Centre’s initiative for greater availability of power during peak demand

(Representational Image: iStock)


The Centre has launched a ”High Price Day Ahead Market and Surplus Power Portal (PUShP), an initiative to ensure greater availability of power during the peak demand season.

Union Power Minister R K Singh launched the portal at a virtual function in New Delhi yesterday in the presence of over 200 stakeholders from state governments and the power sector.

Last year, the Ministry of Power, after taking note of the fact that on some days the prices in the electricity exchange had gone up to Rs 20, had given directions to the Central Electricity Regulatory Commission (CERC) to put a price cap of Rs.12 on the exchange so that there is no profiteering.

The cap was imposed from 1 April last year in the ”Day Ahead Market & the Real Time Market”, and further in all segments from 6 May.  This move rationalised the price for buyers.  Because of the high prices of gas in the international market; the electricity made by using gas was expensive – more than Rs.12 per unit – and this capacity could not be sold in the market.  Similarly, the imported coal-based plants and the renewable energy stored in battery-energy storage systems could not be brought into operation, as their generation cost was high.

This year it is expected that the demand will be much higher than last year. Therefore the gas-based plants and the imported coal-based plants will need to be scheduled – and that is why a separate segment has been carved out for those generation systems where the cost of generating power – from gas / imported coal / RE plus storage – may cross Rs.12. This separate segment is called HP DAM.

Speaking on the occasion, the power minister said that the HP—DAM was part of the overall strategy to ensure that all available power capacity is utilized to supply the power to consumers.

Explaining the operation of the HP-DAM, Singh said that nobody would be allowed to charge exorbitant rates. He said that only those generating capacities which have a cost of producing power of more than Rs. 12 per unit would be allowed to operate in HP-DAM.  If the cost of production is less than Rs.12, the generators will have to offer power in the Power Exchange’s Integrated Day Ahead Market (I-DAM) only with a ceiling price of Rs.12.

The surplus power portal is a one-of-its-kind initiative, reflecting the ingenuity of the Ministry of Power and the Regulator. Distribution Companies have tied up long term PPAs for power supply. They have to pay fixed charges even when they do not schedule the power. Now the DISCOMs will be able to indicate their surplus power in block times/days/ months on the portal. Those DISCOMs who need power will be able to requisition the surplus power. The new buyer will pay both variable charges (VC) and fixed costs (FC) as determined by regulators.