Panel of experts proposes plan to revamp Indian Power Market

A panel of experts appointed by the Ministry of Power has suggested comprehensive solutions to tackle key issues in India's electricity market such as long-term contracts, resource adequacy planning, and increasing the proportion of renewable energy in the overall energy mix. The objective is to establish an efficient, optimal, and dependable market framework that would facilitate the transition to renewable energy and its integration into the grid. The proposed measures involve demand response and aggregation, fortifying market monitoring and surveillance activities, and introducing a regional-level balancing system for managing deviations. The panel is led by the Power Secretary and comprises representatives from different ministries, regulatory bodies, and state governments. The group has submitted its report to R K Singh, Union Power Minister, outlining a roadmap and specific recommendations for redesigning India's electricity market of the future. The roadmap includes interventions for the near, medium, and long term, such as setting up a mechanism to monitor supply adequacy, improving the efficiency of the Day-ahead Market, implementing a market-based mechanism for secondary reserves, and introducing 5-minute-based metering, scheduling, dispatch, and settlement. Singh stressed the need to secure the most effective power generation capacity while devising capacity contracts and concurred with the recommendation of long-term power purchase agreements lasting 12-15 years. He proposed that new renewable capacity expansions should use the Contract for Difference methodology to ensure competitiveness and transparency. As per the latest figures, the total traded volume in the Indian electricity market in 2023 was only a small fraction of the energy produced from all sources. The peak demand for electricity in 2022-23 was 215.8 GW, projected to rise to 335 GW by 2030. Also read: Torrent Power forms TU14 for power generation and tradingGodrej & Boyce expands its portfolio, secures Rs 20 bn