Green power trading faces regulatory red light

Central Electricity Regulatory Commission (CERC) struck down the idea of a separate day-ahead trading market (DAM) for renewable energy. The plan peaked as share of unsold renewable energy has been increasing with states not honouring their power purchase agreements (PPAs) or curtailing green power.

While it was hailed by power exchanges and renewable energy companies, the regulator called it an ‘immature market’. The move could be a major setback for the sector as it already battles curtailment and non-payment from states across the country.

“The Commission is of the view that the market condition at present is not conducive for the introduction of this product and accordingly it is not approved,” said the order. 

India Energy Exchange (IEX) petitioned to the regulator for approval of a Green Day Ahead Market (G-DAM) for separate trading of renewable energy. Renewable energy is being curtailed across states which either are fund-crunched or have access to energy vis-a-vis demand. Also, at the same time, most states that tendered renewable projects earlier are renegotiating their contracts as tariffs have come down to a historic low of below Rs 3.5 per unit in past one year.

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