Govt revises merit order in power exchanges to maintain low costs

"Moreover, the revised mechanism will also enlarge the scope of the present system by including all the regional entity thermal power plants and subsequently all the intra-state thermal generators. In the existing system, only the NTPC thermal stations were part of the merit order despatc," it added.

The existing mechanism of merit order dispatch at real time was made operational in April 2019. This optimised the total variable cost of generation pan-India, while meeting technical and grid security constraints. The existing mechanism resulted in reduction of variable cost on pan-India basis to the tune of ₹ 2,300 crore and these benefits were being shared with generators and their beneficiaries ultimately reducing the cost of electricity to consumers, the government said in its statement.

"The gains out of the proposed Day-Ahead National Merit Order Dispatch Mechanism would be shared between generating stations and their consumers. This will result in increased annual savings for the electricity consumers. This will also help the states in maintaining resource adequacy in a cost effective  manner with less carbon footprints," it said.

The Day-Ahead National Merit Order Dispatch Mechanism will be implemented by CERC through necessary regulatory processes and it will be operated by GRID-INDIA at a national level.

Since, 2014, the government has added 184.6 GW of additional generation capacity and 1,78,000 circuit kilometers of transmission line to connect the whole country into one grid, which has transformed the whole country into one integrated electrical system.