The Central Electricity Regulatory Commission (CERC) has issued an order aimed at streamlining operations, enhancing price discovery, and improving market efficiency across power exchanges in India. The order, dated April 28, 2025, follows a suo-motu petition (No. 8/SM/2024) and extensive consultations with stakeholders.
The CERC has addressed concerns regarding price discovery in Day-Ahead Contingency (DAC) contracts, anomalies in the Term Ahead Market (TAM), and the functioning of Any-Day Single-Sided (ADSS) contracts. The order introduces key changes to the operation of these market segments.
Restrictions on Time Slots in Term Ahead Market (TAM)
Responding to concerns about market fragmentation due to a proliferation of user-defined time slots, the CERC has directed all power exchanges to discontinue the provision of user-defined time slots (including hourly slots) in TAM, Green TAM, and High-Price TAM within one week from the date of the order.
Instead, exchanges will be limited to offering established pre-specified slots such as Base/RTC, Peak, Off-Peak, and Night (with peak periods defined by NLDC). For Green TAM, exchanges can pre-specify slots based on the generation profiles of different renewable technologies. Power exchanges are mandated to consult with market participants on the selection of these pre-specified slots and submit them to the CERC for approval within one month. The NLDC has also been directed to declare timings for Solar/Non-Solar hours regularly, while RLDCs will continue to declare region-wise peak and off-peak hours.
Standardized Timelines and Disciplined Participation for Any-Day Single-Sided (ADSS) Contracts
To address issues of non-serious participation and volume blocking in ADSS contracts, the CERC has mandated the following standardized timelines for all ADSS requisitions, effective for new notices issued after seven days from the order date:
- Bid Receiving Window: Maximum 2 days (48 hours)
- IPO Auction: Maximum 2 hours (120 minutes)
- Reverse Auction: Minimum 2 hours (120 minutes), with extension up to 24:00 Hrs of the auction day
- Acceptance Window: Maximum 2 days (48 hours), excluding the day of the reverse auction
Furthermore, power exchanges are directed to obtain a declaration from buyers at the requisition stage regarding any concurrent auction notices for the same requirement on other platforms. They are also instructed to desist from offering rebates or waivers on the auction initiation fee and charge a minimal non-refundable fee to encourage serious participation.
While acknowledging the utility of Intra-Day contracts for participants, the CERC has directed power exchanges to:
- Continue the operation of Intra-Day contracts with continuous matching.
- Allow market participants to select ‘Market’ order type.
- Align the delivery to be 2.5 hours ahead and standardize the trade window across all power exchanges.
PXIL has been instructed to discontinue its ‘Intra-Day Dynamic’ contracts with immediate effect.
The CERC has also decided to modify the price discovery mechanism for Day-Ahead Contingency (DAC) contracts from the existing continuous matching to a Uniform Price Step Auction. The Commission believes this change will consolidate liquidity, prevent anti-competitive practices, and ensure more transparent price discovery. The CERC staff will initiate the process for amending the Power Market Regulations (PMR) 2021 accordingly, and power exchanges will subsequently need to approach the Commission for approval on the proposed specifications and timelines for the new auction mechanism. The possibility of splitting the DAC trading window into multiple sessions is also being considered.
