Electricity distribution companies (discoms) in India predominantly buy electricity from the wholesale power market under long-term (typically 25 years), medium-term (up to 5 years), and short-term (up to 1 year) contracts.
Though a discom buys capacity through contracts of varying durations, it schedules power supply only on a day-ahead basis. To balance possible mismatches between procurement and supply, the discom either buys additional power from the market or other discoms (if the demand is expected to increase) or sells or curtails the excess contracted capacity (if the demand is expected to decrease)
The discoms schedule power based on their demand estimate and the available capacity for each 15-minute time block for the day ahead. This is called ‘self-scheduling’. However, demand and supply can fluctuate unexpectedly and across time blocks. To handle such real-time imbalances between demand and supply, mechanisms such as rescheduling, deviation settlement, and ancillary services are deployed
Regulations in Power Sector
(Soon)
In Double-sided closed auction, orders get accumulated during auction then intersection between the aggregated sale and purchase curves defines the market clearing price (MCP) for all orders submitted during auction.
In continuous auction, price-time priority based continous matching.
IEX Products
Day Ahead Market(DAM, GDAM) – To buy electricity for the next day’s needs that start at midnight, and buyers can buy in 15 mins multiple for any/some/all time blocks in 24 hours of the next day. GDAM is similar except power comes from renewable sources than thermal. DAM follows double sided closed auction.
Real-Time Market (RTM) – RTM features collective auction session every half
an hour with power being delivered after four-time blocks, or an hour after gate closure of the auction.
Term Ahead Market (TAM, GTAM) – Buyers can buy electricity on a term basis for a duration of upto 11 days ahead. Products in the Term-Ahead Market include Intra-day(same day delivery, hourly basis), Day-Ahead Contingency(next day delivery, hourly basis, continous auction), Daily(for entire day) and Weekly(for entire week) contracts.
Renewable Energy Certificate(REC) – Certificate of energy generation from renewable sources. Useful to meet Renewable Purchase Obligation(RPO) by entities. There are two categories in REC market – Solar and Non-solar. One certificate represents 1 MWh of renewable energy generated.
Energy Saving Certificates (ESC) – consumers in energy-intensive industries are assigned specific energy consumption targets under the Perform Achieve Trade (PAT) cycle. ESCerts are issued basis performance of the designated consumers against specified targets by Ministry of Power, Government of India and are traded on the Power Exchanges.
Sources:
- https://www.ceew.in/cef/masterclass/explains/redesigning-day-ahead-electricity-markets-in-india#
- IEX presentation, annual report etc.
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