Indian Energy Exchange Gains Regulatory Approval To Introduce High Price Segment In Power Trading


The Indian Energy Exchange Ltd. (IEX) has achieved a significant milestone in the power trading industry as it secures regulatory approval to introduce a High Price Segment in its trading platform. This groundbreaking move, referred to as HP-ITD, HP-DAC & HP-AM (High Price IntraDay, Day Ahead Contingency, and Term Ahead Market), is aimed at enabling high variable cost generators to actively participate in the power market, effectively breaking free from the constraints imposed by the prevailing price cap.


IEX, in its petition to the regulatory authority, outlined a series of requests, including seeking approval for the introduction of the proposed High Price segment, amending the Business Rules of IEX to accommodate HP contracts, defining eligibility criteria for seller participation in the HP contracts, and granting the flexibility for the price range in HP-DAM contracts. The primary objective is to create an inclusive market where high-cost generators can contribute to meeting the demand-supply equilibrium.


This recent development follows a notable approval granted in February 2023 when the Commission gave the green light to IEX for the launch of the High Price Day Ahead Market (HP-DAM). The HP-DAM contract was successfully launched on the IEX platform on March 10, 2023. However, the four months since its launch have shown limited liquidity in this segment, translating into reduced trading volumes. This highlights the pressing need for an alternative trading segment capable of accommodating high-cost generators, particularly in the context of the current supply-demand dynamics.

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The proposal presented by IEX specifies that the contract specifications for the proposed HP-ITD, HP-DAC & HP-TAM segments will largely mirror those of the existing Intra Day & Day Ahead Contingency and TAM contracts. The key differentiator will be the ceiling price for eligible sellers, which will be capped at a range from ₹0 per kWh to ₹20 per kWh or any other price range specified by the Commission in the future.

During the hearing of the petition, the Commission not only admitted the request but also directed IEX to provide an extended two-week period for stakeholders to submit their comments and suggestions. Furthermore, IEX was instructed to respond to any additional comments within two weeks following the initial submission.

As a notable point, IEX reported that it did not receive any additional comments from stakeholders after the extension. However, initial feedback was received from several stakeholders, including the National Load Despatch Center (NLDC), Reliance Industries Limited, Prayas Energy Group, and JPL-Simhapuri Energy Ltd.

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According to IEX, the stakeholders expressed positive feedback and provided support for the introduction of High Price Contracts in the Intra Day, Day Ahead Contingency, and Term-Ahead Market segments, reflecting their enthusiasm for the proposed market expansion.

The Commission has carefully reviewed the submissions from IEX, along with the comments and suggestions of the stakeholders and NLDC, taking into account the response provided by IEX. Significantly, the stakeholders have welcomed the proposal as an additional platform for market participants and as a means to enhance competition. Notably, NLDC raised no objections concerning potential implications or operational difficulties related to the introduction of HP-ITD, HP-DAC & HP-TAM.

Consequently, the Commission has determined that it should grant approval to IEX’s proposal for the introduction of the High Price Bilateral Market segment. The decision to approve reflects the Commission’s commitment to fostering a dynamic and inclusive power market in India.

Furthermore, the Commission directed GRID-INDIA to prepare a report on the experience and performance of HP-TAM and HP-Contingency contracts within three months of their introduction. This report will be compiled after soliciting feedback from IEX and will help assess the impact of these innovative contracts.

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IEX has achieved a pivotal milestone in shaping the future of power trading in India. With the introduction of the High Price Segment, the power market becomes more dynamic, fostering greater inclusivity and competition. This development is expected to have a significant impact on the nation’s energy landscape.

Please read the document below for more details.

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