Indian Energy Exchange, has launched its Real-Time Electricity Market (RTM) platform, with an intent to help discoms to better plan their power requirements.

IEX is largest energy exchange in India providing a nationwide, automated trading platform for physical delivery of electricity, Renewable Energy Certificates (RECs) and the RTM is an endeavor by the Central Electricity Regulatory Commission (CERC). With the RTM, the market regulator intends to make the power market dynamic by enabling trade in electricity through half-hourly auctions.

How the platform works

There will be 48 auction sessions during the day, with delivery of power within one hour of closure of the bid session, IEX said. This would aid distribution companies to manage power demand-supply variation and meet 24x7 power supply needs in a better manner. IEX’s RTM is powered by the double-sided closed auction to ensure transparency, competitive price discovery to the market participants.

With this effort, the power sector is looking to change the current process for unplanned power schedule management. Currently, this is managed through the Deviation Settlement Mechanism and in the process, power purchasers end up paying penalties. The penalties range from Rs 200/ day/MW to Rs 2,000/ day/MW.

Purpose of Real-Time Electricity Market

“The primary purpose of the RTM is to allow utilities to manage their power demand dynamically, save on huge deviation-related penalties and integrate renewables in an effective way,” said Rajiv Srivastava, CEO & Managing Director, IEX Ltd.

RTM will facilitate utilities to reduce dependency on deviation framework and save on the huge penalties, company officials said. A similar effort was announced by NSE and NCDEX promoted Power Exchange India Limited (PXIL), which also started trading from June 1.

Further, an RTM will also support the grid operators to enhance overall safety and security of the grid, officials said. With the fast-paced shift towards renewable energy, RTM will facilitate the discoms to manage the challenge of intermittency associated with renewables.

The market will help the discoms to forecast and schedule green energy in an effective way thereby supporting the national green energy aspirations. India has set a target of attaining 175 GW in renewable capacity addition by 2022.

RTM would also provide an opportunity to generator companies (gencos) to sell their un-requisitioned capacity thereby enabling efficient use of generation capacity.

Generating companies otherwise tied up to long term PPAs can also access the power market through RTM for transacting their un-requisitioned surpluses. "Till this point no other market mechanism allowed the generating companies to do so. The new market segment will foster greater flexibility, competition and efficiency in electricity sector,” stated Srivastava.