CERC allows PXIL to introduce hydropower contracts in GTAM

Highlights :

The Commission directed PXIL to incorporate appropriate provisions in its Bye-laws, Rules, and Business Rules concerning the introduction of Hydropower Contracts in GTAM and submit to the Commission for records within 2 weeks from the date of the order.

In a recent order, the Central Electricity Regulatory Commission (CERC) has approved Power Exchange India Ltd.’s (PXIL) proposal to introduce Hydropower Contracts in existing Green Term Ahead Market (GTAM) on its platform for exclusive trading of hydro energy.

CERC dealt with different aspects of the proposed contract keeping in view the submissions made by PXIL and comments/suggestions given by the stakeholders as follows:

(i) HPO fulfillment through Hydropower contracts in GTAM

PXIL had proposed a separate window for Hydro Contracts (other than Solar and Non-Solar) in GTAM so that the procurement of hydro power by the obligated entities through the exchange platform can be differentiated and the buyer of such hydropower can be considered for meeting HPO.

“We agree with the proposal of the Petitioner to introduce separate window for Hydropower Contracts in existing GTAM along with the already existing windows for Solar and other Non-Solar Contracts. A dedicated window for Hydro Contracts in GTAM will facilitate the matching of hydro buy bids with hydro sell bids. Also, the obligated entities procuring RE through Hydropower Contracts through the proposed separate window in the GTAM shall be eligible for meeting their HPO in view of the fact that only Hydropower with green attributes shall be available for sale through such window. Further, as the transactions through GTAM are bilateral in nature with clear identification of corresponding buyers and sellers, there will not be any difficulty in accounting for HPO,” responded CERC.

(ii) Type of Contracts

PXIL had proposed the Hydro GTAM Contracts under the categories of Green Intra Day Contract, Green Day Ahead Contingency Contract, Green Any Day Contract and Green Weekly Contract.

“As regards types of contracts, since the proposed contracts are on the same lines as the existing contracts under GTAM, we allow the Petitioner to introduce the proposed hydro contracts in GTAM,” stated CERC.

(iii) Price Discovery Methodology and Matching Rules

PXIL had sought approval of the Commission to the proposal of Uniform Price Auction to Contracts approved in the Term Ahead Market, Green Term Ahead Market and in Hydro Green Term Ahead Market, and any other Contracts to be introduced in such market segments in the future.

“We agree to the inherent merits of the Uniform Price Auction as mentioned by the Petitioner and endorse the Petitioner‟s proposal for price discovery methodology and matching rules for the hydro GTAM contracts. Accordingly, we allow “Uniform Clearing Price Auction‟ for Hydro GTAM Any Day Contracts and Hydro GTAM Weekly Contracts,” responded CERC.

“However, the proposal of the Petitioner for approval of price discovery methodology in respect of any other contracts to be introduced in future, is not agreed to as it would amount to blanket approval without examining the implication of such proposal,” it added.

(iv) No Objection/Standing Clearance by RLDC/SLDC

PXIL had requested to issue appropriate directions to RLDCs/SLDCs regarding “No Objection or Standing Clearance” issued to the Seller. PXIL had requested to direct them to mention the source of energy as “Hydro‟ along with the date of commissioning of the hydro generating station to ascertain its eligibility for participation in Hydro GTAM contracts.

“We note that for the existing GTAM contracts, details of source and quantum etc. are being mentioned in the NOCs issued to RE generators by the respective SLDCs/RLDCs. We further note that to meet their HPO, buyers have to procure hydro power from the LHPs >25 MW commissioned on and after 08.03.2019 and up to 31.03.2030. Therefore, initially, such hydropower plants which are commissioned on and after 08.03.2019 and up to 31.03.2030 and having installed capacity greater than 25 MW would be able to participate in Hydro Contracts of GTAM. In this regard, the eligibility of hydro power project to participate in hydro segment of GTAM shall be ascertained by the respective RLDC/SLDCs, while issuing the NOC/eligibility certificate. Moreover, respective RLDCs/SLDCs are directed to provide the point of injection in the NOC itself so that the source of power and actual dispatch from that source can be traced in a transparent manner, as being done in case of existing GTAM,” stated CERC.

(v) Waiver of ISTS charges and losses

“We note that waiver of inter-State transmission charges and losses for RE generation are available in accordance with provisions of the CERC (Sharing of Inter-State Transmission Charges and Losses Sharing) Regulations, 2020. Any such waiver shall be admissible to the entities which fulfill the conditions specified under the Sharing Regulations,” found CERC.

In the light of the above analysis, the Commission approved PXIL’s proposal to introduce Hydropower Contracts in GTAM. The Commission further directed PXIL to incorporate appropriate provisions in its Bye-laws, Rules, and Business Rules concerning the introduction of Hydropower Contracts in GTAM and submit to the Commission for records within 2 weeks from the date of the order.

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