Central Electricity Regulatory Commission (CERC), it is reliably learnt, has given its in-principle approval to Indian Energy Exchange (IEX) for introducing a new trading instrument “Green Daily Ahead Contract” (GDAC) on the exchange.
IEX had proposed the introduction of GDAC on its day-ahead market (DAM) segment to provide avenues to existing and prospective renewable energy generators for sale of renewable energy through power exchanges and to provide additional options to obligated entities to fulfill their Renewable Purchase Obligations (RPO).
In its order dated October 17, 2021, CERC has approved the proposal of IEX to introduce GDAC in a restricted manner, and subject to various directions outlined in the order. CERC has also directed IEX to incorporate appropriate provisions in its bye-laws, rules and business rules, with respect to introduction of GDAC. IEX has been directed to submit these new provisions to CERC within a period of two weeks, which is around October 31, 2021.
It may be mentioned that in July 2021, IEX had uploaded on its website the proposal of introducing GDAC, with a view to soliciting public feedback. It is learnt that comments were received from entities like Prayas Energy Group, CLP Wind Farms India Pvt Ltd, NTPC and Maharashtra State Electricity Distribution Ltd (MSEDCL).
All the four entities generally supported the plan and concurred that the introduction of such a contract would provide an alternate avenue for buyers and sellers to transact in renewable energy, and as such, would promote renewable energy in the country.
Nevertheless, some important issues were raised by the aforementioned four entities, and other stakeholders. Issues raised included those relating to certification process for sellers participating in GDAC, RPO fulfillment through GDAC, consideration of hydropower participation in GDAC, waiver of ISTS charges for GDAC transactions, etc.
Power Systems Corporation Ltd (POSOCO), which manages the National Load Dispatch Centre (NLDC), also submitted its comments to IEX’s proposal of introducing GDAC. POSOCO’s observations were largely on finer technicalities of GDAC trading, and included subjects like portfolio sales of renewable energy by discoms, etc.
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In its detailed order, CERC analyzed the suggestions given by various stakeholders and by POSOCO, along with the responses furnished by IEX. CERC also directed IEX to carry out specific changes in its bye-laws prior to the introduction of GDAC.
As mentioned earlier, CERC directed IEX to incorporate appropriate provisions in its bye laws, rules and business rules with respect to introduction of GDAC and submit to the Commission for records within two weeks from October 17, 2021 — the date of order.