Such plants have also been allowed to pay the higher cost of imported coal used to generate electricity.

Regarding the demand under HP-DAM, Bajaj said, “During summer and other high demand months, we expect good volumes in the segment and expect this market to be liquid. As the number of buyers Further sales are expected to come in this market. We expect this new segment to give us the flexibility to boost our business volumes.” He explained that the HP-DAM would operate as part of an integrated DAM, with sequential value discovery without value limits.

“There will be a gradual clearing of G-DAM (Green Day Ahead Market) first, followed by DAM (Day Ahead Market) and finally HP-DAM. Buyers and eligible sellers will have the option to move bids unselected in DAM to HP-DAM with the flexibility to specify different prices for different segments at the time of bidding. There will be a single window for bidding as per the existing timings of 10 am to 12 noon.”

He also said that the price discovery for HP-DAM will be on a two-sided closed auction, similar to G-DAM, DAM and RTM (real time market) segments.

His view was that HP-DAM would create an enabling market segment for sellers with high cost generation and buyers willing to trade.

He added that once this section is operational, gas-based power generators, imported coal-based plants and even battery-energy storage systems will be able to sell power in the market.

He said that the demand for power is likely to increase in the coming summer season, the HP-DAM section will provide additional capacity to meet part of this incremental demand.

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(This story has not been edited by News18 staff and is published from a syndicated news agency feed)