Government launches High Price Day Ahead Market and Surplus Power Portal

In order to provide increased power availability during the period of highest demand, the Central Government has developed a High Price Day Ahead Market and Surplus Power Portal (PUShP). In the presence of more than 200 stakeholders from state governments and the power sector, Union Power and NRE Minister R.K. Singh recently launched the platform during a virtual event in New Delhi.

A large number of senior Ministry of Power officials, including Krishan Pal Gurjar, Minister of State for Electricity and Heavy Industries; Alok Kumar, Secretary; Ghanshyam Prasad, Chairman, CEA; S. N. Goel, CMD, IE; and S.R. Narsimhan, CMD, Grid India, were present.

The Ministry of Electricity instructed the CERC to set a price cap of ₹ 12 on the power exchange last year after noticing that on some days the rates had risen to ₹ 20. This was done to prevent profiteering. The cap was implemented in the Day Ahead and Real Time Markets starting on April 1, 2022, and in all other divisions starting on May 6, 2022. This action made the pricing more reasonable for buyers.

The power produced by using gas was expensive—more than ₹ 12 per unit—and this capacity could not be sold on the market due to the high pricing of gas on the global market. Similarly, because of their high generation costs, imported coal-based facilities and renewable energy stored in battery energy storage systems could not be made operational.

This year’s demand is expected to be significantly higher than last year’s, necessitating the scheduling of gas- and imported coal-based plants. As a result, a separate segment has been designated for those generation systems where the cost of producing electricity from gas, imported coal, or renewable energy sources plus storage may exceed ₹ 12. HP DAM is the name of this particular division.

R.K. Singh, the Union Power Minister, said that the HP-DAM was a component of the larger plan to make sure that all power capacity is used to supply electricity to customers. No one would be permitted to impose unreasonable fees. Only generating units with power production costs greater than ₹ 12 per unit will be permitted to operate in HP-DAM. Generators must only supply power in the Integrated Day Ahead Market (I-DAM) of the Power Exchange with a ceiling price of ₹ 12 if the cost of production is less than ₹ 12.

He asked the CEA and Grid Controller to ensure that pricing in the HP-DAM is fair and to take the necessary steps to prevent power producers from charging extravagant prices that are significantly more than the cost of production. In contrast to several affluent nations, where electricity prices were last year significantly higher than the cost of production, India’s power market was fairly steady.

The surplus power portal is a ground-breaking initiative that showcases the Ministry of Electricity and the Regulator’s creativity. For the supply of power, distribution companies have contracted with long-term PPAs. Even when they don’t schedule the power, they still have to pay fixed fees. The DISCOMs can now display their excess power in block periods, days, or months on the portal. The surplus power might be requested by the DISCOMs that require it.