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CERC caps electricity exchange prices at Rs 12 per unit

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CERC caps electricity exchange prices at Rs 12 per unit

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Regulation 51 of PMR 2021 provides for circumstances requiring intervention of the CERC. The CERC had asked exchanges to submit the compliance with this direction within two days.

CERC caps electricity exchange prices at Rs 12 per unit
Indian power regulator has capped electricity exchange prices at Rs 12 per unit amid rising costs of imported coal and sure in power demand as the summer season has started.
"The commission, in exercise of powers under Regulation 51 (1) of Power Market Regulations 2021, directs the power exchanges until further orders, to re-design, with immediate effect, the bidding software so that members can submit their bids in the price range of Rs.0/kWh to Rs.12/kWh for Day-Ahead Market and Real-Time Market," the Central Electricity Regulatory Commission (CERC) said in a notification on April 1.
Regulation 51 of PMR 2021 provides for circumstances requiring intervention of the CERC. The CERC had asked exchanges to submit the compliance with this direction within two days.
The CERC said prices discovered at power exchanges have remained "significantly" higher during the past few days. It said factors like the rise in temperature causing early onset of summers and increase in economic activities with the lifting of COVID-19-related restrictions contributed significantly to the increase in electricity demand. On the other hand, the increase in the supply has been limited.
The commission said the situation had been aggravated due to geopolitical factors affecting the fuel supply and certain domestic supply constraints.
"This has widened the gap between demand and supply, with average, buy to sell bid ratio reaching more than 2 and market clearing price frequently touching Rs 20/kWh (which is the ceiling price imposed by exchange)," the CERC said.
Buy bids have been more than double of the sell bids, indicating higher demand and lower supply, the CERC said.
"Abnormally high prices at power exchanges, even for a short period, hurt consumers' interests and erode buyers' confidence in the market," it said.
The regulator said it had observed that power exchanges have designed the bidding software so that members can submit their bids in the price range of Rs 0/kWh to Rs 20/kWh. "In the present stressed scenario, where demand at power exchanges is nearly double the supply volume, buyers are putting buy bids at the maximum of the price range, i.e. Rs.20/kWh to ensure that their bids get cleared. This indicates a desperate buying scenario in the prevailing conditions," it said.
According to CERC, electricity demand has been increasing substantially in the month of March and touched 199 GW on 17-03-2022. Since then, it has been hovering around 195 GW.
 
 
 
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