Coming soon: a uniform electricity grid across the country at a price
There is yet another Indian mega-project to come: one nation, one grid, one frequency and one power supply price. Since the NDA government came to power in 2014, it has implemented a Nation and Tax (GST), Nation, Ration Card. The latter is aimed at a single source of food.
The Union Energy Ministry released a discussion paper on June 1. The deadline for providing comments is June 30. The Union government wants to implement the first phase of the market-based economic allocation of electricity (MBED) from April 1, 2022.
“The discussion paper covers the proposed mechanism for implementation, estimation of the indicative benefits of the mechanism, key issues and suggested mitigation mechanisms and the way forward,” a statement from the Ministry of Foreign Affairs said. Union Energy.
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The ministry intends to hold a wider consultation with all stakeholders to reach consensus on the implementation of phase 1 of the MBED from April next year.
“The MBED will ensure that the cheapest production resources across the country are sent to meet the overall demand of the system and will therefore be a win-win for distribution companies and producers. This will ultimately translate into estimated annual savings of over 12,000 crore for consumers, ”the ministry said.
MBED will also facilitate greater integration of variable renewables by expanding the balancing zone at the national level and is also expected to optimize the need for reserves and ancillary services, the ministry said.
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It was suggested to implement the MBED in phases. Phase 1 would only involve the thermal park of central power plants to test the effectiveness of the MBED mechanism, identify any gaps or potential issues that need to be addressed prior to a nationwide rollout and familiarize all key stakeholders with the framework. . This will help allow the construction and testing of the necessary infrastructure and systems prior to scale-up.
The full benefit of physical integration would be achievable when India moved to a national level optimization and country wide balancing zone instead of the self-programming and siled balancing mechanisms currently. tracked within state or regional borders.
The next step in the reform of the functioning of the electricity market is to implement the MBED to move towards a “a nation, a network, a frequency, a price ”.