The Central Electricity Regulatory Commission (CERC) has approved a high price-day ahead market (HP-DAM) segment at power exchanges, providing states, central and private utilities with an additional avenue to meet demand during times of scarcity. The decision comes as summer approaches, when power demand spikes and states scramble for power. The HP-DAM market segment will allow them to purchase power even if it is more expensive.
The order issued by the power regulator on February 16 was in response to a petition filed by the Indian Energy Exchange (IEX) Ltd, the country’s largest power trading company. “We will undoubtedly launch HP-DAM next month. “The CERC made a minor change in its order, so we need to slightly recalibrate our systems,” IEX explained. CERC has set a maximum price of Rs 50 per unit in this “expensive power” segment. Sources told Moneycontrol that the other two power exchanges, Power Exchange India Limited and Hindustan Power Exchange Ltd (HPX), were unlikely to start the HP-DAM contract right now.
The day ahead market (DAM) is a physical electricity trading location for deliveries for any/some/all 15-minute time blocks in the next 24 hours beginning at midnight. A double-sided closed bidding process determines the prices and quantity of electricity to be traded. Electricity is bought and sold electronically at three power exchanges in India. Power exchanges provide spot electricity and thus assist utilities in meeting the short-term demand-supply gap during emergencies.