CERC approves exclusive renewable energy trading in IEX

The Central Electricity Regulatory Commission (CERC) has approved the proposal of the Indian Energy Exchange (IEX) to introduce contracts for exclusively trading renewable energy on its platform. The new mechanism opens up options for power distribution companies (discoms) to resell renewable power that they procure from developers. IEX said it has already conducted mock trading session on Tuesday and plans to commence the trading from August 21. There will be separate provisions for solar and non-solar energy for each contract.

IEX expects G-TAM to also provide more options to discoms for fulfilling renewable purchase obligations (RPO), encourage new capacity addition and address the uncertainties around signing of long term power purchase agreements (PPAs) and cost recovery issues of renewable energy players. The green term-ahead-market (G-TAM) will work on four types of contracts — intra-day, day ahead contingency, daily and weekly. Prices will be discovered through ‘continuous trading’, where the highest ‘buy’ order and lowest ‘sell’ order gets the priority.

According to sources, discussions are also on with the government regarding the introduction of green day-ahead-market (G-DAM) which will be based on the existing framework of spot-market, where prices and quantum of electricity to be transacted is determined through a double-sided closed auction bidding process.

“As India moves towards building a sustainable energy economy, we are excited about this new chapter which offers choice to consumers and will play a key role in achieving the national renewable aspirations,” Rajiv Srivastava, managing director and CEO of IEX, said. The G-TAM approval closely follows the recent launch of the real-time market (RTM) trading in power exchanges, which provides more operational flexibility to thermal power producers who can sell additional power in the spot market when discoms procure lower volumes of electricity than what was scheduled by them.