CERC cuts price cap in power exchanges, move likely to help Tangedco

The Central Electricity Regulatory Commission (CERC) has reduced the price cap on power purchase from exchanges, a move which is likely to benefit the Tamil Nadu Generation and Distribution Corporation Ltd. (Tangedco) during the summer.

The Central Electricity Regulatory Commission (CERC) has reduced the price cap on power purchase from exchanges, a move which is likely to benefit the Tamil Nadu Generation and Distribution Corporation Ltd. (Tangedco) during the summer.

In a suo moto order, it directed the exchanges to redesign their bidding software from April 4 till further orders. The CERC has asked them to enable members to quote prices up to ₹10 per unit for all contracts.

The earlier cap for the segment was up to ₹12 per unit. In May 2022, the CERC had directed the power exchanges to cap prices at ₹12 per unit, as the prices went up to ₹20 per unit. This was initially applicable till June 30 and was later extended till September 30 and further till December 31. It was then extended till further orders.

The CERC also cut the price cap at high price day ahead market (HP-DAM) in the integrated day ahead market (I-DAM) segment at the India Energy Exchange, which was introduced in February this year, with a price ceiling of ₹50 per unit. Noting that there has not been any trade in the HP-DAM segment, the CERC cut the price cap to ₹20 per unit.

It also noted that the peak demand across the country is expected to rise with the onset of summer and increase in manufacturing activities from April. In a high-demand situation, there are possibilities of buyers paying abnormally high prices, even when the cost of generation by infra-marginal producers is not that high, it said.

Electricity Minister V. Senthilbalaji said the State’s peak demand was expected to touch 18,500 MW this summer. Tamil Nadu saw an all-time high demand of 18,053 MW on March 16. He added that all measures were in place to meet the demand.

According to the Energy Department’s policy note for 2022-23, the total installed capacity from conventional sources is 16,652.2 MW. The Tangedco’s own thermal power capacity is 4,320 MW and the Central generating stations’ account for 6,972 MW. As per the Tangedco’s tariff petition, approved by the Tamil Nadu Electricity Regulatory Commission, the State utility plans to buy 6,535.17 million units in 2023-24.