Hindustan Power Exchange (HPX) on Thursday said it has got power regulator CERC's approval to introduce high price electricity contracts in three key markets. The move comes as a part of Central Electricity Regulatory Commission's (CERC) efforts to further enhance market dynamics, deepen the market, and provide more opportunities for members to manage their risk and optimize their energy portfolios.

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"HPX has got approval from CERC for the introduction of high price contracts in three key markets: High Price Day Ahead Market (HP-DAM), High Price Term Ahead Market (HP-TAM), and High Price Contingency Contracts," HPX said in a statement.

The high price contingency contracts will provide added stability to the energy market during periods of volatility.

The HP-DAM pricing has been established with a floor price of zero to mitigate any adverse impact on the integration of renewable energy in the national grid.

Simultaneously, the forbearance price has been set at Rs 20/kWh as per the commission's order on March 31, 2023.

With the fresh alternative of HP-TAM, these high price generators can plan for sale of their power to interested beneficiaries under longer term contracts of up to 90 days, it said.

This would give them an opportunity to secure fuel supply in advance and plan their operations basis the underlying contracts, moving away from the sole dependency on clearance in the DAM segment, it explained.

"With the CERC nod to introduce high price contracts on HPX, we have been successful in delivering two new products for the power market within a short time-span of just one year of starting our business operations in July last year. Till date these high-price generators had just one option to sell power, that is through participation in the HP-DAM segment," Naveen Singh, Vice President & Head, Business Development, HPX said.

With these new segments, the generators can plan their power sale to interested buyers for up to 90 days, giving HP-generators sufficient clarity to plan their fuel procurement, logistics etc, he said.

This also ensures a level playing field across different market segments, gives more choice to the consumers and promotes competition, he added.