New pooled power mechanism to reduce cost for debt ridden Discoms

A new pooled power pricing mechanism is proposed to be established by the power ministry that would ensure near uniform energy charges transitioning the country towards ‘One Nation, One Grid, One Price”.

The power ministry has issued a discussion paper on market-based economic dispatch (MBED) of power and has asked stakeholders for their comments on the subject by June 30, 2021.

The idea is to establish a central pool from where demand for power for each state would be met. This would ensure that Discoms get their source of power at optimal price helping them to bring down the cost of power.

The Ministry believes that the proposed MBED mechanism would be a key step in transitioning towards ‘One Nation, One Grid, One Price”.

According to a report by clean energy consultancy and communications firm Mercom, the proposed MBED mechanism is also expected to enhance greater renewable energy integration with the balancing area increased from state to national level leading to a huge drop in renewable energy curtailment.

The total power generation in the country is about 1,400 billion units with a weighted average price of Rs 2.36 per kWh.