The Central Electricity Authority (CEA) has submitted its comments on the Draft Order in Suo-Motu Petition No. 8/SM/2024 issued by the Central Electricity Regulatory Commission (CERC) on October 4, 2024. The CEA has published these comments on November 6, 2024.
It may be recalled that the CERC’s draft order proposed several changes to the short-term power market, including modifications to the Term Ahead Market, Any Day Single Side Double Auction, Intraday Market, and Day Ahead Contingency Market. In response to these proposals, the CEA has furnished it comments.
Key Points from CEA’s Comments
1. Term Ahead Market (TAM)
The CEA observed that a significant portion of bids in TAM are submitted close to the auction deadline, potentially limiting competition and transparency.
The availability of hourly products in TAM can lead to non-standard bids, reducing competition and market efficiency.
The CEA recommends limiting the number of trading days for monthly, weekly, and daily contracts to improve liquidity and competition.
It also proposes a time extension mechanism for last-minute bids to ensure fair competition.
2. Day Ahead Contingency (DAC) Market:
The CEA noted that the low liquidity in the DAC market can lead to non-competitive transactions.
Hence, it recommends switching to a uniform price step auction mechanism to improve competition and transparency.
It also recommends dividing the DAC trading window into multiple sessions to enhance liquidity.
3. Intraday Market:
The CEA has agreed with the CERC’s proposal to withdraw intraday contracts due to low liquidity and the availability of the Real-Time Market.
Overall, the CEA’s comments emphasize the need for standardized contracts, increased transparency, and improved competition in the short-term power market. By implementing these recommendations, the CERC can enhance the efficiency and fairness of the power market in India.
