The Centre is weighing a plan to recover “excess revenue” earned by power plants in spot markets to provide funds to run gas-fired stations during crises, two government sources said.
Under the early-stage proposals, a uniform price cap on spot power trades would be replaced with new limits for each source of power generation.
Once prices are discovered in markets based on demand and supply bids, any funds generated from electricity sold above those limits would be considered excess revenue and recovered for the crisis plan.
While the move could help power retailers that struggle to buy electricity on markets when prices are high, it could hurt the margins of power companies that sell in spot markets.
