TransformingIndia’sElectricityMarketsThePromiseofMarket-BasedEconomicDispatchandthePathForwardReport/February2023rmi.org/2TransformingIndia’sElectricityMarketsAuthorsandAcknowledgmentsAuthorRMIContactsFormoreinformation,contactindiainfo@rmi.orgAcknowledgmentsWewouldliketoacknowledgeBennyBertagnini,ClayStranger,andShashwatSharmaofRMI.WewouldalsoliketoacknowledgeAkshimaGhate,JagabantaNingthoujam,andArjunGuptaofRMIIndiaandSriramKrishnanfortheircontributiontothedevelopmentofthisreport.Theauthorsthankthefollowingorganizationsforofferingtheirvaluableinsightsandperspectivesonthiswork:AustralianElectricityMarketOperatorIndependentSystemOperatorofNewEnglandIndianEnergyExchangeLimitedLawrenceBerkeleyNationalLaboratoryPrayas(EnergyGroup)Theteamisalsogratefulfortheinputandcontributionsreceivedfromthefollowing:BeverlyBendix,RMISonikaChoudhary,RMIMathiasEinberger,RMITylerFarrell,RMIGrantGlazer,RMICharlesTeplin,RMISuggestedCitationRMI.TransformingIndia’sElectricityMarkets:ThePromiseofMarket-BasedEconomicDispatchandthePathForward,2023,https://rmi.org/insight/transforming-indias-electricity-markets/AvailableatRMIhttps://rmi.org/insight/transforming-indias-electricity-markets/ImagescourtesyofShutterstockunlessotherwisenoted.rmi.org/3TransformingIndia’sElectricityMarketsAboutRMIRMIisanindependentnon-profitfoundedin1982thattransformsglobalenergysystemsthroughmarket-drivensolutionstoalignwitha1.5°Cfutureandsecureaclean,prosperous,zero-carbonfutureforall.Weworkintheworld’smostcriticalgeographiesandengagebusinesses,policymakers,communities,andNGOstoidentifyandscaleenergysysteminterventionsthatwillcutgreenhousegasemissionsbyatleast50percentby2030.RMIhasofficesinBasaltandBoulder,Colorado;NewYorkCity;Oakland,California;Washington,D.C.;andBeijing.RMIhasbeensupportingIndia’smobilityandenergytransformationsince2016.rmi.org/4TransformingIndia’sElectricityMarketsTableofContentsExecutiveSummaryIntroductionElectricityMarketsGlobalWholesaleMarketLiberalizationMarketDesignElectricitySectorandMarketsinIndiaSchedulingandDispatchChallengesinIndia’sElectricitySystemMarket-BasedEconomicDispatchBilateralContractSettlementMechanismSummaryofPhase1(sinceApril2022)AnticipatedBenefitsofMBEDSystemCostSavingsUnlockingHighREIntegrationBarrierstoSeamlessTransitiontoMBEDSystemPreparednessFuelAllocation/AvailabilityStakeholderBuy-In81024182026303739191415252836273414rmi.org/5TransformingIndia’sElectricityMarketsSuccessfulMBEDTransition—RecommendationsNearTermMediumTermConclusionAppendixA:MilestonesofElectricityMarketDevelopmentinIndiaAppendixB:ElementsofElectricityMarketDesignAppendixC:SCEDPilotAppendixD:MethodologyforEstimatingCostSavingsUnderMBEDAppendixE:MethodologyforDeterminingThermalBalancingPotentialEndnotes42505553424757585951rmi.org/6TransformingIndia’sElectricityMarketsListofacronymsandabbreviationsAEMOAustralianElectricityMarketOperatorAPPCAveragePowerPurchaseCostBCSBilateralContractSettlementBRPBalanceResponsiblePartiesCAISOCaliforniaIndependentSystemOperatorCERCCentralElectricityRegulatoryCommissionDAMDay-AheadMarketDiscomDistributionCompanyEAElectricityActof2003EuphemiaPan-EuropeanHybridElectricityMarketIntegrationAlgorithmFERCFederalElectricityRegulatoryCommissionFTRFinancialTransmissionRightsGWGigawattIEXIndianEnergyExchangeLimitedISGSInterstateGeneratingStationISOIndependentSystemOperatorISO-...
