• 1,235 TWh Energy Demand
  • 334 GW Installed Capacity
  • 16 % Renewable Share

India

India is the third largest producer and fourth largest consumer of electricity in the world, covering 29 states and seven Union territories, with a population of over 1.3 billion.

India’s power sector is highly diversified with both conventional sources such as coal, natural gas and nuclear, as well as renewable sources such as hydro, wind and solar. The Government of India has established an ambitious target of achieving 175 GW of renewable power by 2022 to meet the demands of its growing population, as well as supporting its commitment to clean energy.

Market Design

How is the market structured?

Open Access

Open Access allows consumers an option to use the existing grid to select the power generator of their choice. Consumers who have a demand of greater than 1 MW (or as determined by individual state policies) are eligible for Open Access. The advantage to consumers under this scheme is that the power plant need not be co-located with their premises, thus eliminating the constraints on availability of land/ roof space.

Power may be purchased through the two power exchanges (i.e. traded online on the day-ahead or term-ahead market) or through bilateral transactions.

PPAs

Bilateral transactions are facilitated through Power Purchase Agreements (PPAs) between the consumer and the power generator at a mutually agreed tariff for a predetermined number of years.

Group Captive Power

Consumers entering into PPAs may also opt for captive power. In this model, a single consumer or group of consumers may either independently develop or engage with a third party to build a power plant by investing a minimum of 26% equity in the plant. Additionally, the customer(s) must consume at least 51% of the power produced by the plant. Such consumers will be exempt from paying the cross-subsidy surcharge.

Rooftop Solar

Rooftop solar may either be self-financed by the consumer or leased by the developer. The rooftop solar system may be connected to the electrical load of the facility. A bi-directional meter will record the import grid electricity and export of solar energy into the grid. This net metering allows for credit to the consumer for energy exported to the grid while at the same time reducing the electrical energy consumed from the grid. The net metering policy is determined by each state regulator.

Each state has its own open access policy that is published and amended by the respective state regulator from time to time.

Price is determined based on the provisions contained in the Electricity Act of 2003 and the National Tariff Policy. Price varies based on point of interconnection (low voltage – LT or high voltage – HT) and by end use classification (domestic, commercial, industrial, agricultural, etc.). Price of electricity includes both a fixed as well as a variable cost and is the price of energy purchased from the DISCOM. Price in each state is determined by the respective state regulator. The regulator does not determine “Cost of Supply” for bilateral PPA deals that are done directly with customer and only determines the open access charges.

India has two exchanges PXIL and IEX. There are different product segments, where participants can choose to transact electricity for durations ranging from a 15-minute block to 11 days.

Consumers can buy power from the power exchange, the local utility or from an independent power producer (IPP) or a combination of these options.

Open Access charges include transmission charges, wheeling charges and cross subsidy surcharge. These charges vary from state to state and depend on the end user classification and point of interconnection to the grid. These charges may be amended by the respective state regulator from time to time.

The verification of buying renewable power can achieved through entering into a Power Purchase Agreement (PPA) for renewable power or by purchasing Renewable Energy Certificates (RECs).

How are RECs (Renewable Energy Certificates) procured? One REC is the equivalent of 1,000 kWhs. RECs are traded on the IEX or PEX, the two power exchanges approved by the central regulator. REC prices are within a band of a floor price and a ceiling price that is determined by the regulator from time to time.

Are renewable Power Purchase Agreements (PPAs) available? Yes

Are Green Tariffs available? No

Regulators:

  • Central Electricity Regulatory Commission (CERC) – The main functions of the CERC include governing tariff of generating companies owned by government and also of private companies that are selling power under a composite scheme, to regulate inter-state transmission and of electricity, and to adjudicate upon disputes involving generating companies and transmission licensees
  • State Electricity Regulatory Commission (SERC) – Each state has an independent regulator that works within the broader framework established by the CERC. The SERCs determine the tariff for generation, supply, transmission and wheeling of electricity, and wholesale, bulk or retail sale within the state; regulate purchase and procurement process of distribution licensees; promote renewable energy by providing suitable grid connectivity; and regulate the purchase of renewable power

Power Exchanges:

  • Distribution companies, transmission companies, power exchanges

System Operators:

  • State Load Dispatch Centers
  • Total Capacity
  • Total Generation
Government of India, Central Electricity Authority, 2017 & 2018

Total
Capacity
334 GW