Regulator asks power exchanges to cap bid prices as demand surges
The Central Electricity Regulatory Commission (CERC) has instructed power exchanges to cap the bid price range at Rs 12 per kWh for the Day Ahead Market (DAM) and Real Time Market segments. (RTM).
CERC has ordered power exchanges to redesign the bidding software to allow bids in the price range of Rs 0-12 per kWh.
According to the Commission, the power exchanges have designed the bidding software in such a way that members can submit bids within the price range of Rs 0-20 per kWh.
“The Commission, in the exercise of powers under Regulation 51(1) of the PMR 2021, directs power exchanges until further notice to redesign, with immediate effect, the tendering software in a manner that members can submit bids within the price range of Rs 0 per kWh to Rs 12 per kWh for DAM and RTM,” CERC said in an order dated April 1.
“The Commission is of the view that this price moderation will be in line with current market realities and will not have a significant impact on the volume processed and will safeguard the interests of consumers.”
According to the Commission, the prices discovered on the electricity exchanges have remained significantly high over the past few days.
“Factors such as rising temperature causing the early onset of summers and increased economic activities with the lifting of Covid-related restrictions have contributed significantly to the increased demand for electricity,” he said. he declared.
On the other hand, he indicated that the increase in supply has been limited.
“The situation has further worsened due to geopolitical factors affecting fuel supply and some domestic supply constraints. This has widened the gap between demand and supply, with the average buy-sell ratio reaching more than 2 and a market clearing price (MCP) frequently touching Rs 20 per kWh.
“It goes without saying that such a high price, even for a short period, without a significant impact on the increase in supply, not only goes against the interest of consumers, but also erodes the confidence of the buyer in the credibility of the market.”
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