MoP floats proposal on high price market segment for DAM

In order to address the issue of high price in spot market in power exchanges, a price cap of Rs 12 per unit was introduced by the Central Electricity Regulatory Commission (CERC) in all the market segments of the power exchanges, in April 2022. The generators based on having high variable cost are unable to participate in this market. In this background, the Ministry of Power (MoP) has proposed to introduce a high price market segment (HP-DAM) within the existing integrated-day ahead market (I-DAM).

The sellers with variable cost greater than the price cap of spot of I-DAM market i.e., Rs. 12 per unit will be allowed to sell power in this market. These can be gas-based power plants, imported coal based power plants or any other entity that meets the variable cost eligibility criteria. A no objection certificate (NOC) will be provided to such sellers biannually through the nationalopen access registry (NOAR). The minimum bid price will be at 0 paise unit unit and maximum price can be decided based on the feedback from the stakeholders. This will be higher than the existing price cap for DAM. The segment can be operated in an integrated (parallel) manner. The sellers eligible for HP-DAM will be allowed to place bids in this product. The buyers will have an option of auto-carry their uncleared bids from DAM to HP-DAM. The buyers can also directly place bids in the HP-DAM. The bidding will take place between 10 AM and 12 PM. Power exchanges will send the provisional file to national load despatch center (NLDC) at 1:00 PM. NLDC will provide the transmission capacity by 2:00 PM. In case of congestion, the transmission corridor allocation will be first for green-DAM, then DAM, and last for HP-DAM. Power exchanges will send the final file to NLDC by 3:00 PM. NLDC/ regional load despatch center (RLDC) will publish the final schedule by 5:30 PM. The price discovery for HP-DAM will be double-sided closed auction. This will enable high cost power plant to be made available during the high demand period. Only such buyers who are in deficit and can afford to pay high price will be able to participate in this segment. The other buyers and consumers will not get affected. The ministry has sought comments on the proposal by August 21, 2022.

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