Union Power Minister RK Singh launched a new portal on Thursday to ensure the availability of electricity during peak demand seasons. The new portal will allow certain categories of sellers to sell power at a price higher than the ceiling of Rs 12 per unit.
According to a statement from the power ministry, the central government has launched a High Price Day Ahead Market (HP-DAM) and Surplus Power Portal (PUShP). In February, the power regulator CERC approved the HP-DAM segment, which will enable power to be sold at a price as high as Rs 50 per unit. Stranded gas and imported coal-based power plants will be assisted to produce and sell costly electricity to fulfill the high peak demand during the summer season, which is anticipated to reach 239 GW this year.
In addition, the new category will guarantee the availability of electricity by utilizing a high-priced battery energy storage system. The Union Minister explained that HP-DAM would only allow generating capacities that have a production cost greater than Rs 12 per unit. In the event that the cost of production is lower than Rs 12, the generators must only offer electricity in the Power Exchange's Integrated Day Ahead Market (I-DAM) with a maximum price limit of Rs 12.
During a virtual event in New Delhi on Thursday, Union Power Minister R K Singh inaugurated the portal in the presence of more than 200 stakeholders from the power sector and state governments. He directed the Central Electricity Authority and the Grid Controller to make sure that the prices in the HP-DAM are affordable and to take the required action to prohibit power producers from charging excessive prices.
Singh stated that HP-DAM is a component of the comprehensive plan to guarantee that all available power capacity is utilized for the supply of electricity to customers. Minister of State for Power and Heavy Industries Krishan Pal Gurjar expressed his assurance that the new mechanism would ensure sufficient power availability.
Power Secretary Alok Kumar clarified that, contrary to some reports, Rs 50 per unit was only a technical cap, and the market forces would ensure a much lower rate. Kumar cited many benefits of the new market mechanism.
FAQs:
1. What is the purpose of the new High Price Day Ahead Market (HP-DAM) segment launched by the central government?
The new High Price Day Ahead Market (HP-DAM) segment will allow certain categories of power generators to sell electricity at a price higher than the ceiling of Rs 12 per unit. This will help stranded gas and imported coal-based power plants to produce and sell costly power to meet the high peak demand in summers, which is expected to be 239 GW this season.
2. What is the cost of production for generators who want to operate in the HP-DAM?
Generating capacities that incur a production cost of less than Rs 12 per unit are restricted to offering power in the Integrated Day Ahead Market (I-DAM) with a maximum ceiling price of Rs 12, whereas those generating capacities that have a production cost of more than Rs 12 per unit are allowed to operate in the HP-DAM.
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