The Central Electricity Regulatory Commission (CERC) on Thursday extended the price cap of ₹12 per kilowatt hour (kWh), or unit, on all market segments at power exchanges till December 31, 2022.

In April, May and July this year, the regulator had ordered a cap on prices at various market segments on power exchanges. The last cap will end on September 30.

The extension for another three months is to cater to the rising demand as the festival season approaches and to meet the rising electricity demand due to the approaching winter months.

The commission, with a view to protecting consumer interests, has decided to extend the applicability of the directions in its Suomotu order from May 6, 2022, to December 31, 2022, the order said.

Accordingly, the regulator has directed all operational power exchanges to continue to operate their software in such a way that members can quote prices in the range of ₹0-12 per kWh in DAM (including GDAM), RTM, Intra-day, Day Ahead Contingency, and Term-Ahead (including GTAM) Contracts, it added.

Rising demand

“As per the emerging demand-supply situation in the power sector, it is expected that despite the fall in temperature, high demand for electricity, particularly from household and industrial consumers, is likely to continue over the next few months, mainly due to the festival season and pressure emanating from lighting and heating loads. Moreover, agricultural load will persist over the next few months on account of harvesting of kharif crops and sowing of winter crops,” CERC said in its review findings.

Domestic coal stock seems to be well positioned as compared to last year’s period from October to December 2021. However, as per the past trend, it is expected that generation from hydro and wind will start decreasing from October onwards, which is likely to exert pressure on coal stocks, it added.

On the activity at power exchanges, the regulator pointed out that peak demand has been fluctuating and touched 199 gigawatts (GW) on September 7. Based on the past trend, it is expected that the peak demand (morning and evening peaks) would remain significant due to the lighting and heating load in the winter months.

“During the last 3 months, the market clearing price (MCP) of ₹12 per kWh in DAM has generally been discovered during the evening hours from 18:30 hrs onwards. From September 15, 2022 onwards, morning and evening peaks in MCP are being observed in DAM at IEX. These peaks are anticipated to become steeper during the winter season,” CERC said in its observation.

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