Indian power regulator retains price cap at electricity exchanges (updated)

Indian Energy Exchange

28/12/2022 15:05

(Adds detail, background)
       NEW DELHI, Dec 28 (Reuters) - India's power regulator on
Wednesday retained a price cap of 12 rupees ($0.1450) per unit
on electricity traded on its spot power exchanges ahead of
expected record energy demand in the coming summer months.
    The Central Electricity Regulatory Commission (CERC) issued
the order on Wednesday for extended retention of the ceiling
"until further orders", citing consumer interests. The move
could effectively keep costlier imported coal and gas-based
power generation out of the spot market.
    The CERC had lowered the price ceiling on power exchanges in
April, from 20 rupees a unit, in light of desperate buying by
state electricity companies to meet surging summer demand. 
    The order was extended twice and was to expire on Dec. 31.
The Indian Energy Exchange  IIAN.NS  and unlisted PXIL are the
two main power exchanges in India.
    "Energy requirement and peak demand remained higher in
2022-23 and the trend is likely to continue in the coming
months," the CERC order said, adding that peak hour demand for
2023-24 is projected to be 230 GW, against 215 GW so far in
2022-23.
    Industry sources expect the cap to remain in place
indefinitely because there will be a separate market segment
without a price cap. That new segment on the country's power
markets would include costlier electricity from imported gas and
coal-based power stations.
($1 = 82.7650 Indian rupees)
 (Reporting by Sarita Chaganti Singh
Writing by Shivam Patel 
Editing by David Goodman)
 ((Shivam.Patel@thomsonreuters.com;))