India to get an integrated day-ahead energy market for electricity, renewable energy by August
India has decided to have a unique integrated day-ahead market for conventional electricity and renewable energy as a major boost to green plants that will have two options to sell their power.
Integration of the existing day-ahead market for conventional power with renewable energy would mean there will be a two-stage day-ahead market with separate price formation for green energy, a top government official said.
“In the first stage, exclusive trade in renewable energy will take place. In the second stage, unsold renewable energy, if opted by the generator in his initial bid, will be cleared in common energy trade along with conventional energy,” he said.
The integrated day-ahead exchange is likely to be functional by August, the official said. Green power sold in the renewable day-ahead market will be eligible for meeting renewable purchase obligations of states. While generators selling renewable energy in the conventional day-ahead market will be eligible for renewable energy certificates (REC) that can be traded in the REC market of power exchanges.
The exchange aims to promote merchant green power plants independent of power purchase contracts. Almost all green projects currently are set up based on power contracts with states or bidding agencies like NTPC and Solar Energy Corp of India (SECI). Day-ahead-market is an electricity trading market for delivery on the next day.
This would enable green electricity purchase in a short span. Green term-ahead markets, enabling electricity trade for up to 11 days, have been functional since last year.
The day-ahead trade through power exchange will lead to efficient price discovery and provide appropriate investment signals to RE investment. The proposal also aims to simplify day-ahead trade of renewable energy by providing back-up in case of uncertainties in solar and wind generation.
