Power can now be bought an hour before its requirement in real time market, unlike the popular day-ahead market by discoms on spot exchanges where trade happens a day in advance
New Delhi: India is set to start real time trading on power exchanges, enabling electricity purchase to be as quick as placing an online meal.
State power distribution companies and industrial consumers will be able to meet emergency short-term power needs through the new real time market or RTM.
Power can now be bought an hour before its requirement in real time market, unlike the popular day-ahead market by discoms on spot exchanges where trade happens a day in advance.
In the same manner, power generating stations with excess power capacity or distribution companies with more than required contracted capacities can sell at a short notice in the real time market.
Electricity RTM launch has not been deferred amid the nationwide lockdown and will start operations as per the schedule on June 1, multiple sources in the government and Central Electricity Regulatory Commission said. The auctions in RTM will be held every half-hour.
The bidding criteria will be similar to that of day-ahead where market clearing price is determined through demand and supply.
Currently, there are intra-day markets on power bourses where electricity delivery can take place after 2.5 hours of the auctions but they are less popular since their bidding criteria requires the traders to match winning bids.
A senior government official said the real time market will enable buyers to meet contingencies and enable discoms to supply electricity 24×7 to consumers and last minute load-shedding can be avoided. The power ministry will soon approach the Union Cabinet seeking nod on the National Tariff Policy, which proposes restrictions on gratuitous load shedding BY DISTRIBUTION COMPANIES. The power ministry also proposes to move Cabinet to allow power plants flexibility in utilising existing Coal India contracts to sell in short-term markets.
“The Indian Energy Exchange is delighted about the introduction of real time electricity markets to commence trading from June 1,” said Rajiv Srivastava, managing director and CEO at Indian Energy Exchange Ltd. “The market will feature 48 auction sessions during the day at the exchange platform besides the existing market segments.”
Srivastava said RTM will offer the distribution utilities immense flexibility to meet their dynamically varying schedule with delivery of power within an hour of closure of bid session. “With better planning, the utilities would be able to save on excess penalties currently paid under deviations framework as well as effectively integrate renewable energy. The market will also enable the system operators to enhance overall grid security and discipline,” he said.
The government official quoted earlier also said that the real time market will fit well in India’s plans to achieve 450 gigawatt (GW) of renewable energy capacity by 2030 as stated at the United Nations Summit 2019. The real time market will help consumers adjust to variability in power demand and supply due to unforeseen circumstances.
CERC has disabled last minute changes in power schedule by discoms to let power generators sell excess in RTM. Power plants with long-term power tie-ups will be required to share half of their gains with the discoms.