MoP’s Group for Development of Electricity Market in India proposes comprehensive solutions to address key issues

The group constituted by Ministry of Power (MoP) for ‘Development of Electricity Market in India’ has proposed comprehensive solutions to address key issues, including the dominance of inflexible long-term contracts, harnessing the inherent diversity of a large and synchronous grid  and the need for resource adequacy planning in centre and states, reduction in system inefficiencies through lesser reliance on self-scheduling, increasing share of renewables in the overall energy mix, encouraging market participation for renewables, and firmness in procurement of ancillary services through well-developed ancillary services market.

The solutions are aimed at creating an efficient, optimal, and reliable market framework to enable the energy transition and integration of renewable energy into the grid. The group has recommended a roadmap outlining the interventions for the near, medium, and long term. The interventions include setting up a mechanism to monitor whether adequacy of supply is being maintained by the state utilities, enhancing the efficacy of the day-ahead market, introducing a market-based mechanism for secondary reserves, and implementing 5-minutes based metering, scheduling, despatch, and settlement. The proposed changes also include demand response and aggregation, which could reduce reserve requirements and lower electricity costs. Further, a regional level balancing framework for deviation management will be implemented which would result in reduction in deviation penalties for the states at the interstate transmission system (ISTS) level and consequently lower the reserve requirements.