India achieved a milestone on Wednesday with the official launch of real-time electricity market in the country, enabling consumers, including distribution companies (discoms) and captive users, to buy power on exchanges just half-an-hour before delivery.
So far, the shortest period of trading in electricity in the country has taken place a day ahead of the market, meaning you have to place order for supplies at least a day in advance.
The pan-India real-time market (RTM) was launched by Minister of State for Power and New and Renewable Energy R K Singh through video conference in the capital. This has placed Indian electricity market among a league of few electricity markets in the world which have RTM.
The minister said real-time market is an organized market platform to enable buyers and sellers pan-India to meet their energy requirement closer to real-time operation. Introduction of real-time market will bring required flexibility in the market to provide real-time balance while ensuring optimal utilization of the available surplus capacity in the system.
It will also help manage diversity in the demand pattern in the country with an organized market at national level, the Minister said.
Real-time market would be for every 30 minutes in a day based on double-sided closed auction with a uniform price. The concept of “Gate Closure” has been introduced for bringing in the desired firmness in schedules during the hours of market operation. Buyers/sellers will have the option of placing buy/sell bids for each 15-minute time-block.
The proposed real-time market would provide an alternate mechanism for discoms to access a larger market at competitive prices. On the other hand, generators would also benefit by participating in the real-time market with their un-requisitioned capacity.
A mechanism has been provided for generators having long-term contracts and participating in this market to share the net gains with the discoms.
National Load Despatch Centre-POSOCO is facilitating necessary automation in coordination with power exchanges to ensure faster transactions and settlements in the real-time market framework.
The average power tariff in the RTM test trade at India Energy Exchange (IEX) on the first day of operation on Monday stood at Rs 1.55 per unit, 42 per cent cheaper than the ‘day ahead market’, official data showed.
The government of India’s target of 175 GW RE Capacity by 2022 is driving accelerated renewable penetration pan-India. The real-time market would help to mitigate challenges to the grid management due to intermittent and variable nature of renewable energy generation and, therefore, help to integrate higher quantum of renewable energy resources into the grid.
It is expected that shorter bidding time, faster scheduling and defined processes (e.g. gate closure) are expected to enable the participants to access resources throughout the all-India grid, promoting competition. It would lead to better portfolio management by the utilities with efficient power procurement planning, scheduling, despatch, and imbalance handling.
The distribution companies would be able to manage their power purchase portfolio optimally and need not tie up excess capacity. It would lead to cost optimization of power purchase and serving the consumers with reliable supply as any last-minute requirement can easily be bought from the real-time market.
The earlier regime of managing the grid by load shedding due to last-minute changes can be easily avoided. Thus, it is win-win for all stakeholder generators having opportunity to sell their surpluses. It will also result in better management of variability of RE generation, better utilization of transmission systems with discoms getting opportunity to buy or sell power. Finally, consumer will get reliable power supply.