The central government has launched a high price day ahead market (HP-DAM) and surplus power portal (PUShP), an initiative to ensure greater availability of power during the peak demand season.
Last year, the Central Electricity Regulatory Commission (CERC) had put a price cap of Rs 12 per unit on the exchanges, effective from April 01, 2022. In view of this, gas-based power plants, imported coal-based plants and the renewable energy stored in battery-energy storage systems could not be brought into operation, as their generation cost was high. This year it is expected that the demand will be much higher than last year, therefore, these plants will need to be scheduled. Hence, a separate segment, called the HP-DAM, has been carved out for generation systems where the cost of generating power may cross Rs 12 per unit.
Meanwhile, the surplus power portal is a one-of-its-kind initiative. Discoms have tied up long term power purchase agreements (PPAs) for power supply, and have to pay fixed charges even when they do not schedule the power. The discoms will now be able to indicate their surplus power in block times, days and months on portal. Those discoms which need power will be able to requisition the surplus power. The new buyer will pay both variable charge and fixed cost as determined by the regulators. Once power is reassigned, the original beneficiary will have no right to recall as entire fixed cost liability is also shifted to the new beneficiary. Financial liability of new buyer will be limited to quantum of temporary allocated or transferred power. This will reduce the fixed cost burden on the discoms, resultantly utilising all the available generation capacity.