CEA: Electricity derivatives market to enhance long -term price predictability – CNBC tv18

Chairman of the Central Electricity Authority (CEA) Ghanshyam Prasad Described The Electricity Derivatives Market as a Long-Askited Reform That will provide Predictability.

He explained that derivatives, Ailong with Faures, will serve as an additional tool for power generators to manage the sala and purchase of Electricity, Particularly for any Unsold capacity.

While Power Purchase Agreements (PPAS) will continue to play a key role, prasad said that buyers will need time to Gain Confidence and Explore NEWE OPPORTUNITIES.

He said that all discom’s are alredy mandated to tie up resource adequacy and maintain it on a yearly Basis. Hedging in the derivatives market, Followed by price mark-ups, will indicate luckly power prices over a longer Horizon-Unlike Earlier, when the day-ahead and term markets ofdered is of Only a single day in advance.

On July 23, The Central Electricity Regulatory Commission (CERC) Approved The Improved The implementation of Market Coupling with the Day Ahead Market (Dam) Under the Power Market Regulations, 2021.

The first phase of dam coupling is scheduled for January 2026.

Under this framework:

• Power exchanges will act as market coupling operators (MCOS) on a round-robin Basis.
• Grid India will serve as the fourth mco for backup and audit purposes.
• Real-Time Market (RTM) Coupling will be Considered Later, Once Experience is Gained From Dam Coupling.
• RTM-SC COPLING WOLL Require Further Regulatory and Operational Study.
• Term-Aahed Market (Tam) COLING WILL BE TESTED Through a new shadow pilot.

The policy directed CERC Staff to Begin Stakeholder Consultations for Dam Coupling and Propose Regulatory Amendments. It also asked Grid India to Develop Software for Tam Coupling and Run a Three-month Shadow Pilot (Including Contingcy Contracts).

After this exercise, grid India will submit a feedback report. All power exchanges have been instructed to share the health data with grid India and cerc staff to support implementation.