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Comments and Suggestions on the CERC Staff Discussion Paper on Re- designing real time electricity markets in India

Author(s): Prayas (Energy Group) Publication Date: September, 2018

Currently the distribution companies and major users of the grid depend on deviation and settlement mechanism extensively and the newly introduced ancillary services to meet real-time changes in demand and supply. With the rising quantum of surplus, increasing renewable energy in the system there is also a need for real time market-based settlement mechanisms for optimal resource utilisation. In a welcome step, CERC staff have prepared a consultation paper on redesigning real time markets in India. This is attached below. The CERC staff paper observes the absence of gate closure in India. Thus, DISCOMs can revise their schedules and retain the right to recall till the time of actual delivery of the power. This uncertainty is a major barrier to the utilisation of real time instruments and also to the sale of unrequisitioned power as suggested in the National Tariff Policy. The staff paper identifies ways and means to introduce gate closure and kick start real time markets. Our comments and suggestions with respect to the proposals outlined in the staff paper include:

  • Introducing gate closure as part of the Indian Electricity Grid Code and urging SERCs to include gate closure in State Grid Codes.

  • Gate closure to be for 3 hours prior to delivery, similar to schedules for market instruments in power exchanges, rather than the 1.5 suggested in the paper initially to ensure smooth operation of real-time markets.

  • Need to ensure No Objection Certificates (NoCs) from DISCOMs as PPAs safe-guard the procurers right to recall. Provision of such NoCs can be a pre-requisite to participate in real time markets and DISCOMs can be urged to participate by ensuring utilisation of DSM and ancillary services is disincentivised or discouraged thought various mechanisms.

  • CERC should also define which participants are eligible for real time market transactions to ensure regulatory clarity and smooth operations.

Please find below our comments and suggestions along with the discussion paper.

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