New Delhi: A power ministry-constituted panel has suggested a roadmap outlining the interventions for the near, medium, and long term for the development of the electricity market.
The interventions suggested by the panel 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, dispatch, and settlement.
The proposed changes also include demand response and aggregation, which could reduce reserve requirements and lower electricity costs, according to a power ministry release.
There will be strengthening of market monitoring and surveillance activities to keep track of participation and prevent price volatility.
A regional-level balancing framework for deviation management will be implemented which would result in reduction in deviation penalties for the States at the ISTS level and consequently lower the reserve requirements.
The ministry constituted a Group for “Development of Electricity Market in India” under the chairmanship of S Power Secretary Alok Kumar with representation from Ministry of Power, Ministry of New & Renewable Energy, Central Electricity Authority, Central Electricity Regulatory Commission, Grid Controller of India (Grid-India) along with state governments.
The Group presented the report to Union Minister of Power and New & Renewable Energy, R. K. Singh, a power ministry statement said.
The Group proposed 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.
Issues like 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 also sought to be addressed by the group.