The Central Electricity Regulatory Commission (CERC) has proposed revisions to the regulations governing power trading on power exchanges in India. These revisions are proposed through a public notice dated October 4, 2024.
The CERC oversees the power market and regularly reviews the performance of different market segments and contracts. This review aims to ensure efficient and transparent power trading practices. These changes focus on two key areas:
- Contingency Contracts and
- Term-Ahead Market (TAM) contracts.
I. Contingency Contracts
The commission proposes to review the continuation of Contingency Contracts in light of their performance and the introduction of alternative options like Real-Time Markets (RTM).
Additionally, CERC also proposes to withdraw Intra-Day Contracts in all the Power Exchanges.
If Contingency Contracts are to continue, the CERC proposes to switch the price discovery mechanism from “Continuous Matching” to “Uniform Price Step Auction” for improved transparency.
Until amendments are finalized, power exchanges must enhance bid visibility by allowing participants to view all buy and sell orders for 10 minutes before order execution. Additionally, exchanges must publish data on the number and volume of bids submitted, not just traded volumes.
II. Term-Ahead Market (TAM) Contracts
Power exchanges will be required to offer pre-specified time slots for TAM contracts, including Base/RTC, Peak, Off-Peak, and Night.
For Green TAM contracts, power exchanges will have flexibility to pre-define slots based on the generation profile of different renewable energy technologies.
In light of these proposals, CERC is inviting comments and suggestions from power exchanges and interested stakeholders on the proposed changes. Stakeholders can submit their feedback by November 4, 2024. The comments/ suggestions/ objections may be sent to the Secretary, Central Electricity Regulatory Commission, 7th Floor, Tower B, World Trade Centre, Nauroji Nagar, New Delhi110029 or may be mailed to secy@cercind.gov.in and ashutosh.sharma@nic.in
Impact of the Changes
These proposed revisions aim to improve efficiency and transparency in power trading. The revisions also seek to reduce market fragmentation by potentially removing Intra-Day Contracts, which have low liquidity. Additionally, the proposals shall cater to the specific needs of renewable energy sources through tailored TAM contracts.
