CERC Retains Market Clearing Price Cap of ₹12/kWh in Exchanges for Now

The decision comes in the wake of the increase in electricity demand

December 29, 2022


The Central Electricity Regulatory Commission (CERC) passed a suo motu order retaining the ₹12 (~$0.14)/kWh price cap on power exchanges till further notice to ensure that prices didn’t rise disproportionately as a result of the increasing lighting and heating needs along with industrial activity in the north and northwestern India due to intense cold weather.

The order said that all power exchanges would allow the price cap to operate in the Day-Ahead Market (DAM), including the Green Day-Ahead Market (GDAM), Real-Time Market (RTM), Intraday, Day-Ahead Contingency, and Term-Ahead Contracts, until further notice.


The Commission had passed an order, which was valid until June 30, 2022, directing the power exchanges to redesign their software so that members could quote a price in the range of ₹0/kWh to ₹12 (~$0.14)/kWh.

An extension was given from July 1, 2022, to September 30, 2022, and later extended to December 31, 2022.

Commission’s analysis

It observed that in DAM on the Indian Energy Exchange (IEX), the market clearing price of ₹12 (~$0.14)/kWh was discovered from 1800 hrs to 2000 hrs in October and November. Until December 26, 2022, the maximum market clearing price was observed between 1630 hrs and 1945 hrs, as well as the morning peak of 0700 hrs to 0945 hrs.

The Commission noted that these peaks would become steeper as cold weather intensifies in north and northwestern India.

The last few days of December saw a steep increase, with 23 blocks touching the maximum price of ₹12 (~$0.14)/kWh on December 26. A similar trend was also observed in the RTM on IEX.

According to an analysis of data from the past few years by the Central Electricity Regulatory Commission (CERC), energy demand and peak demand remained higher in FY 2022-23. This trend is expected to continue in the coming months.

The peak demand reached 187 GW in October and November 2022. However, it increased in December and touched 200 GW on December 23.

CERC said that the domestic coal stock level from October 2022 to December 2022 remained well-positioned compared to the same period last year. However, hydro and wind generation came down from October, which is likely to exert pressure on existing thermal stocks.

Accordingly, the Commission directed the power exchanges to continue to operate their software until further orders so that members could quote a price with a cap of ₹12 (~$0.14)/kWh.

The GDAM traded 288 MU volume in November with a weighted average price of ₹4.31 ($0.053)/ kWh, up 7.2% MoM. The market saw participation from 178 entities during the month, with the highest number of participants in a single day at 125.

The GTAM traded 66 MU volume during the month. The average monthly price for solar was ₹5.01 ($0.061)/ kWh, up 33%; for non-solar, it stood at ₹5.66 ($0.069)/kWh, up 3.9% MoM.

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