Five Takeaways From CERC’s Short-Term Power Market Report

Five Takeaways From CERC's Short-Term Power Market Report

The Central Electricity Regulatory Commission (CERC) has published its annual report on the short-term electricity market for 2023-24. The report sheds light on the growth of the short-term market in the country, the rise of power transactions through power exchanges, and other topics.

Following are the five main takeaways from the report-

1. Short-term market is limited by expanding

The CERC report said that the short-term market though comprising merely 12.5% of the total electricity market in India, has expanded since 2009-10. The report said that the growth of the short-term market was higher than the growth in gross electricity generation.

“Of the total electricity generated in India in 2023-24, the short-term power market comprised about 12.5%. The balance 87.5% of generation was procured mainly by distribution companies through long-term contracts and short-term intra-state transactions. From 2009-10 to 2023-24, the volume of short-term transactions of electricity & DSM volume increased at a higher rate (CAGR of 8.9%) when compared with the gross electricity generation (CAGR of 6.0%,” the report said.

2. Size of short-term market pegged at 162.51 BU 

The report said that in terms of volume the total size of the short term market and DSM (Deviation Settlement Mechanism) stood at 194.35 BU in 2022-23 but increased to 218.22 BU in 2023-24. However, excluding DSM and bilateral transactions, the volume of electricity transacted stood at 162.51 BU in 2023.24.

“In monetary terms, the size of this segment of the short-term market was ₹100729 crore in the year 2023-24, which was about 19% more than the year 2022-23,” the report said.

3. Power transactions through power exchanges expanding

The CERC report said that the volume of electricity transactions through power exchanges like IEX or PXIL is rising.

“The volume of electricity transacted through power exchanges increased at a CAGR of 22.4%, and the volume of electricity transacted through traders increased at a CAGR of 3.1% from 2009-10 to 2023-24,” the report said.

Talking about the average trading prices at power exchanges, the report said, “The weighted average price of electricity transacted through power exchanges was ₹5.82/kWh and through trading licensees it was ₹7.33/kWh in 2023-24. The corresponding values for the year 2022-23 were ₹6.25/kWh and ₹5.85/kWh, respectively,” the report said.

4. Price-competitive day-ahead market

The report also talked about the various competitive rates at which the power was traded at the power exchanges at the day-ahead market and the Green Day Day-ahead market.

“In Day Ahead Market at IEX, during 2023-24, 66% of the volume of electricity was transacted at a price less than ₹5/kWh, while 81% of the volume was transacted at a price less than ₹9/kWh. In case of PXIL, 2% of the volume of electricity was transacted at a price less than ₹5/kWh and 6% of the volume was transacted at less than ₹9/kWh. In case of HPX, there was no transactions at less than ₹9/kWh.

It also added, “In Green Day Ahead Market at IEX, during 2023-24, 68% of the volume of electricity was transacted at a price less than ₹5/kWh, while about 86% of the volume was transacted at a price less than ₹9/kWh. There was no trade in G-DAM segment on PXIL and HPX.”

5. Open access consumers avg price–Rs 3.76/unit

The report said that the weighted average price of electricity bought by open access consumers at IEX was ₹3.76/kWh, which was lower as compared to the weighted average price of the total electricity transacted through IEX (₹5.10/kWh), i.e., through day-ahead, green day-ahead, high price-day ahead & real-time markets.

“The weighted average price of electricity bought by open access consumers though PXIL (₹7.39/kWh), was lower compared to weighted average price of the total electricity transacted though PXIL (₹10.23/kWh) in 2023-24. In case of HPX, the weighted average price of electricity bought by open access consumers (₹10.00/kWh), was slightly higher compared to weighted average price of the total electricity transacted though HPX (₹9.98/kWh) in 2022-23,” the report said.