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					</table><p>The Central Electricity Regulatory Commission (<a href="https://cercind.gov.in/" target="_blank" rel="noopener">CERC</a>)  has ordered a comprehensive audit of all three power exchanges in the next six months and the elimination of manual entries of bids and cancellation/modification of bids outside of trading hours, citing multiple violations.</p>
<p>In a suo motu order, the CERC said its staff will conduct an audit of the processes and software of all three power exchanges with the help of suitable agencies to ensure the provisions of Power Market Regulations 2021 are followed.</p>
<p>The audit will be completed within six months from the date of the order. The designated agencies must submit their report within three weeks of completion of the audit.</p>
<p>Based on the findings in the audit report, the Commission may issue further directions as deemed necessary.</p>
<p><strong>Background</strong></p>
<p>The CERC, through the Market Surveillance Committee (MSC) reports, identified that there was no uniformity in the contents of the reports submitted by the three power exchanges – <a href="https://www.iexindia.com/" target="_blank" rel="noopener">Indian Energy Exchange</a>, <a href="https://powerexindia.in/" target="_blank" rel="noopener">Power Exchange India</a>, and <a href="https://www.hpxindia.com/" target="_blank" rel="noopener">Hindustan Power Exchange</a>.</p>
<p>It observed that there have been instances of manual entry and cancellation of bids outside of trading hours and, in some cases, extension of market hours.</p>
<p>The CERC noted that in reports for Q1 2019-20 to Q3 2023-24, there has been an increasing trend of such instances, especially in 2022-23.</p>
<p>The exchanges, in their submission, cited reasons such as operational and communication issues, unavailability of workforce on a round-the-clock basis, and bids placed during non-office hours.</p>
<p>The CERC said it believes that accommodating such requests to enter bids on the members’ behalf can provide a potential breeding ground for market manipulation. It goes against the principle of anonymity and transparency of collective transactions.</p>
<p>In the past, the CERC had allowed members to cancel their bids after trading hours up to five times a year.</p>
<p>One of the power exchanges, in its Risk Assessment and Management Committee and MSC report, mentioned reasons like members facing difficulty in placing bids, non-installation of the latest software by some of the members, and events like policy restrictions (Payment Security restriction on DISCOMs) that led them to extend the trading hours.</p>
<p><strong>No Manual Bids</strong></p>
<p>The Commission noted that power exchanges must operate in a fair, transparent, and competitive manner to maintain the faith of market participants and stakeholders.</p>
<p>While being flexible in dealing with system exigencies and accommodating members’ requests, the Commission believes key elements of the double-sided closed auction process with uniform price discovery, like bid entry procedures and timelines, must be strictly complied with to avoid any market manipulation.</p>
<p>The Commission has ordered that there must be no manual entry of bids by power exchanges on behalf of their members within or outside of trading hours.</p>
<p>No bids must be accepted by the power exchanges after the trading hours.</p>
<p>The central regulator also directed the exchanges to build a robust system with end-to-end encryption of data from the trading workstation of members and the trading platform. This is to ensure that the entire trail of the bidding session, starting from submission till the end, is encrypted to ensure bid anonymity and market integrity is maintained.</p>
<p>The data must not be made available to anyone till bid matching and finalization of the results.</p>
<p>Power exchanges are to make necessary changes to their existing system and report compliance to the Commission.</p>
<p>Bids entered by a member of the exchange must be first checked against the availability of funds or collateral in the risk management system before being accepted in the bid book.</p>
<p>The Commission directed the exchanges to automate the process completely with no manual intervention. The need to re-run the provisional and final results due to the deletion of bids because of fund shortage must be eliminated. The exchanges must make the necessary changes to verify this at the very stage of entering bids.</p>
<p>The Commission withdrew its previous order, allowing cancellation of bids post trading hours, with immediate effect. The exchanges are to no longer entertain any requests for cancellation outside of trading hours in any of the collective market segments.</p>
<p>CERC has also restricted the modification of bids outside of trading hours. It has directed exchanges to design the software to capture any changes due to provisional or final results or congestion, separately from any modification done at the member level.</p>
<p>No extension of trading hours will be allowed except for cases where the system operator identifies a constraint.</p>
<p>The Commission directed the exchanges to train the market participants from time to time to enable the smooth submission of bids. The exchanges will be required to submit a report on the training sessions and awareness programs they conduct every six months.</p>
<p>They must ensure the latest version of the interface is made available on workstations and that the required infrastructure is in place.</p>
<p>The exchanges were also directed to align their respective Business Rules, Rules, and Bylaws according to the directions in the CERC order and submit the compliance report within two weeks.</p>
<p>Recently, the CERC <a href="https://www.mercomindia.com/cerc-market-coupling-shadow-pilot-power-exchanges" target="_blank" rel="noopener">authorized</a> a shadow pilot on power systems and cost optimization through a market coupling of various segments of all three energy exchanges.</p>
<p>In May last year, a committee of experts constituted by the Ministry of Power <a href="https://www.mercomindia.com/discoms-limiting-participation-power-exchanges" target="_blank" rel="noopener">noted</a> that the electricity market in India faces significant challenges that hinder the integration of renewable energy and limit the participation of DISCOMs in power exchanges.</p>
<p>Subscribe to Mercom’s real-time <a href="https://www.mercomindia.com/product/mercoms-renewable-energy-regulatory-updates" target="_blank" rel="noopener">Regulatory Updates</a> to ensure you don’t miss any critical updates from the renewable industry.</p>
<div class="saboxplugin-wrap" itemtype="http://schema.org/Person" itemscope itemprop="author"><div class="saboxplugin-tab"><div class="saboxplugin-gravatar"></div><div class="saboxplugin-authorname"><a href="https://cms.mercomindia.com/author/satish-shetty/" class="vcard author" rel="author"><span class="fn">Satish Shetty</span></a></div><div class="saboxplugin-desc"><div itemprop="description"><div class="designboxt">
<p><img class="alignleft" style="border-radius: 50%;height: 50px;margin-top: -4px;border: 1px solid #00b451" src="https://mercomindia.s3.ap-south-1.amazonaws.com/wp-content/uploads/2022/04/Satish-pic-1.jpg" width="50" /></p>
<p><strong style="text-decoration: underline">Satish Shetty,</strong> Associate Editor at Mercom India<br />
<a href="https://mercomindia.com/author/satish-shetty/" target="_blank" rel="noopener">More articles from Satish Shetty.</a></p>
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<div class="authorboxn"><img class="alignleft" src="https://mercomindia.s3.ap-south-1.amazonaws.com/wp-content/uploads/2022/04/Satish-pic-1.jpg" width="102" height="102" /><a href="https://mercomindia.com/author/satish-shetty/" target="_blank" rel="noopener"><strong style="color: #00b451">Satish Shetty</strong></a> is an Associate Editor with Mercom India. Prior to Mercom, Satish was a multimedia news producer at Reuters, where he gained experience in digital news media. Satish has his Bachelor of Arts (B.A.) degree in Broadcast Journalism from Limkokwing University of Creative Technology, Malaysia.<br />
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No Manual Bids, Follow Strict Trading Hours: CERC to Power Exchanges


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					</table><p>The Central Electricity Regulatory Commission (<a href="https://cercind.gov.in/" target="_blank" rel="noopener">CERC</a>) has authorized a shadow pilot on power systems and cost optimization through a market coupling of various segments of all three energy exchanges – <a href="https://www.iexindia.com/" target="_blank" rel="noopener">Indian Energy Exchange</a>, <a href="https://powerexindia.in/" target="_blank" rel="noopener">Power Exchange India</a>, and <a href="https://www.hpxindia.com/" target="_blank" rel="noopener">Hindustan Power Exchange</a>.</p>
<p>The shadow pilot will include three coupling methods – coupling of the Real-Time Market (RTM) segments across the three power exchanges, coupling of the RTM and Security Constrained Economic Dispatch (SCED) segments, and coupling of Day-Ahead Market of the three power exchanges for four months.</p>
<p>Market Coupling, as defined by the Commission, is a process under which collected bids from all the power exchanged are matched after taking into account all bid types to discover the uniform market clearing price for DAM or RTM or any other market as notified and subjected to market splitting.</p>
<p>It is expected to help optimize the use of the transmission infrastructure, maximize economic surplus considering all bid types, and create simultaneous buyer-seller surplus.</p>
<p>The CERC staff carried out several simulations using the bid data from the power exchanges to study the impact of market coupling on volume, prices, and economic surplus.</p>
<p><strong>Coupling in DAM and RTM segments</strong></p>
<p>Based on the results of simulations for coupling in DAM and RTM, the Commission identified the possibility of uncleared bids (buy and sell) getting cleared in a coupled scenario. However, the overall gains in terms of increase in volume and economic surplus may not be significant. The peak time blocks witnessed an increase in economic surplus in a coupled scenario, but over a longer time horizon, the gains remained insignificant. Further, the impact on MCP and volatility varies across different time durations depending on the elasticity of demand and supply curves.</p>
<p>The Commission finds these results broadly in conformity with the largely accepted view that under the prevailing market structure, where one dominant power exchange holds about 99% market share in DAM and RTM, merely coupling bids of all the power exchanges will not yield substantial improvement in market outcome.</p>
<p>Despite these findings, the Commission believed there are insights worth pursuing, such as increasing market depth, optimizing system cost, and enhancing power system reliability and flexibility. It feels it is important to increase participation in the market to improve supply availability and encourage competition. While coupling bids marginally contributes to this, CERC feels it is important the other alternatives should be explored.</p>
<p>The current power market is demand-driven, and bringing in commensurate supply is necessary to utilize market efficiency gains fully. A resource adequacy framework is being developed to ensure reliable and cost-effective supply, but in the meantime, existing capacity should be optimally utilized, the CERC said.</p>
<p><strong>RTM and SCED segment coupling</strong></p>
<p>Security Constrained Economic Dispatch (SCED) is an optimization method designed to maximize generation while maintaining a steady demand schedule. SCED is a controlled cost-based optimization metric, whereas RTM is an auction/price-based market segment. The Commission believes that pairing RTM with SCED will increase market depth and enhance power system cost optimization without adversely affecting SCED savings.</p>
<p>The Commission has proposed a coupling of Renewable Thermal Power (RTM) with Solar Cell Energy (SCED) to optimize the power system. The simulations showed that the maximum increase in cleared volume was around 1100 MW, and the price variation range was reduced by 5%. The average coupled MCP was lower than the dominant exchange&#8217;s average by Rs. 0.422/kWh.</p>
<p>The simulation also revealed potential benefits in terms of power system reliability, such as a reduction in ramping-related infeasibility, cheaper electricity generated by SCED generators, higher availability of spinning reserves, reduced cycling instructions to generators, and better congestion management.</p>
<p>The Commission believes that the proposed coupling of RTM with SCED could enable unutilized generation, serving unmet demand and resulting in significant cost optimization. The Commission plans to implement the model in a shadow pilot to determine the operational, market, and regulatory impacts on the existing system.</p>
<p><strong>Implementing Agency</strong></p>
<p>The CERC has appointed <a href="https://posoco.in/en/" target="_blank" rel="noopener">Grid India</a> as the implementing agency to run the shadow pilot in accordance with the procedure followed by the participating market segments after market hours.</p>
<p>It will also develop the necessary software to run the shadow pilot within two months from the order date.</p>
<p>The results of the shadow pilot run will not affect the price and volume discovery on the actual RTM and DAM segments and the final schedule and settlements.</p>
<p>The implementing agency will be required to frame operating procedures in consultation with the power exchanges and should cover operational aspects, the sharing of bids by power exchanges, uniform market price discovery, indicative revisions in schedules, and accounting.</p>
<p>Grid India and the power exchanges must establish reliable communication links to share the actual quantum and price offers received in the RTM and DAM for each session for both buy and sell bids after-market hours on each day.</p>
<p>Grid-India will aggregate the bids received from the power exchanges running the shadow pilot, i.e., for coupling RTM; for coupling RTM at exchanges with DC of generators in SCED considering technical constraints on the supply side and the requisition by the SCED beneficiaries on the demand side; and for coupling of DAM of the three power exchanges and run the algorithm.</p>
<p>The agency has to make sure the SCED demand is met under all the circumstances.</p>
<p>Grid-India will have to share its findings from running the shadow pilot through a monthly report for four months, encompassing details of bid volume, clearing volume and clearing price obtained block-wise, observations with empirical data on economic surplus, comparison of price discovery and cleared volume in the shadow pilot. They must also inform the Commission about any displacement of the bids offered at the power exchanges and changes in the schedule on account of the shadow pilot.</p>
<p>The feedback report will be available on Grid India’s website for stakeholders to access.</p>
<p>The agency must maintain the relevant data during the operation of the shadow pilot, including but not limited to installed and declared capacity, schedule and revisions, variable cost, quantum offered in RTM and DAM, and requisition by states/beneficiaries.</p>
<p>Based on the findings shared by Grid India and power exchanges on the shadow pilot, the Commission will decide whether it would create the regulatory framework for market coupling.</p>
<p>The Commission is concentrating on optimizing the power system and costs in RTM/SCED and DAM, with the goal of enhancing market depth by running DAM alongside Security Constrained Unit Commitment (SCUC). SCUC strives to secure appropriate system reserves by bringing off-bar producing stations back online or preventing on-bar generating stations from going down. Grid-India is required to conduct SCUC three days in advance and update requirements daily.</p>
<p>The Commission has directed Grid-India to design the appropriate software for the shadow pilot, deploy it for four months, discuss operational experience, and suggest the feasibility of coupling DAM and SCUC within two months.</p>
<p>Last May, a committee of experts constituted by the Ministry of Power <a href="https://www.mercomindia.com/discoms-limiting-participation-power-exchanges" target="_blank" rel="noopener">noted</a> that the electricity market in India faces significant challenges that hinder the integration of renewable energy and limit the participation of distribution companies in power exchanges.</p>
<p>Early last year, the CERC <a href="https://www.mercomindia.com/cerc-approves-iancillary-services-segment-power-exchanges" target="_blank" rel="noopener">approved</a> the introduction of the Tertiary Reserve Ancillary Services market segment on all three power exchanges.</p>
<div class="saboxplugin-wrap" itemtype="http://schema.org/Person" itemscope itemprop="author"><div class="saboxplugin-tab"><div class="saboxplugin-gravatar"></div><div class="saboxplugin-authorname"><a href="https://cms.mercomindia.com/author/satish-shetty/" class="vcard author" rel="author"><span class="fn">Satish Shetty</span></a></div><div class="saboxplugin-desc"><div itemprop="description"><div class="designboxt">
<p><img class="alignleft" style="border-radius: 50%;height: 50px;margin-top: -4px;border: 1px solid #00b451" src="https://mercomindia.s3.ap-south-1.amazonaws.com/wp-content/uploads/2022/04/Satish-pic-1.jpg" width="50" /></p>
<p><strong style="text-decoration: underline">Satish Shetty,</strong> Associate Editor at Mercom India<br />
<a href="https://mercomindia.com/author/satish-shetty/" target="_blank" rel="noopener">More articles from Satish Shetty.</a></p>
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<div class="authorboxn"><img class="alignleft" src="https://mercomindia.s3.ap-south-1.amazonaws.com/wp-content/uploads/2022/04/Satish-pic-1.jpg" width="102" height="102" /><a href="https://mercomindia.com/author/satish-shetty/" target="_blank" rel="noopener"><strong style="color: #00b451">Satish Shetty</strong></a> is an Associate Editor with Mercom India. Prior to Mercom, Satish was a multimedia news producer at Reuters, where he gained experience in digital news media. Satish has his Bachelor of Arts (B.A.) degree in Broadcast Journalism from Limkokwing University of Creative Technology, Malaysia.<br />
<a href="https://mercomindia.com/author/satish-shetty/" rel="noopener noreferrer">More articles from Satish Shetty.</a></div>
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CERC to Run Market Coupling Shadow Pilot on Power Exchanges


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					</table><p>The Central Electricity Regulatory Commission (<a href="https://cercind.gov.in/" target="_blank" rel="noopener">CERC</a>) has allowed Hindustan Power Exchange (<a href="https://www.hpxindia.com/" target="_blank" rel="noopener">HPX</a>) to introduce High Price contracts in the High Price Day Ahead Market (HP-DAM), High Price Term Ahead Market (HP-TAM), and High Price Contingency Contracts (HP-Contingency) segments.</p>
<p>The Commission, however, rejected the proposal for introducing HP-Day Ahead Contingency and HP-Intraday Contracts for hydropower generators.</p>
<p><strong>Background</strong></p>
<p>The Commission granted registration to HPX in 2021, allowing it to establish and operate a power exchange. It has since provided services in the  Contingency, Green Contingency Contracts, Renewable Energy Certificates, Integrated Day Ahead Market, and Real Time Market segments.</p>
<p>HPX filed a petition seeking the Commission&#8217;s approval to introduce High Price contracts in HP-DAM, HP-TAM, and HP-Contingency.</p>
<p>It had proposed the introduction of HP-TAM and HP-Contingency contracts alongside HP-DAM to ensure a level playing field and flexibility for market participants. It had suggested a floor price of ₹12 (~$0.15)/kWh for the High Price Market Segment to facilitate trading by high variable cost generators.</p>
<p>HPX had also requested permission to include a forbearance price in the contracts to accommodate its software&#8217;s matching mechanism effectively.</p>
<p>The HP-DAM contract specifications included collective transactions on a day-ahead basis, with eligible entities who are high-price sellers and are approved by the Commission. The price discovery and matching methodology was to follow the double-sided closed bidding process.</p>
<p>The HP-TAM contract proposals included daily, weekly, monthly, and any-day single-sided contracts.</p>
<p>The HP-Contingency includes day ahead and intra-day contracts for hydropower generators. Eligible entities will be high-price sellers approved by the Commission, and price discovery will follow continuous matching.</p>
<p>HPX proposed risk management mechanisms, pay-in and pay-out procedures, and default penalty/ for each contract type.</p>
<p>CERC approved HPX’s request to introduce high-price contracts in the HP-DAM, HP-TAM, and HP-Contingency. HPX was directed to serve a copy of the petition to the Grid Controller of India (Grid-India) and invite comments from stakeholders and the public through its website.</p>
<p>Grid-India provided comments, including suggestions for the eligibility of sellers in HP-DAM and concerns about introducing a floor price, stating it may not be in the interest of reliable grid operation.</p>
<p>The stakeholders&#8217; comments were positive, expressing support for HP-TAM and HP-Contingency contracts, providing additional avenues for trading power and fostering competition in the power market. Some stakeholders suggested reducing the additional margin for sellers extensively trading on the power exchange.</p>
<p><strong>Commission’s Analysis</strong></p>
<p>The contract specifications for HP-DAM were approved, including double-sided closed bidding and uniform market clearing price mechanisms, with a single bidding window from 10 am to 12 noon. The market clearing will occur sequentially, with GDAM cleared first, followed by DAM and HP-DAM. Participants will have the option to transfer unselected bids from DAM to HP-DAM with different prices specified.</p>
<p>For HP-TAM and HP-Contingency contracts, eligibility is granted to specific categories of high-cost generators, subject to periodic review by CERC. All entities eligible for power procurement through open access are eligible as buyers in HP-DAM. The process of standing clearance for eligible sellers was outlined, along with the need to specify the source of power in the clearance.</p>
<p>The Commission also directed HPX to include the collection of an initial margin at the time of bidding, which will be 5% of the order value for HP-Daily and HP-Weekly Contracts and 1% of the order value for HP-Monthly Contracts.</p>
<p>For HP-Any day single-sided contracts, sellers must provide an initial margin at the rate of ₹30,000 (~$365)/MW/month or part thereof. The Exchange will be allowed to collect an &#8216;additional margin&#8217; before the scheduling application is made to the Load Dispatch Centre.</p>
<p>The additional margin will vary based on the contract duration: 50% for contracts up to 7 days, 25% for contracts up to 15 days, and 20% for contracts beyond 15 days. In case of default, the collected margins will be utilized to compensate the counterparty. The margins will be collected in both cash and non-cash forms.</p>
<p>Regarding pricing, a floor price of zero was allowed for HP-DAM to avoid negative impacts on the renewable energy integration program. The forbearance price for HP-DAM was set at ₹20 (~0.24)/kWh until further orders.</p>
<p>The HP-TAM and HP-Contingency contracts aim to ensure a level playing field and improve competition in the power market. Introducing high-price market segments is consequential to the Commission&#8217;s introduction of price caps.</p>
<p>HP-TAM contracts will include daily, weekly, monthly, and any-day(s) single-sided contracts. The eligible high-cost generators for participation will be gas-based power plants using imported RLNG and naphtha, imported coal-based power plants using imported coal, and battery energy storage systems. The price discovery mechanism for HP-TAM contracts will include uniform price step auction and reverse auction.</p>
<p>HP-Contingency contracts will include High Price Day Ahead Contingency Contracts and High Price Intraday Contingency Contracts. The eligible entities for HP-Contingency contracts will be the same as for HP-DAM and HP-TAM. The contracts will have a floor price of zero and a forbearance price of ₹20 (~0.24)/kWh.</p>
<p>The Commission approved a minimum volume quotation equivalent to 1 MW in HP-TAM and HP-Contingency contracts.</p>
<p>The proposal for introducing HP-Day Ahead Contingency and HP-Intraday Contracts for hydropower generators was not approved by the Commission as it deemed the proposal did not seem to fulfill the requirement of having a separate high-price market segment.</p>
<p>The Commission also directed HPX to specify the penalty fines and penalties in the contract specifications and business rules to ensure transparency in risk management and informed decision-making for the market participants.</p>
<p>Earlier this year, the Commission <a href="https://www.mercomindia.com/cerc-hydropower-contracts-green-term-ahead-market-2" target="_blank" rel="noopener">approved</a> HPX&#8217;s plea for introducing hydropower contracts in the Green Term-Ahead Market beyond T + 11 days.</p>
<p>Subscribe to Mercom&#8217;s real-time <a href="https://mercomindia.com/product/mercoms-renewable-energy-regulatory-updates/" target="_blank" rel="noopener">Regulatory Updates</a> to ensure you don&#8217;t miss any critical updates from the renewable industry.</p>
<div class="saboxplugin-wrap" itemtype="http://schema.org/Person" itemscope itemprop="author"><div class="saboxplugin-tab"><div class="saboxplugin-gravatar"></div><div class="saboxplugin-authorname"><a href="https://cms.mercomindia.com/author/arjun-joshi/" class="vcard author" rel="author"><span class="fn">Arjun Joshi</span></a></div><div class="saboxplugin-desc"><div itemprop="description"><div class="designboxt">
<p><img class="alignleft" style="border-radius: 50%;height: 50px;margin-top: -4px;border: 1px solid #00b451" src="https://mercomindia.s3.ap-south-1.amazonaws.com/wp-content/uploads/2022/04/Arjun-Joshi-1.png" width="50" /></p>
<p><strong style="text-decoration: underline">Arjun Joshi,</strong> Staff reporter at Mercom India<br />
<a href="https://mercomindia.com/author/arjun-joshi/" target="_blank" rel="noopener">More articles from Arjun Joshi.</a></p>
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<p><img class="alignleft" src="https://mercomindia.s3.ap-south-1.amazonaws.com/wp-content/uploads/2022/04/Arjun-Joshi-1.png" width="86" height="102" /><a href="https://mercomindia.com/author/arjun-joshi/" target="_blank" rel="noopener"><strong style="color: #00b451">Arjun Joshi</strong> </a>is a staff reporter at Mercom India. Before joining Mercom, he worked as a technical writer for enterprise resource software companies based in India and abroad. He holds a bachelor’s degree in Journalism, Psychology, and Optional English from Garden City University, Bangalore. <a href="https://mercomindia.com/author/arjun-joshi" target="_blank" rel="noopener">More articles from Arjun Joshi.</a></p>
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CERC Allows HPX to Start High Price Contracts in Three Segments


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					</table><p>The Central Electricity Regulatory Commission (<a href="https://cercind.gov.in/" target="_blank" rel="noopener">CERC</a>) has approved the introduction of the Tertiary Reserve Ancillary Services (TRAS) market segment on all three power exchanges.</p>
<p>TRAS are frequency control ancillary service capacities that are used to keep the grid frequency in the designated range. It comprises qualified power plants, energy storage systems, and interruptible loads readily available for dispatch to restore the secondary reserve and cover variations of renewable energy generations.</p>
<p>The Commission also directed the power exchanges to incorporate provisions in their bye-laws, rules, and business rules concerning the Ancillary Services market segment on their platform and submit them to the Commission for records within a week.</p>
<p>Further, the Central Commission noted that the TRAS framework was scheduled to be made effective from May 1, 2023. However, the Commission decided to give more time to the National Load Despatch Center (NLDC) and the power exchanges to align and test the processes involved in the bidding, information exchange, and price discovery to ensure a smooth rollout of the TRAS from June 1, 2023.</p>
<p>Hindustan Power Exchange (HPX), Power Exchange of India (<a href="https://powerexindia.in/" target="_blank" rel="noopener">PXIL</a>), and Indian Energy Exchange (<a href="https://www.iexindia.com/" target="_blank" rel="noopener">IEX</a>) had filed separate petitions for the introduction of ancillary services on the platforms.</p>
<p><strong>Background</strong></p>
<p>CERC notified the Ancillary Services Regulations on January 31, 2022. The operation of the Ancillary Services Regulations 2022, except for certain provisions about TRAS, came into effect on December 5, 2022. Subsequently, the provisions related to TRAS were notified with an effective date of April 1, 2023.</p>
<p>The Commission later changed the date to May 1, 2023.</p>
<p>The three major exchanges presented their arguments regarding implementing TRAS in their respective petitions.</p>
<p>HPX had sought to introduce ancillary services contracts in Day-Ahead Market (DAM) and Real-Time Market (RTM) contracts on its trading platform to implement the provisions about TRAS.</p>
<p>HPX argued that Order Carry Forward (OCF) basis from Integrated Day Ahead Market (I-DAM) to Ancillary Service Day Ahead Market (AS-DAM) would effectively render the AS-DAM and AS-RTM market segments anti-competitive and hinder market penetration.</p>
<p>Adhering to the OCF mechanism would limit trading to the liquid exchange, leaving stakeholders with no alternative but to engage exclusively in these specific segments. This could result in an unintentional concentration of bidding activity on one power exchange without any clear stakeholder advantages.</p>
<p>According to PXIL, the AS Regulations 2022 provide guidelines for determining prices in TRAS-Up and TRAS-Down. However, there needs to be an indication in the regulations about the approach market participants should take when placing orders to participate in the TRAS market.</p>
<p>PXIL argued that the power exchange platform is responsible for soliciting bids from market participants for TRAS-Up and TRAS-Down contracts and forwarding the bids to the nodal agency for price discovery. This requires &#8216;PRATYAY,&#8217; PXIL’s trading platform, to operate 24/7 and maintain full exchange infrastructure availability to collect and transmit bid information.</p>
<p>According to IEX, implementing a distinct price cap of ₹12 (~$0.147)/kWh for DAM and RTM and ₹50 (~$0.611)/kWh for the ancillary services market would enable sellers to exploit arbitrage opportunities.</p>
<p>This could incentivize generators to prioritize capacity allocation in the market to increase revenue, potentially exacerbating supply and demand imbalances and driving up energy prices. IEX recommended that the ancillary services market should have two segments with price caps of ₹12 (~$0.147)/kWh and ₹50 (~$0.611)/kWh, similar to the energy market.</p>
<p><strong>Commission&#8217;s analysis</strong></p>
<p>The Commission observed that introducing TRAS through a market-based mechanism would play a critical role in ensuring the power system&#8217;s smooth operation and the grid&#8217;s safety and security while providing a new avenue for market participants under the ancillary services mechanism.</p>
<p>The Commission noted that it was crucial to recognize the inherent differences between the ancillary services market and the energy market. Unlike the energy market, the ancillary services market was characterized by less certainty of dispatch due to its reliance on grid conditions, despite the availability of commitment charges for transactions.</p>
<p>CERC acknowledged that the OCF mechanism effectively promotes participation in the ancillary services market. By doing so, TRAS providers could provide the reserve capacity required for grid stability and security without affecting energy market availability.</p>
<p>The Commission directed that the bids placed under TRAS-DAM should be subject to the same price caps as applicable for the energy segment of I-DAM. Additionally, bids placed under TRAS-RTM will be subject to the same price caps as TRAS-DAM.</p>
<p>The central regulator noted that settlement in the ancillary services market should be retained by NLDC for operational convenience as it performs essential functions in the ancillary services market, such as assessing TRAS requirements, determining prices, and dispatching instructions to TRAS providers.</p>
<p>It added that the ancillary services market needed detailed examination.</p>
<p>The Commission has already directed its staff to examine all the factors that have a bearing on transaction fees, including the risks involved in power exchange operations.</p>
<p>The Commission approved introducing the TRAS market segment on all three power exchanges from June 1, 2023.</p>
<p>Recently, CERC <a href="https://www.mercomindia.com/changes-power-exchanges-bidding-software" target="_blank" rel="noopener">directed</a> all power exchanges to redesign their bidding software to allow members to quote prices within a specified range for different types of contracts. The Commission said that redesigning the bidding software would reduce the cost of power for buyers while also providing an opportunity for high-cost generators and willing buyers to participate in the High Price Day Ahead Market (HP-DAM) market.</p>
<p>Subscribe to Mercom&#8217;s real-time <a href="https://mercomindia.com/product/mercoms-renewable-energy-regulatory-updates/" target="_blank" rel="noopener">Regulatory Updates</a> to ensure you don&#8217;t miss any critical updates from the renewable industry.</p>
<div class="saboxplugin-wrap" itemtype="http://schema.org/Person" itemscope itemprop="author"><div class="saboxplugin-tab"><div class="saboxplugin-gravatar"></div><div class="saboxplugin-authorname"><a href="https://cms.mercomindia.com/author/rakesh-ranjan-parashar/" class="vcard author" rel="author"><span class="fn">Rakesh Ranjan</span></a></div><div class="saboxplugin-desc"><div itemprop="description"><div class="designboxt">
<p><img class="alignleft" style="border-radius: 50%;height: 50px;margin-top: -4px;border: 1px solid #00b451" src="https://mercomindia.s3.ap-south-1.amazonaws.com/wp-content/uploads/2022/02/Rakesh-Headshot-crop-2.jpg" width="50" /></p>
<p><strong style="text-decoration: underline">Rakesh Ranjan,</strong> Staff reporter at Mercom India<br />
<a href="https://mercomindia.com/author/rakesh-ranjan-parashar/" target="_blank" rel="noopener">More articles from Rakesh Ranjan.</a></p>
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<p><img class="alignleft" src="https://mercomindia.s3.ap-south-1.amazonaws.com/wp-content/uploads/2022/02/Rakesh-Headshot-crop-2.jpg" width="77" height="102" /><a href="https://mercomindia.com/author/rakesh-ranjan-parashar/" target="_blank" rel="noopener"><strong style="color: #00b451">Rakesh Ranjan</strong></a> is a staff reporter at Mercom India. Prior to joining Mercom, he worked in many roles as a business correspondent, assistant editor, senior content writer, and sub-editor with bcfocus.com, CIOReview/Silicon India, Verbinden Communication, and Bangalore Bias. Rakesh holds a Bachelor’s degree in English from Indira Gandhi National Open University (IGNOU). <a href="https://mercomindia.com/author/rakesh-ranjan-parashar/" rel="noopener noreferrer">More articles from Rakesh Ranjan.</a></p>
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CERC Approves Introduction of Ancillary Services Segment on Power Exchanges


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					</table><p>The Central Electricity Regulatory Commission (<a href="https://cercind.gov.in/" target="_blank" rel="noopener">CERC</a>) has approved Hindustan Power Exchange’s (<u><a href="https://www.hpxindia.com/" target="_blank" rel="noopener">HPX</a></u>) plea for the introduction of hydropower contracts in the Green Term-Ahead Market (GTAM) beyond T + 11 days.</p>
<p>The Commission directed HPX to incorporate the appropriate provisions in its by-laws, rules, and business rules and submit them to it within two weeks.</p>
<p>HPX had filed a petition to facilitate hydropower purchase obligation (HPO) compliance of obligated entities.</p>
<p><strong>Background</strong></p>
<p>Currently, HPX offers day-ahead contracts, intraday contracts, day-ahead contingency contracts, real-time contracts, and term-ahead contracts for trading electricity.</p>
<p>It had sought the regulator’s approval to introduce hydropower contracts in green contingency, GTAM contracts, and long-duration contracts (daily, weekly, monthly, and any day) in TAM and GTAM contracts.</p>
<p>The Commission had on February 24, 2022, <a href="https://mercomindia.com/cerc-hydropower-contracts-green-term-ahead-market/" target="_blank" rel="noopener">approved</a> hydropower contracts in GTAM on the Indian Energy Exchange (IEX).</p>
<p>As per <a href="https://powermin.gov.in/" target="_blank" rel="noopener">Ministry of Power</a> guidelines, HPO may be met from power procured from eligible large hydropower projects commissioned on and after March 8, 2019, and up to March 31, 2030.</p>
<p>HPX submitted that in the proposed hydro GTAM contracts, participants would be able to transact across all periods including intra-day, day-ahead contingency, daily, and weekly which is currently allowed for the existing GTAM.</p>
<p>The Power System Operation Corporation (POSOCO), in its reply, said that hydro being a flexible resource forms an important part of the portfolio for buying utilities.</p>
<p>For scheduling of hydropower, it is preferable to have long-term and medium-term access which will not only ensure adequate revenue and long-term commitment but would also allow the use of hydropower for critical grid balancing close to real-time, POSOCO added.</p>
<p><strong>Commission’s analysis</strong></p>
<p><strong> </strong>The Commission approved the proposal to introduce monthly contracts, existing daily contracts, weekly contracts, and any-day single-sided contracts with modified timelines for pre-specified time blocks notified to the market participants in advance.</p>
<p>It also approved the delivery duration from T+2 to T+90 days for daily contracts, and from TW+1 to TW+12 weeks for weekly contracts.</p>
<p>Further, the regulator also extended the time period from TM+1 to TM+3 months for monthly contracts, and T+2 to T+90 days for any day single-sided contracts, wherein T denotes the zero-day of trading, TW denotes the zero-week of trading and TM denotes the zero-month of trading.</p>
<p>Further, it said that the capacity offered as a sell bid in the power exchange under the daily, weekly, monthly and any day single-sided contracts from a resource in the same time block would be separate and non-overlapping. Non-compliance of the same by any of the parties to the transaction would lead to its debarment as a member or client.</p>
<p>In June last year, CERC <a href="https://mercomindia.com/cerc-approves-month-ahead-contracts-power-exchange-india/" target="_blank" rel="noopener">approved</a> Power Exchange India’s (PXIL) proposal to introduce delivery-based monthly contracts, which can be traded on one-month, two-month, and three-month ahead basis in conventional and renewable energy segments of the term-ahead market.</p>
<p>Earlier, CERC had <a href="https://mercomindia.com/cerc-approves-green-day-ahead-contracts-on-energy-exchanges/" target="_blank" rel="noopener">approved</a> the introduction of the Green Day Ahead Contract (GDAC) at IEX and PXIL in the Integrated Day Ahead Market (IDAM) in a restricted manner.</p>
<p>Subscribe to Mercom’s real-time <a href="https://mercomindia.com/product/mercoms-renewable-energy-regulatory-updates/" target="_blank" rel="noopener">Regulatory Updates</a> to ensure you don’t miss any critical updates from the renewable industry.</p>
<div class="saboxplugin-wrap" itemtype="http://schema.org/Person" itemscope itemprop="author"><div class="saboxplugin-tab"><div class="saboxplugin-gravatar"></div><div class="saboxplugin-authorname"><a href="https://cms.mercomindia.com/author/rakesh-ranjan-parashar/" class="vcard author" rel="author"><span class="fn">Rakesh Ranjan</span></a></div><div class="saboxplugin-desc"><div itemprop="description"><div class="designboxt">
<p><img class="alignleft" style="border-radius: 50%;height: 50px;margin-top: -4px;border: 1px solid #00b451" src="https://mercomindia.s3.ap-south-1.amazonaws.com/wp-content/uploads/2022/02/Rakesh-Headshot-crop-2.jpg" width="50" /></p>
<p><strong style="text-decoration: underline">Rakesh Ranjan,</strong> Staff reporter at Mercom India<br />
<a href="https://mercomindia.com/author/rakesh-ranjan-parashar/" target="_blank" rel="noopener">More articles from Rakesh Ranjan.</a></p>
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<p><img class="alignleft" src="https://mercomindia.s3.ap-south-1.amazonaws.com/wp-content/uploads/2022/02/Rakesh-Headshot-crop-2.jpg" width="77" height="102" /><a href="https://mercomindia.com/author/rakesh-ranjan-parashar/" target="_blank" rel="noopener"><strong style="color: #00b451">Rakesh Ranjan</strong></a> is a staff reporter at Mercom India. Prior to joining Mercom, he worked in many roles as a business correspondent, assistant editor, senior content writer, and sub-editor with bcfocus.com, CIOReview/Silicon India, Verbinden Communication, and Bangalore Bias. Rakesh holds a Bachelor’s degree in English from Indira Gandhi National Open University (IGNOU). <a href="https://mercomindia.com/author/rakesh-ranjan-parashar/" rel="noopener noreferrer">More articles from Rakesh Ranjan.</a></p>
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CERC Allows Hydropower Contracts in Green Term-Ahead Market on HPX


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					</table><p>Mercom India conducted a series of exclusive interviews with top executives from the renewable energy sector, bringing out their insights and opinions on the industry and the way forward.</p>
<p>Here is a look back at some of the impactful interviews covering solar inverters, robotic cleaning, the grid, the short-term market, and the evolving Commercial and Industrial (C&amp;I) segment.</p>
<p><a href="https://mercomindia.com/vibrant-energy-green-hydrogen-foray-ci-footprint-interview/" target="_blank" rel="noopener"><strong>The Growing C&amp;I Segment and Green Hydrogen Ambitions: Vibrant Energy</strong></a></p>
<p>In a video interview, Srinivasan Viswanathan, CEO of <a href="https://www.vibrantenergyholdings.com/index" target="_blank" rel="noopener">Vibrant Energy</a>, spoke about the company’s contribution to the growing renewable energy transition in the nation’s C&amp;I segment, recent developments, key trends, and the company’s plan to pivot towards a green hydrogen ecosystem.</p>
<p>Viswanathan said that helping the C&amp;I segment adopt renewable energy is in the company&#8217;s DNA. The company aims to work with corporates across India to support their decarbonization agenda by developing a significant pipeline of project capacity at a state level to deliver Intra and inter-state transmission systems connected to clients. He said that one of the company’s key strategies is to provide round-the-clock renewables and green energy attributes through wind-solar hybrid projects.</p>
<p>He spoke about Vibrant’s green hydrogen ambitions, &#8220;We are actively exploring opportunities to deliver green hydrogen and green ammonia to our clients. The interesting part is that almost 75% of the cost of green hydrogen is power, which we offer, providing us the advantage of delivering green hydrogen at competitive rates.”</p>
<p><a href="https://mercomindia.com/interview-storage-technology-boost-the-short-term-energy-market/" target="_blank" rel="noopener"><strong>Short-Term Market Trading: Hindustan Power Exchange (HPX)</strong></a></p>
<p>Naveen Singh, Head of Business Development &amp; Policy Advocacy, <a href="https://www.hpxindia.com/" target="_blank" rel="noopener">HPX India</a>, shared insights on how the new platform would contribute to the growing short-term exchange market.</p>
<p>Singh said that HPX would help promote market efficiency through the use of advanced technology and by maximizing the power market value.</p>
<p>According to him, the cutting-edge technology solution, efficient price mechanism, and quality of service offered at HPX would act as the differentiator in the Indian power market.</p>
<p>About the evolving demand in the market, he said, “We have witnessed a shift wherein the traditional supporters of long-term contracts are shifting more towards the short-term markets and power exchanges, which gives a more real-time flavor to the entire procurement, rather than a long-term contract which may have lost its relevance. We feel this trend would continue, and more and more procurement would happen through longer duration tradable contracts over power exchanges as against the fixed long-term legacy contracts. Besides this, RE integration challenges and the technological breakthroughs in storage would also necessitate a higher dependence on short-term markets, particularly exchanges, in the coming years.”</p>
<p><a href="https://mercomindia.com/smarter-grid-efficient-clean-energy-transition-ge-interview/" target="_blank" rel="noopener"><strong>A Smarter Grid for Efficient Transition of Clean Energy: GE</strong></a></p>
<p>Deepak Pandey, Director of Business Operations for <a href="https://www.gegridsolutions.com/" target="_blank" rel="noopener">GE</a>’s South Asia ‘Digital Grid’ Business, discussed the key technology innovations driving the future of the electricity grid.</p>
<p>Regarding the grid stability situation due to the planned 500 GW of non-fossil fuel-sourced power, Pandey said, “Renewable energy, especially solar and wind, is not constant, controllable, or predictable, and there may be a sudden increase or drop during the day. This poses a big threat to the grid’s stability and resiliency. Smart grid management systems are available to address these challenges with accurate generation forecasting, controllers to govern energy fluctuations, alternate energy resources for dampening variations, and provision for storage (battery/hydro/thermal storage).”</p>
<p>Pandey also spoke about GE’s contribution to the grid evolution in the country. “GE is a key stakeholder in providing digital grid solutions for all segments of the electric grid, be it generation, transmission, distribution, or consumption. More than 50% of the transmission of power in the country is being monitored and controlled by GE’s technology. GE has established more than 80 control centers in India and neighboring countries for monitoring and managing the power transmission network.”</p>
<p><a href="https://mercomindia.com/video-interview-robotic-solar-module-cleaning/" target="_blank" rel="noopener"><strong>The Need for Robotic Cleaning for Solar Modules: Ecoppia</strong></a></p>
<p>Nalin Kumar Sharma, the President of <a href="https://www.ecoppia.com/" target="_blank" rel="noopener">Ecoppia</a> for the Asia-Middle East &amp; Pacific regions, in an exclusive video interview with Mercom India, spoke about the application and the future of robotics in the Indian solar sector. He also laid out in detail Ecoppia’s products and their plans for the coming years.</p>
<p>Sharma said, “With the labor costs increasing by 9% to 10% yearly, project costs in India have seen a considerable rise, leading to more Independent Power Producers (IPPs) opting for robotic cleaning. Another driving factor is water scarcity across the country, as water for basic necessities will always be prioritized over cleaning solar panels. Over time, robots have also managed to provide a better return on investments within five years and manage costs over the project&#8217;s life. Our clients have been able to offer competitive tariffs post the adoption of robotics in their operation.”</p>
<p><a href="https://mercomindia.com/sungrow-solar-inverter-production-capacity-in-india/" target="_blank" rel="noopener"><strong>Solar Inverter Market: Sungrow India</strong></a></p>
<p>Mercom spoke to Sunil Badesra, Country Head, <a href="https://en.sungrowpower.com/" target="_blank" rel="noopener">Sungrow India</a>, to discuss the company’s plans and his perspective on the growing solar inverter business in India.</p>
<p>Badesra said, “Sungrow achieved over 4.2 GW supply in 2021 and a cumulative shipment of more than 12 GW with a market share of nearly 35%. We expected the Indian market to operate somewhere around 7-8 GW per year when we put up our 3 GW plant four years ago. However, due to various factors affecting the solar sector last year, we saw that figure exceed the 9 GW mark. We are optimistic that India’s solar market will do much better in the coming years. We have decided to increase the factory’s capacity from 3 to 10 GW. “</p>
<p>“The past two years have seen more and more string inverters with enhanced technology coming into the market, and the share of string inverters has gradually increased to 50%. Even with recent technological advancements, solar efficiency still has a long way to go. Despite its recent rise, the industry still has many obstacles. The efficiency, dependability, environmental implications, and reliance on government regulations require improvements. An inverter is also one of the significant components which we cannot ignore, along with the other BoS items. This kind of motivation is crucial for suppliers like us,” he further added.</p>
<div class="saboxplugin-wrap" itemtype="http://schema.org/Person" itemscope itemprop="author"><div class="saboxplugin-tab"><div class="saboxplugin-gravatar"></div><div class="saboxplugin-authorname"><a href="https://cms.mercomindia.com/author/satish-shetty/" class="vcard author" rel="author"><span class="fn">Satish Shetty</span></a></div><div class="saboxplugin-desc"><div itemprop="description"><div class="designboxt">
<p><img class="alignleft" style="border-radius: 50%;height: 50px;margin-top: -4px;border: 1px solid #00b451" src="https://mercomindia.s3.ap-south-1.amazonaws.com/wp-content/uploads/2022/04/Satish-pic-1.jpg" width="50" /></p>
<p><strong style="text-decoration: underline">Satish Shetty,</strong> Associate Editor at Mercom India<br />
<a href="https://mercomindia.com/author/satish-shetty/" target="_blank" rel="noopener">More articles from Satish Shetty.</a></p>
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<div class="authorboxn"><img class="alignleft" src="https://mercomindia.s3.ap-south-1.amazonaws.com/wp-content/uploads/2022/04/Satish-pic-1.jpg" width="102" height="102" /><a href="https://mercomindia.com/author/satish-shetty/" target="_blank" rel="noopener"><strong style="color: #00b451">Satish Shetty</strong></a> is an Associate Editor with Mercom India. Prior to Mercom, Satish was a multimedia news producer at Reuters, where he gained experience in digital news media. Satish has his Bachelor of Arts (B.A.) degree in Broadcast Journalism from Limkokwing University of Creative Technology, Malaysia.<br />
<a href="https://mercomindia.com/author/satish-shetty/" rel="noopener noreferrer">More articles from Satish Shetty.</a></div>
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Mercom’s Most Impactful Interviews in 2022 – Here’s What Clean Energy Experts Said


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					</table><p>The Renewable Energy Certificates (RECs) trading on Wednesday saw a clearing price of ₹1,000 (~$12.08)/REC being discovered in the first session at the Indian Energy Exchange (IEX) after the implementation of the new REC regulations issued by the Central Electricity Regulatory Commission (<a href="https://cercind.gov.in/" target="_blank" rel="noopener">CERC</a>).</p>
<p>A total of 487,356 RECs were traded during the session, a 31.01% increase from last month’s 372,000 <a href="https://mercomindia.com/renewable-energy-trading-at-iex-12-weighted-average-price-rebounds/" target="_blank" rel="noopener">traded</a> at the same clearing price.</p>
<p>CERC issued ‘Terms and Conditions for Renewable Energy Certificates for Renewable Energy Generation Regulations, 2022,’ effectively removing the floor and ceiling prices for RECs for the first time.</p>
<p>The exchange is yet to provide the non-solar and solar bifurcation for the RECs traded during the session.</p>
<p>In a recent order, the Delhi High Court <a href="https://mercomindia.com/delhi-high-court-suspends-rec-trading-for-six-weeks/" target="_blank" rel="noopener">suspended</a> the trading of RECs issued before October 31, 2022, for six weeks.</p>
<p>The order came in response to Indian Wind Power Association Northern Region Council’s petition challenging the new regulations.</p>
<p>As per the order, only RECs issued in November were traded during this session, which meant the demand would be short-supplied.</p>
<p>The rise in trading numbers, regardless of the shortage in supply due to the suspension, shows the increase in demand as distribution companies and other exchange entities strive to meet their RPO targets for the current financial year ending in March 2023.</p>
<p>The suspension is expected to be lifted by the second week of February, closer to the end of the financial year, when most trading entities have set their renewable purchase obligation targets for.</p>
<p>While the court said it would reconsider the petitions on January 31, 2023, it refused to stay the regulations.</p>
<p>On the new trading platform, Hindustan Power Exchange, the trading was limited to primarily non-solar RECs traded at a clearing price of ₹1,000 (~$12.08)/REC, with 85,805 RECs traded during the session.</p>
<p>Just this month, the CERC also <a href="https://mercomindia.com/central-regulator-multifold-jump-rec-administrative-fees/" target="_blank" rel="noopener">announced</a> massive surges in the applicable charges for various services involved in REC trading to help fund the agencies to upgrade infrastructure.</p>
<p>Industry experts suggest the decision would impact both buyers and sellers in the market, especially the small entities with cash-flow issues.</p>
<p>The REC trading was recently reinstated in November last year.</p>
<div class="saboxplugin-wrap" itemtype="http://schema.org/Person" itemscope itemprop="author"><div class="saboxplugin-tab"><div class="saboxplugin-gravatar"></div><div class="saboxplugin-authorname"><a href="https://cms.mercomindia.com/author/satish-shetty/" class="vcard author" rel="author"><span class="fn">Satish Shetty</span></a></div><div class="saboxplugin-desc"><div itemprop="description"><div class="designboxt">
<p><img class="alignleft" style="border-radius: 50%;height: 50px;margin-top: -4px;border: 1px solid #00b451" src="https://mercomindia.s3.ap-south-1.amazonaws.com/wp-content/uploads/2022/04/Satish-pic-1.jpg" width="50" /></p>
<p><strong style="text-decoration: underline">Satish Shetty,</strong> Associate Editor at Mercom India<br />
<a href="https://mercomindia.com/author/satish-shetty/" target="_blank" rel="noopener">More articles from Satish Shetty.</a></p>
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<div class="authorboxn"><img class="alignleft" src="https://mercomindia.s3.ap-south-1.amazonaws.com/wp-content/uploads/2022/04/Satish-pic-1.jpg" width="102" height="102" /><a href="https://mercomindia.com/author/satish-shetty/" target="_blank" rel="noopener"><strong style="color: #00b451">Satish Shetty</strong></a> is an Associate Editor with Mercom India. Prior to Mercom, Satish was a multimedia news producer at Reuters, where he gained experience in digital news media. Satish has his Bachelor of Arts (B.A.) degree in Broadcast Journalism from Limkokwing University of Creative Technology, Malaysia.<br />
<a href="https://mercomindia.com/author/satish-shetty/" rel="noopener noreferrer">More articles from Satish Shetty.</a></div>
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REC Trading Jumps 31% with Clearing Price of ₹1,000 Under New Regulations


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					</table><p>The Central Electricity Regulatory Commission (<a href="https://cercind.gov.in/" target="_blank" rel="noopener">CERC</a>) has granted time for one more year from August 15, 2022, for power exchanges to align their clearing and settlement system to the Payment and Settlement Systems Act (PSSA) 2007.</p>
<p>It directed the staff at the Commission to examine the issues involved in carrying out the clearing and settlement per the PSSA 2007, in consultation with the Ministry of Finance and the Reserve Bank of India (RBI), and draw a roadmap for implementation of the same as per Regulation 27 of the Power Market Regulations (PMR) 2021.</p>
<p><strong>Background</strong></p>
<p>In 2008, the Commission granted Indian Energy Exchange Limited (IEX) and Power Exchange India Limited (PXIL) permission to set up and commence power exchange operations.</p>
<p>The Commission notified Power Market Regulations 2021 on August 15, 2021. Regulation 12(5) provided that the power exchanges were required to realign their bye-laws, rules, and business rules per the PMR 2021 and to seek approval of the same within six months of enforcement of the regulations.</p>
<p>As required, all the registered exchanges realigned their draft bye-laws, rules, and business rules and submitted them for the approval of the Commission.</p>
<p>Regulation 27(1) of PMR 2021 states that the power exchanges which have been granted registration before the regulations would be required to carry out the clearing and settlement mechanism per PSSA 2007 within one year.</p>
<p>PSSA 2007 provides that the payment and settlement-related activities of the exchanges would be under the purview of the RBI.</p>
<p>PXIL, in its submission, stated that the procedure for settlement of transactions on the power exchanges was similar to that of settlement of transactions on stock exchanges and commodity exchanges which were excluded from the applicability of PSSA 2007. The power exchanges have distinct contracts, including their clearing and settlement. Moreover, RBI was yet to evolve guidelines for regulating the clearing and settlement function of electricity transactions.</p>
<p>IEX submitted that given the overlapping of regulations, power exchanges should be exempted from the applicability of PSSA 2007. IEX requested that the Commission should allow it to continue to carry on the clearing and settlement function as per the existing arrangement till clarity is achieved concerning the PSSA 2007.</p>
<p>Hindustan Power Exchange (HPX) presented that the RBI was yet to issue any framework or guidelines regulating clearing and settlement functions of power exchanges. As such, it was impossible to ensure compliance with Regulation 27(1) without such a framework.</p>
<p><strong>Clarity required </strong></p>
<p>The Commission noted that carrying out the clearing and settlement by the power exchanges per the PSSA 2007 required clarity.</p>
<p>The Commission approved the extension of time for the power exchanges to align their clearing and settlement system to the PSSA 2007 for one more year from August 15, 2022.</p>
<p>In June this year, CERC <a href="https://mercomindia.com/cerc-methodology-price-discovery-hindustan-power-exchange/" target="_blank" rel="noopener">directed</a> the Hindustan Power Exchange to use the ‘Uniform Price Step Auction’ as a matching methodology for price discovery in daily and weekly contracts. It also directed the exchange to use open auction for ‘Uniform Price Step Auction’ so that the participants, while bidding for these contracts, can make informed decisions after seeing buy and sale bids offered by other anonymous participants.</p>
<p>Earlier, CERC had <a href="https://mercomindia.com/cerc-orders-power-exchanges/" target="_blank" rel="noopener">directed</a> the power exchanges to re-design their bidding software so that members can submit their buy bids at the maximum price of ₹12 (~$0.16)/kWh for Day-Ahead Market and Real-Time Market.</p>
<p>Subscribe to Mercom’s real-time <a href="https://mercomindia.com/product/mercoms-renewable-energy-regulatory-updates/" target="_blank" rel="noopener">Regulatory Updates</a> to ensure you don’t miss any critical updates from the renewable industry.</p>
<div class="saboxplugin-wrap" itemtype="http://schema.org/Person" itemscope itemprop="author"><div class="saboxplugin-tab"><div class="saboxplugin-gravatar"></div><div class="saboxplugin-authorname"><a href="https://cms.mercomindia.com/author/rakesh-ranjan-parashar/" class="vcard author" rel="author"><span class="fn">Rakesh Ranjan</span></a></div><div class="saboxplugin-desc"><div itemprop="description"><div class="designboxt">
<p><img class="alignleft" style="border-radius: 50%;height: 50px;margin-top: -4px;border: 1px solid #00b451" src="https://mercomindia.s3.ap-south-1.amazonaws.com/wp-content/uploads/2022/02/Rakesh-Headshot-crop-2.jpg" width="50" /></p>
<p><strong style="text-decoration: underline">Rakesh Ranjan,</strong> Staff reporter at Mercom India<br />
<a href="https://mercomindia.com/author/rakesh-ranjan-parashar/" target="_blank" rel="noopener">More articles from Rakesh Ranjan.</a></p>
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<p><img class="alignleft" src="https://mercomindia.s3.ap-south-1.amazonaws.com/wp-content/uploads/2022/02/Rakesh-Headshot-crop-2.jpg" width="77" height="102" /><a href="https://mercomindia.com/author/rakesh-ranjan-parashar/" target="_blank" rel="noopener"><strong style="color: #00b451">Rakesh Ranjan</strong></a> is a staff reporter at Mercom India. Prior to joining Mercom, he worked in many roles as a business correspondent, assistant editor, senior content writer, and sub-editor with bcfocus.com, CIOReview/Silicon India, Verbinden Communication, and Bangalore Bias. Rakesh holds a Bachelor’s degree in English from Indira Gandhi National Open University (IGNOU). <a href="https://mercomindia.com/author/rakesh-ranjan-parashar/" rel="noopener noreferrer">More articles from Rakesh Ranjan.</a></p>
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Power Exchanges Allowed Time to Implement Clearing and Settlement Mechanism


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					</table><p>The Solar Energy Corporation of India (SECI) was created in 2011 to implement the National Solar Mission and ensure robust project development.</p>
<p>SECI, through its various tenders, has played a significant role in mitigating the risk of power offtake by distribution companies (DISCOMs) across the country.</p>
<p>The agency has been framing innovative and targeted tenders to address the challenges unique to renewable energy to meet the requirements of consumers through third-party sale and DISCOMs.</p>
<p>At an exclusive session by SECI in Mercom India’s Solar Summit 2022 on July 28 in New Delhi, panelists AK Sinha, AGM, <a href="https://www.seci.co.in/">SECI</a>, Manish Karna, Head of Business Development, <a href="https://www.adanigreenenergy.com/" target="_blank" rel="noopener">Adani Green Energy</a>,  and Naveen Singh, Head of Business Development and Policy Advocacy, <a href="https://www.hpxindia.com/" target="_blank" rel="noopener">HPX India</a>, discussed SECI’s new-age tenders.</p>
<p>The session was moderated by Priya Sanjay, Managing Director, Mercom India.</p>
<p><strong>Innovative tenders</strong></p>
<p>Sinha said, “SECI has been one of the biggest implementers of renewable energy. We plan to implement approximately 15-20 GW annually. We are aiming for a more stable, dispatchable power source for which hybrid is usually the norm, and then you have round-the-clock with storage. At SECI, we request a certain amount of output and then let you choose the renewable components to derive that output, whether wind, solar, or storage. Whenever tenders are to be published with SECI, the pre-bid suggestions usually lead to many changes in the original request for selection (RfS) before it becomes a tender with the primary focus on grid stability, which then leads to innovative tenders.”</p>
<p>“This way, we ensure that consumers and generators feel their requirements are met. Communicating with DISCOMs to understand their exact requirements is crucial to speeding up the power purchase agreement (PPA) signings. The structural part of the tenders is important as most DISCOMs look for assured power. We might see the PPA durations reduce from 25 years to just 5, 10, and 15 soon,” he said.</p>
<p>According to Karna, hybrid and RTC projects fit the quotient perfectly when it comes to optimizing the system, which helps manage the transmission and meet the demand curve of DISCOMs. “SECI’s hybrid tenders help utilize the resources and assets up to 70-75% ensuring maximum optimization. Even when power is offered to a consumer, one should never offer just standalone wind or solar or even just hybrid or just storage but a mix of it all aiming for a stable supply. SECI effectively allows asset owners to meet buyers directly and acts as the medium, like ride-hailing services.”</p>
<p>Singh said price signals in the exchanges drive the market for SECI tenders. “At HPX, we have covered approximately 33% of the Term-Ahead Market, which is expected to go up to 36% in the future. With innovative tenders, consumers can procure actual energy than just RECs to meet their green energy requirements. We at HPX don’t have 100% green energy procurement options available yet, but we can help meet a certain percentage of that requirement for green power.”</p>
<p><strong>Hybrid plus storage</strong></p>
<p>Sinha believes that hybrid with storage options is the way to go. He said individual solar and wind energy options may not continue unless they meet a specific consumer-specific requirement. “With SECI tenders, we take care of end-to-end tasks and ensure every aspect is covered. With renewable energy, an ecosystem needs to be built but taking the first step is always risky, which is where SECI comes into the picture. With wind energy, we still face challenges as solar has set the tariffs very low, making it difficult to find off-takers for wind. Our first-ever standalone battery storage tender has received a positive response, which encourages us to initiate more such projects.”</p>
<p>Karna felt that hybridization would help deliver a better product to the consumers. SECI should realize that the demand is not only from the DISCOMs but also from captive users and the dispatch centers. Tenders to cater to these demanding consumers must also be introduced.</p>
<p>DISCOMs were slowly shaking off the belief that they have surplus power, making them more accepting of renewable power sources. “We have seen 17 GW of PPAs signed this year alone. We also have seen non-conventional with storage touching the capacity utilization factor (CUF) of 70%, which is as good as thermal. It must be considered as complementing and not competing,” he said.</p>
<p>Singh spoke about merchant power plants that are expected in the future. He said they currently find it challenging to get funding from financing institutions. “It might just work if IT companies are okay to purchase power at a higher price. Innovation is a challenge in exchanges we plan to bring along with long-duration contracts to boost merchant power plants. In SECI tenders, whenever there is a surplus left behind, exchanges come into play to utilize and trade it effectively.”</p>
<p>In April this year, SECI <a href="https://mercomindia.com/seci-invites-bids-for-1-gwh-standalone-battery-energy-storage/" target="_blank" rel="noopener">issued</a> a request for selection to set up pilot projects of 500 MW/1000MWh standalone battery energy storage systems (BESS) under a build, own, operate, and transfer (BOOT) model.</p>
<p>Previously, SECI <a href="https://mercomindia.com/seci-short-term-working-capital/" target="_blank" rel="noopener">sought</a> quotations for a short-term working capital credit facility of up to ₹5 billion (~$62.78 million). The credit facility can be in the form of a standby letter of credit, letter of credit, or bank guarantee.</p>
<div class="saboxplugin-wrap" itemtype="http://schema.org/Person" itemscope itemprop="author"><div class="saboxplugin-tab"><div class="saboxplugin-gravatar"></div><div class="saboxplugin-authorname"><a href="https://cms.mercomindia.com/author/satish-shetty/" class="vcard author" rel="author"><span class="fn">Satish Shetty</span></a></div><div class="saboxplugin-desc"><div itemprop="description"><div class="designboxt">
<p><img class="alignleft" style="border-radius: 50%;height: 50px;margin-top: -4px;border: 1px solid #00b451" src="https://mercomindia.s3.ap-south-1.amazonaws.com/wp-content/uploads/2022/04/Satish-pic-1.jpg" width="50" /></p>
<p><strong style="text-decoration: underline">Satish Shetty,</strong> Associate Editor at Mercom India<br />
<a href="https://mercomindia.com/author/satish-shetty/" target="_blank" rel="noopener">More articles from Satish Shetty.</a></p>
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<div class="authorboxn"><img class="alignleft" src="https://mercomindia.s3.ap-south-1.amazonaws.com/wp-content/uploads/2022/04/Satish-pic-1.jpg" width="102" height="102" /><a href="https://mercomindia.com/author/satish-shetty/" target="_blank" rel="noopener"><strong style="color: #00b451">Satish Shetty</strong></a> is an Associate Editor with Mercom India. Prior to Mercom, Satish was a multimedia news producer at Reuters, where he gained experience in digital news media. Satish has his Bachelor of Arts (B.A.) degree in Broadcast Journalism from Limkokwing University of Creative Technology, Malaysia.<br />
<a href="https://mercomindia.com/author/satish-shetty/" rel="noopener noreferrer">More articles from Satish Shetty.</a></div>
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