The existing cap (INR 12/kWh) on the market clearing price (MCP) has traditionally restricted high variable cost generators from participating in power exchanges. The Ministry of Power’s high-price day-ahead market (DAM) segment will provide a platform for these generators, including battery energy storage systems, to sell costlier electricity on power exchanges. In return, buyers can access high-price DAM during high-demand periods.

The launch of high-price DAM in March coincides with the onset of the summer season. It will be interesting to see how high-price DAM addresses supply–demand mismatches in the upcoming high-demand months.