CERC REJECTS IEX’S PROPOSAL FOR GDAM

The Indian Energy Exchange (IEX), so as to provide the obligated entities more number of ways to fulfill their RPO compliance, had proposed to the CERC to allow the existing renewable energy generators to trade RE on IEX.

 

For the same, it had proposed that the following contracts including Green Day Ahead Market (G-DAM) which includes Solar and non-solar day ahead market be introduced. If the bid made in the G-DAM is not cleared or cleared partially, they can bid in DAM. Also, in lieu of the bid cleared in DAM, the seller will get equal number of RECs.

This order was rejected by the CERC and the following reasons were given for the same:

  • As per CERC, the status regarding the availability of surplus power is not clear. Also, based on the experiences in the past, it can be established that such trade will not lead to addition of new RE capacity.

  • The IEX has supposed that there are no discrepancies in the forecasting and scheduling for RE generators which is not the case. Therefore, their suggestions of remove the need for revision flexibility during the day is not valid.

  • Based on the suggestions of IEX which mentioned that in case if the bid made in the G-DAM is not cleared or cleared partially, they can bid in DAM, it can be assumed that the situation will lead to registration of RE sellers for FIT route as well as REC mechanism. This will demand that a system be established where there is proper accreditation, registration, accounting of RE generation and settlement mechanism.

  • The G-DAM market may dissuade the buyers from entering into long term contracts which provide comfort to RE investors.

  • The guidelines related to the timelines for scheduling of power traded will have to be amended as per IEX which the commission felt will be an unnecessary step right now.

  • IEXs recommendations assume that the the green power traded in G-DAM will follow the same scheduling procedure as that followed by conventional power. Therefore, the commission feels that there is no need to introduce a separate segment for trading.

The order can be accessed here.

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