Power Ministry comes up with revised framework to provide cheapest power lot first to consumers
The framework for electricity supply has been revised by the Power Ministry to provide the cheapest power lot first to consumers and help state utilities to meet demand in a cost-effective manner.
The power ministry has revised the structure of the Day-Ahead National level Merit Order Despatch Mechanism to lower the overall cost of electricity generation, which will translate into lower power prices for consumers, an official statement said Wednesday.
According to the revised mechanism, the cheapest generating resources (power) will be first supplied across the country to meet the system demand.
The gains out of the proposed Day-Ahead National Merit Order Dispatch Mechanism would be shared between generating stations and their consumers.
The development will result in increased annual savings for electricity consumers. In April 2019 the existing mechanism of merit order dispatch in real-time was made operational. The mechanism optimised the total variable cost of generation pan-India while meeting technical and grid security constraints.
The existing mechanism resulted in a reduction of variable cost on a pan-India basis to the tune of Rs 2,300 crore and these benefits were being shared with generators and their beneficiaries, ultimately reducing the cost of electricity to consumers.
The scope of the present system will also be enlarged with the revised mechanism by including all the regional entity thermal power plants and subsequently all the intra-state thermal generators.
This will also help the 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 CERC through the necessary regulatory process and it will be operated by GRID–INDIA at the national level.
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