Roadmap outlined by power ministry panel to develop electricity market

16 May 2023 CW Team

A panel appointed by the Ministry of Power has recommended a plan of action to develop the electricity market in India. The plan includes short, medium, and long-term interventions. The suggested interventions involve setting up a system to ensure that state utilities maintain an adequate supply of electricity, improving the efficiency of the Day-ahead Market, introducing a market-based mechanism for secondary reserves, and implementing 5-minute metering, scheduling, dispatch, and settlement.

The proposed changes also include demand response and aggregation, which could reduce reserve requirements and lower electricity costs, according to a statement released by the Ministry of Power.

To prevent price volatility and track participation, market monitoring and surveillance activities will be strengthened. A regional-level balancing framework for managing deviations will also be implemented, which will reduce deviation penalties for states at the ISTS level and, consequently, lower the reserve requirements.

The Ministry formed a group chaired by S Alok Kumar, Power Secretary, to develop the electricity market in India, with representatives from the Ministry of Power, Ministry of New & Renewable Energy, Central Electricity Authority, Central Electricity Regulatory Commission, Grid Controller of India (Grid-India), and state governments.

The group presented the report to R K Singh, Union Minister of Power and New & Renewable Energy.

The group also proposed solutions to address key issues such as inflexible long-term contracts, leveraging the diversity of a large and synchronous grid, and the need for Resource Adequacy planning in the Centre and States.

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