CERC Approves PXIL’s Plan To Introduce High Price Day-Ahead Market (HP-DAM)

The Central Electricity Regulatory Commission (CERC), in its order on a petition filed by the Power Exchange India Limited (PXIL) on Tuesday, approved its demand for the introduction of the High Price Day Ahead Market (HP-DAM). 

PXIL had earlier sought approval from the CERC to introduce the HP-DAM on PXIL’s PRATYAY Platform. CERC first heard the petition on January 19, 2023, and second on March 28, 2023. PXIL had claimed that as the regulatory body had already allowed the introduction of HP-DAM on the IEX platform, the same should be done in this case too.

It claimed that introducing HP-DAM was essential for PXIL to facilitate the participation of high variable cost generators, which might otherwise be unable to participate in DAM due to the prevailing price cap. IEX, on the other hand, had got the approval for introducing the proposed HP-DAM through an order dated February 16, 2023. 

“We are of the view that the introduction of HP-DAM in the Integrated Day Ahead Market (I-DAM) segment on PXIL’s PRATYAY platform may provide a new avenue to the high variable cost generators which may not have been able to participate in DAM due to the existing price ceiling. Price cap in the Power Exchange transactions was introduced to balance the interest of buyers while at the same time ensuring that suppliers get adequately compensated but (especially infra-marginal generators) do not get undue benefits in situations of high demand and shortage of supply. However, it is equally important to ensure that such price caps do not drive away the high-cost generators from the market,” the CERC order said. 

“In the light of the analysis and decision on the various issues arising out of the proposal for introduction of HP-DAM at PXIL’s PRATYAY platform, the Commission hereby approves the proposal of the Petitioner to introduce HP-DAM segment in the Integrated DAM subject to compliance of the directions as stated above,” CERC said in its order while approving PXIL. 

The CERC also mentioned as it recently asked all power exchanges to redesign their bidding software for the period after April 4, 2023, to allow the members to quote the price in the range of Rs 0/Kwh to Rs 20/Kwh in the HP-DAM segment, PXIL would also have to abide by this order and price rate.