When someone controls >50% of product supply … Fair Price discovery is not possible
Hence CERC tries to control and that is why you have PPAs so that customers gets Cost Plus pricing ( Fair pricing) and not what Power suppliers can charge … That is relevant for base load > 90% of energy supplied
Only peak load sales where there is some margin to make incentive can be really traded , unless power consumers who tied up is inefficient or under Debt …
A market without PPA is very risky for Discoms as there will be consumer unrest if they prices flucutate on daily basis esp on higher side …
The next level problem is Virtually integrated players … Tatapower / Adani Power into generation , Transmission and Distribution … Now NTPC too is trying this
As they expand there wings into multiple geographies and be both producers and consumers … Where is price discovery ?? It will be cost plus pricing … Unless regulation is implemented in such a way each entity acts as independent and fair entity …
Lot of water has to follow before we reach for perfect solution … What has happened in recent times in EU indicates exchanges may not be right approach for 100% energy trading …
Long term approach ( 1 to 1 ) in power generation , transmission and distribution is necessary for base loads