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Power minister RK Singh unveils GDAM portal to promote renewable energy
The development assumes significance as India has set a target to have a 450 GW capacity of pure renewable energy by 2030. At present, India has an installed renewable energy capacity of 147 GW, including hydro power, and another 63 GW is under installation through various projects
New Delhi:
The Union government on Monday launched a new market segment, Green Day Ahead Market (GDAM), which will enable electricity generation and distribution companies to buy or sell renewable energy through open access, the ministry of power and renewable energy said in a statement.
Union minister of power and renewable energy RK Singh, while launching the portal, said India is the only large electricity market in the world to implement a GDAM exclusively for renewable energy.
“The buyer’s behaviour is shifting from long-term contracts to short-term contracts, which is true even in the power market. This new initiative will help in enabling this energy transition. It will provide competitive price signals and offer an opportunity to the market participants to trade in green energy in the most transparent, flexible and efficient manner. The distribution utilities would also be able to sell surplus renewable power generated in their area at GDAM,” said Singh.
The development assumes significance as India has set a target to have a 450 GW capacity of pure renewable energy by 2030. At present, India has an installed renewable energy capacity of 147 GW, including hydro power, and another 63 GW is under installation through various projects. The move is also aimed at reducing the country’s dependence on imported sources of fossil fuels.
At a time when the country is facing a coal shortage, which is straining the generation capacity of thermal power plants, Singh said GDAM will help reduce the cost of power. “We saw that spot purchase of electricity shot up in the past few weeks when the demand for electricity from thermal power plants shot up. At present, average cost of electricity per day is about ₹4 per unit, which will further come down with GDAM,” said the Union minister.
With this, the government is aiming to gradually shift from long term power purchase agreement (PPA)-based contracts to market-based models. At present, PPAs are mostly signed for up to 25 years in the electricity sector in the country.
“The shift to short term power contracts will help open up the renewable energy market further as it will allow large industries also to go green by purchasing clean electricity from GDAM and selling in case of surplus. The GDAM will operate in an integrated way with the conventional day-ahead market (DAM) in the power sector. It will allow market participants to submit bids together for both conventional and renewable energy through separate bidding windows,” the power ministry said in a statement.
An official from the power ministry explained that renewable energy bids will be cleared first, since plants generating green energy have been given a “must-run status”, which will be followed by clearances to the conventional segment (coal fired power plants). “This mechanism will allow renewable energy sellers to subsequently bid in the conventional segment should their bids remain uncleared in the green market. There will be separate price discoveries for both conventional and renewable electricity,” the official said, requesting anonymity.
