In a recent development, the Central Electricity Regulatory Commission (CERC) has granted Hindustan Power Exchange (HPX) the green light to introduce High Price contracts in the High Price Day Ahead Market (HP-DAM), High Price Term Ahead Market (HP-TAM), and High Price Contingency Contracts (HP-Contingency) segments. The move comes as part of the Commission’s efforts to enhance flexibility and foster competition in the power market.
HPX, which received registration in 2021 to operate as a power exchange, had filed a petition seeking CERC’s approval to introduce High Price contracts in the mentioned market segments. The proposal involved a floor price of ₹12/kWh for the High Price Market Segment, allowing trading by high variable cost generators. Additionally, HPX requested the inclusion of a forbearance price in the contracts to accommodate its software’s matching mechanism effectively.
After careful analysis, the Commission approved the contract specifications for HP-DAM, which included double-sided closed bidding and uniform market clearing price mechanisms. The bidding window for this segment will be from 10 am to 12 noon. HP-TAM and HP-Contingency contracts were also granted approval with eligibility granted to specific categories of high-cost generators, subject to periodic review by CERC.
Notably, the proposal for introducing HP-Day Ahead Contingency and HP-Intraday Contracts for hydropower generators was rejected by the Commission. The reason cited was that the proposal did not fulfill the requirement of having a separate high-price market segment.
The pricing for HP-DAM was set with a floor price of zero to avoid negative impacts on the renewable energy integration program, while the forbearance price was fixed at ₹20/kWh until further orders.
With these decisions, HPX aims to provide additional avenues for power trading and level the playing field for market participants. The Commission has directed HPX to specify penalty fines and penalties in the contract specifications and business rules to ensure transparency in risk management and better-informed decision-making for market participants.
HPX is now required to serve a copy of the approved petition to the Grid Controller of India (Grid-India) and invite comments from stakeholders and the public through its website, further ensuring a participatory and inclusive approach to its implementation.