The Central Electricity Regulatory Commission (CERC) has extended the price cap of ₹12 per kilowatt hour (kWh) on market segments at power exchanges until further orders as cold wave conditions lifted peak demand to 200 gigawatts (GW) last week.

The Commission, in a suo motu order, directed all operational power exchanges to continue operating their software “until further orders” in such a way that members can quote price in the range of ₹0 to ₹12 per kWh in day ahead market(DAM), including GDAM, real time market (RTM), intra-day, day-ahead contingency and term-ahead (including GTAM) contracts.

The regulator observed that peak demand, which hovered at 186 GW in October and November, rose to 200 GW on December 23 as cold wave conditions led to higher demand for heating, besides rising industrial activity.

Furthermore, with declining power generation from hydro and wind from October 2022, it is likely to exert pressure on existing thermal stocks to meet the energy requirements.

Cold wave conditions

The regulator said that in the day ahead market on the Indian Energy Exchange (IEX), the market clearing price (MCP) of ₹12 per kWh was discovered from 1800 hrs to 2000 hrs in October and November. In December (till December 26, 2022), the MCP of ₹12 has been observed from 1630 hrs to 1945 hrs, along with the morning peak from 0700 hrs to 0945 hrs.

“These peaks are anticipated to become steeper as cold wave conditions prevail in the northern and north-western parts of India,” it pointed out.

During October-December (till December 26), the percentage time MCP touched the ceiling price (₹12/kWh) in DAM on IEX has reduced as compared to the previous months. However, a steep increase has been observed in the last few days of December. Similar trend has also been observed in the RTM on IEX, it added.

“Based on the analysis of month-wise data for the past few years, it is observed that both energy requirement and peak demand remained higher in 2022-23 and the trend is likely to continue in the coming months mainly due to lighting and heating load, and increase in industrial activity,” the CERC observed.

Preparations for FY24

Moreover, as per the report on 20th Electric Power Survey of India published by Central Electricity Authority (CEA) in November 2022, the regulator said, adding the all-India peak electricity demand for FY24 is projected to be around 230 GW.

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