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IEX Unveils Joint Study with SECI on ‘RE Capacity Addition Through Markets to Achieve 2030 Targets’

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The Indian Energy Exchange Limited (IEX), India’s premier energy exchange, organized the second edition of ‘IGNITE- India Energy Dialogue’ on 24th August, attended by senior power sector stakeholders. A study on ‘RE capacity addition through markets to achieve 2030 targets’, conducted by Solar Energy Corporation of India (SECI) and IEX, through Deloitte, was released at the event. Shri Ghanshyam Prasad, Chairperson, Central Electricity Authority, Ministry of Power, graced the event as the chief guest.

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Other distinguished panelists included Mr. SK Mishra, Director of Operations, SECI; Mr. Rajesh Zoldeo, Chief Commercial Officer Sembcorp Energy India Ltd.; Mr. Vasilios Anatolitis, Fraunhofer Institute for Systems and Innovation Research ISI, Germany; Mr. Gautam Gaur, VP – Investment Banking & Corporate Finance, HDFC Bank and Mr. Nitin Sabikhi, Head- Energy Market, Renew Power.

As part of the keynote address Shri Ghanshyam Prasad, Chairperson, Central Electricity Authority, Ministry of Power, said, “India is transitioning towards a greener future and the power market is playing a key role in facilitating India’s NDC commitments alongside the existing mechanisms prevalent for RE capacity addition. The market-based models facilitate immediate payment realization to renewable energy generators which would further boost investment in the sectors.”

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He further added, “I would like to congratulate both IEX and SECI for conducting the study and proposing a possible model of market-based mechanism for RE capacity addition. It will be a great opportunity for all the stakeholders to use a market-based mechanism that can enable RE Capacity addition and help India in achieving green aspirations.”

The event saw an insightful exchange of views on a wide range of issues concerning the power markets. The discussion majorly focused on the Hourly Resolution Spot Price Projection for 15 years and on creating Merchant RE Model for the 15-year tenure.

Sharing his views Mr. S.N Goel, Chairman and Managing Director, Indian Energy Exchange, said, “In light of the ratified Nationally Determined Contribution target of our climate goals, we strongly believe that this is an opportune moment to brainstorm and evaluate the role of Power Exchanges in supporting accelerated growth of RE capacity addition in India.”

Power Markets will play a critical role in supporting accelerated growth of RE capacity addition given India’s ambitious targets to reduce emission intensity by 45% and achieve about 50% cumulative electric power installed capacity from non-fossil fuel-based energy resources by 2030. The study evaluates the feasibility of market based RE capacity addition. The MILP-based simulation forecasts the system marginal cost till FY39 using the projected growth of power demand, supply and changing energy mix. As per the findings of the study, market-based RE projects can command better IRR vis-à-vis the RE projects being set up through existing mechanism.

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Further, market-based models shall help in reducing RE integration cost at the national level due to large pool and balancing area. This model will also provide flexibility to the Discoms and Open access consumers to trade the green power as per time of need and quantum required. Market-based scheduling will also resolve issues such as payment delays and disputes affecting realization of RE generators. A gradual transition to such market-based models in line with high RE penetration countries, can boost investment sentiments and facilitate faster addition of RE capacities to meet India’s 2030 climate goals.

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