POwer trading through exchanges in India: Guidelines from CERC
Power trading through exchanges in India has become a significant tool for electricity procurement, and the trading volumes have grown significantly over the years. The introduction of various market segments such as day-ahead market, term-ahead market, real-time market, renewable energy certificates, and energy-saving certificates has enabled greater participation and better price discovery.
The Power Exchanges in India were established in 2008, and they have been operational for 13 years, providing a platform for trading electricity. The volume of electricity traded on Power Exchanges has increased significantly from 15.52 billion units in 2010-11 to 79.95 billion units in 2020-21. The number of participants in Power Exchanges has also grown, with over 5000 open access consumers across various states.
To further enhance the trading experience and facilitate more transparent price discovery, the Central Electricity Regulatory Commission (CERC) has introduced guidelines for power trading through exchanges. Some of the important guidelines are summarised in the table below:
| Guideline | Description |
|---|---|
| Real-Time Market | The Power Exchanges were directed to implement the Real-Time Market (RTM) in May 2020. The RTM is designed for a 15-minute delivery period in a half-hourly market at regular intervals throughout the day. The RTM provides an opportunity for buyers and sellers to trade electricity closer to the time of delivery, enhancing grid stability and reducing dependence on conventional sources. |
| Green Term-Ahead Market | In August 2020, the CERC directed the Power Exchanges to launch the Green Term-Ahead Market (GTAM), which is specific for renewable energy sources. The GTAM provides a platform for buyers and sellers to trade renewable energy, which enables better price discovery and market access for renewable energy generators. |
| Integrated Day Ahead Market | In October 2021, the CERC approved the introduction of Green Day Ahead Contracts in Integrated Day Ahead Market (IDAM) at the Power Exchanges. The IDAM is an additional avenue for short-term trading of renewable energy. The introduction of IDAM provides more trading opportunities and better price discovery for renewable energy generators. |
The Power Exchanges in India have played a significant role in enabling electricity procurement through a transparent and efficient market mechanism. The introduction of various market segments such as real-time market, green term-ahead market, and integrated day-ahead market has enabled greater participation and better price discovery. The guidelines introduced by the CERC have facilitated the growth of power trading through exchanges in India and have created a more robust market for electricity procurement.