Plan for 15-minute trading blocks on power bourses

Hourly trading blocks on Power Exchanges could be replaced with 15-minute time-blocks for attracting wind and solar generators to commit power for trading on the bourses.The move, being actively considered by power regulator the Central Electricity Regulatory Commission (CERC), is also aimed at enabling better price discovery of electricity as well as helping in handling transmission congestion issue.

“Wind and solar generators, which are dependent on wind velocity and sunlight availability respectively, carry a higher risk in bidding and committing supply for time blocks of one hour. Smaller bidding time blocks will increase their comfort to bid and will attract them to the day-ahead market.“This is also relevant especially in the context that there is a greater push towards renewable at all policy making levels,” a CERC official said. The matter was taken up at the CERC's Central Advisory Committee meeting on September 20.

Bidding and delivery

According to officials, the shift to a 15-minute bidding block will ensure harmonisation between the bidding in power exchanges and scheduling for physical delivery by system operator, as prescribed in the India Electricity Grid Code (IEGC).“Worldwide, the power markets are aligned with the scheduling philosophy,” an official said.

The move is also expected to increase the operational flexibility of the system operator and the utilities. As the utilities move closer to the day of operation, the uncertainty in forecasted demand is reduced and maximum flexibility is needed in the day-ahead procurement to balance their portfolio.This inflexibility manifests as imbalances in real-time operation, thereby posing a threat to grid security. This, according to officials, will get addressed with 15-minute bidding time blocks.

Cumbersome process

On the operational side, those against a change in the trading time blocks, argue that the hourly bidding model is simple and intuitive to understand and handle. With introduction of 15 minutes time block for the market, participants will have to bid for 96 time blocks, which may be cumbersome to handle manually. However, with usage of software systems this process can be automated, officials said.

The power exchange trading software application will require modifications and the bidding window will require modification to accommodate 15-minute bidding time blocks. Block bid definition will also need to be suitably modified by the two operational power exchanges.