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Power Chronicle - EAL Newsletter - Volume 02, Issue 03

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Document pages: 8 pages

Abstract: Expected to further broaden and deepen the short-term electricity market in India, rollout of Security Constrained Economic Despatch (SCED) and the upcoming introduction of Real Time Market (RTM) are steps in that direction. The SCED optimises power procurement across ISGS plants, once state entities have finalised their respective schedule. The benefits of SCED are measurable and highlight the benefit of adopting broad-based market framework.EAL is pleased to note that one of its key recommendations, adoption of the multi-period optimisation framework, is being adopted by POSOCO under the revised SCED procedure. In this issue of Power Chronicle, we identify some additional issues that deserve attention. Under the benefit sharing mechanism, adjustment towards reduction in part load operation on account of an increment in schedule needs to be incorporated to ensure that the DISCOMs do not end up paying for the part load plant operation that did not finally happen.Absence of a liquid and broad based market product, which can help buyers as well as sellers to take market decisions closer to the time block, is being addressed through the RTM. Availability of a more reliable demand forecast, and latest known availability of the generation resources as well as the transmission network closer to the time block bridges the information gap in making real time market decisions.While theoretical underpinning of the RTM concept are established, the market outcome depends on the rules for market design and its operation. RTM being voluntary in nature, should be able to entice the URS capacity across the country. Mandating bidding of URS at their VC (plus the 7 paise margin) would ensure participation of generators which fully recover their fixed charges. This would enhance competition and liquidity in the RTM. Capacity building of DISCOMs and the SLDCs, enhancement of in-house skills and regulatory nudge to optimise cost of power procurement can enhance participation of the distribution utilities

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