The introduction of GDAM will also help pave the way for the country to meet its ambitious target of 450 GW green capacity by 2030
India is the world’s third largest renewable energy producer with 38 percent (136 GW out of 373 GW) of total installed energy capacity in 2020 from renewable sources. AFP
Union Power Minister RK Singh launched the green day-ahead market (GDAM) that is expected to give a fillip to the renewable energy sector of the country.
“We are opening doors for renewable energy. In this new era of continuous reforms including the launch of GDAM today, any interested party can set up and sell renewable energy,” Singh said during the launch on Monday.
Here’s an understanding of this new reform introduced by the Narendra Modi-led government.
What is Green Day-ahead market?
As per a statement issued by the ministry of power and renewable energy, the GDAM will enable electricity generation and distribution companies to buy or sell renewable energy through open access.
The power ministry added in its statement that the launch will also provide competitive price signals, besides offering an opportunity to the market participants to trade in green energy, in the most transparent, flexible, competitive, and efficient manner.
Explaining how the system will work, the Green Day-ahead market will operate in an integrated way with the conventional day-ahead market. The Exchanges will offer the market participants to submit bids together for both conventional and renewable energy through the separate bidding windows.
The clearance will take place in a sequential manner — renewable energy bids will be cleared first in accordance with the must-run status of the renewables, followed by the conventional segment. 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 renewables.
Power secretary Alok Kumar said the green day ahead market would help green projects facing curtailment, unlocking untapped renewable energy potential and ensuring instant payment to renewable energy generators.
The introduction of GDAM will also help pave the way for India to meet its ambitious target of 450 GW green capacity by 2030.
Renewable energy in India
India is the world’s third largest consumer of electricity and the world’s third largest renewable energy producer with 38 percent (136 GW out of 373 GW) of total installed energy capacity in 2020 from renewable sources.
In 2016 under the Paris agreement, India made the commitment of producing 450 GW, or 40 percent of its total electricity, from non-fossil fuel sources by 2030.
The GDAM comes at a time when the country is facing a shortage of coal.
In fact, the minister stressed that the country needs to decrease its dependence on imported sources of fossil fuel.
Coal shortages in India
In early October, India’s thermal power plants faced a severe coal shortage, with coal stocks coming down to critically low levels.
Government data showed that as of 6 October, 80 percent of India’s 135 coal-powered plants had less than eight days of supplies left — more than half of those had stocks worth two days or fewer.
Later, on 16 October, Coal India Limited Chairperson Pramod Agrawal, in an interview to India Today, said the situation had improved and there were enough stocks with the CIL to meet demand if any crisis-like situation develops in the near future.
With inputs from agencies