Hindustan Power Exchange Ltd (HPX) has got approval from the Central Electricity Regulatory Commission (CERC) for the introduction of high price contracts.
In a release, HPX said that CERC approval for high-price contracts is applicable in three key markets – High Price Day Ahead Market (HP-DAM), High Price Term Ahead Market (HP-TAM), and High Price Contingency Contracts.
As a part of this development, HPX will now offer these contracts in the High Price Day Ahead Market and High Price Term Ahead Market segments. The move comes as a part of the Commission’s efforts to further enhance market dynamics, deepen the market, and provide more opportunities for members to manage their risk and optimize their energy portfolios. The High Price Contingency Contracts will provide added stability to the energy market during periods of volatility, the HPX release said.
Also read: HPX Crosses 2.5 BU Of Cumulative Trade Volume
The HP-DAM pricing has been established with a floor price of zero to mitigate any adverse impact on the integration of renewable energy in the national grid. Simultaneously, the forbearance price has been set at Rs.20/kWh as per the Commission’s suo moto order dated March 31, 2023 in Petition 4/SM/2023.
With the fresh alternative of HP-TAM these high price generators can plan for sale of their power to interested beneficiaries under longer term contracts of up to 90 days. This would give them an opportunity to secure fuel supply in advance and plan their operations basis the underlying contracts, moving away from the sole dependency on clearance in the DAM segment.
