Centre finalizes revised framework of day-ahead Merit Order for power dispatch
2 min read 26 Apr 2023, 06:49 PM IST- The purpose of the merit order is to enable the lowest net cost electricity to be dispatched first, helping minimise overall electricity system costs to consumers
PremiumNEW DELHI : The Centre has finalised revised framework for day-ahead national-level Merit Order Dispatch Mechanism for power supply, which will eventually result in savings for end consumers. The move will also help states in meeting electricity demand in a cost-effective manner with less carbon footprint, the Ministry of Power said in a statement.
The purpose of the merit order is to enable the lowest net cost electricity to be dispatched first, helping minimise overall electricity system costs to consumers.
As per the power ministry’s statement, the revised mechanism will enlarge the scope of present mechanism by including all the regional entity thermal power plants and subsequently all intra-state thermal generators.
In the existing system, only the NTPC thermal stations were part of the merit order despatch.
“The existing mechanism of merit order dispatch at real time was made operational in April 2019. This optimised the total variable cost of generation pan-India, while meeting technical and grid security constraints," the ministry said.
The existing mechanism resulted in reduction of variable cost on pan-India basis worth ₹2,300 crore and these benefits were being shared with generators and their beneficiaries ultimately reducing the cost of electricity to consumers, it added.
Gains from the proposed Day-Ahead National Merit Order Dispatch Mechanism would be shared between generating stations and their consumers.
This will result in increased annual savings for the electricity consumers. This will also help states in maintaining resource adequacy in a cost effective manner with less carbon footprints.
The Day-Ahead National Merit Order Dispatch Mechanism will be implemented by the CERC through necessary regulatory process and it will be operated by GRID-INDIA at the national level.
Since 2014, the government has added 184.6 GW of additional generation capacity and 1,78,000 ckt kms of transmission line to connect the whole country into one grid.
The ministry has been taking several measures to enhance the competition in the sector with the objective of lowering the cost of electricity to consumers.