Electricity Sector

  • August 20, 2022
  • Posted by: OptimizeIAS Team
  • Category: DPN Topics
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Electricity Sector

Subject :Economy

Section: Infrastraucture

Context:The National Load Dispatch Centre (NLDC) has banned discoms of Telangana from participating in the day ahead market with the Indian Energy Exchange (IEX) for procuring energy on the grounds of non-payment of dues to Gencos despite making payments.

Concept:

National Load Despatch Centre (NLDC)

  • It is constituted as per Ministry of Power (MOP) notification under Section 26 of the Electricity Act 2003
  • It  is the apex body to ensure integrated operation of the national power system.
  • The main functions assigned to NLDC are:
    • Supervision Over the Regional Load Despatch Centers.
    • Scheduling and dispatch of electricity over the inter-regional links in accordance with grid standards specified by the authority and grid code specified by Central Commission in coordination with Regional Load Despatch Centers.
    • Coordination with Regional Load Despatch Centers for achieving maximum economy and efficiency in the operation of National Grid.
    • Monitoring of operations and grid security of the National Grid.
    • Supervision and control over the inter-regional links as may be required for ensuring stability of the power system under its control.
    • Coordination with Regional Power Committees for regional outage schedule in the national perspective to ensure optimal utilization of power resources.
    • Coordination with Regional Load Despatch Centers for the energy accounting of inter-regional exchange of power.
    • Coordination for restoration of synchronous operation of national grid with Regional Load Despatch Centers.
    • Coordination for trans-national exchange of power.
    • Providing Operational feedback for national grid planning to the Authority and Central Transmission Utility.
    • Levy and collection of such fee and charges from the generating companies or licensees involved in the power system, as may be specified by the Central Commission.
    • Dissemination of information relating to operations of transmission system in accordance with directions or regulations issued by the Central Government from time to time.

The Indian Energy Exchange (IEX)

  • Power Exchanges provide the market participants a platform with multiple avenues for buying-selling of power and hence manage their power portfolios efficiently.
  • Indian Energy Exchange is the first and largest energy exchange in India providing a nationwide, automated trading platform for physical delivery of electricity, Renewable Energy Certificates and Energy Saving Certificates.
  • India Energy Exchange enables participants to purchase electricity for the same day through intra-day contracts, for the next day through day-ahead contingency, on daily basis for rolling seven days through daily contracts, and on weekly basis through weekly contracts to manage their electricity portfolio for different durations.
  • It is an Indian electronic system based power trading exchange regulated by the Central Electricity Regulatory Commission (CERC). 
  • IEX started its operations on 27 June 2008.
  • The exchange platform enables efficient price discovery and increases the accessibility and transparency of the power market in India while also enhancing the speed and efficiency of trade execution.
  • The Exchange is a publicly listed company with NSE and BSE.
  •  Indian Energy Exchange pioneered the development of power trading in India and provides an electronic platform to the various participants in the power market, comprising State Electricity Boards, Power producers, Power Traders and Open Access Consumers (both Industrial & Commercial).
  • IEX is one of the two operational Power Exchanges in India.
  • Product Segments:
    • Day-Ahead Market (DAM)
      • Launched in June 2008, in this segment, participants transact electricity on a 15-minutes block basis, a day prior to the delivery of electricity.
      •  Both buyers and sellers submit their anonymous bids electronically during the market bid session and matching of bids are done on a double-sided auction mechanism with a uniform market clearing price.
    • Term-Ahead Market (TAM)
      • Launched in September 2009, contracts under TAM cover a range for buying/selling electricity for a duration up to 11 days.
      •  It enables participants to purchase electricity for the same day through intra-day contracts, for the next day through day-ahead contingency, on a daily basis for rolling seven days through daily contracts, and on a weekly basis through weekly contracts to manage their electricity portfolio for different durations.
    • Renewable Energy Certificates (REC)
      • Launched in February 2011, the Renewable Energy Certificate market facilitates transactions in environmental attributes.
      • The Renewable Energy (RE) generator can opt to get RECs against the green attributes of their generation.
      • These generators can sell RECs through the exchange. On the other hand, the obligated entities-distribution companies, captive plants and open access consumers may opt to purchase RECs to fulfil their Renewable Purchase Obligation (RPO).
      • The renewable energy generators are able to sell electricity to distribution companies at their average power purchase cost, utilize the same for captive consumption, or sell it to third parties while selling the environmental attribute of the renewable electricity through RECs. The REC Market offers both solar and non-solar RECs
    • Energy Saving Certificates (ESCerts)
      • ESCerts are the tradable certificates under the Perform, Achieve, Trade (PAT) Scheme of Bureau of Energy Efficiency (BEE), a market-based mechanism to incentivise energy efficiency in large energy-intensive industries.
      • IEX became the first and only Power Exchange to commence trading in ESCerts on 26 September 2017.

Power System Operation Corporation

  • Power System Operation Corporation Limited (POSOCO) is a CPSE under the jurisdiction of Ministry of Power, Government of India.
  • It is responsible to monitor and ensure round the clock integrated operation of Indian Power System in a reliable, efficient and secure manner thus serving a mission critical activity.
  • It consists of 5 Regional Load Despatch Centres (RLDCs) and the National Load Despatch Centre (NLDC).
  • Various apps like Vidyut Pravah, Merit, etc. developed by POSOCO are being used for dissemination of real time information about Indian Power System in public domain for bringing transparency in electricity market operation
economy Electricity Sector