Green Term Ahead Market (GTAM) | UPSC
Indian Power Market goes Green
WHY IN NEWS:
Union Power Minister launches Green Term Ahead Market (GTAM) in electricity through video conferencing
SYLLABUS COVERED: GS 3: Energy : Power
For PRELIMS go through the aim and significance of this initiative .
For MAINS compare this initiative with REC’s framework . Let us dive in !
GREEN TERM AHEAD MARKET (GTAM)
- GTAM to benefit buyers of RE through competitive prices and transparent and flexible procurement.
- Sellers will also be benefitted by getting access to Pan India Market.
- This would promote RE merchant capacity addition and help in achieving RE capacity addition targets of the country.
- GTAM platform will lead to increase in number of participants in renewable energy sector.
- The Government of India’s target of 175 GW RE Capacity by 2022 is driving accelerated renewable penetration pan-India.
- Thus it provides a platform to environmentally conscious open access consumers and utilities to buy green power.
KEY FEATURES OF GTAM
- BILATERAL TRANSACTIONS : Transactions through GTAM will be bilateral in nature with clear identification of corresponding buyers and sellers.
- RPO TARGET : GTAM contracts will be segregated into Solar RPO & Non-Solar RPO as RPO targets are also segregated.
- LIVE TRADING : Further, within the two segments GTAM contracts will have Green Intraday, Day Ahead Contingency, Daily and Weekly Contracts.
- DAILY & WEEKLY CONTRACTS – Bidding will take place on MWh basis.
- BIDDING : Both buyers and sellers can submit the bid, however the seller will provide profile in terms of 15-minute time block wise quantity (MW) along with the price (Rs/MWh).
- MULTIPLE BUYERS : In case of multiple buyers, the profile will get allocated on a pro-rata basis.
- PRICING : Price discovery will take place on a continuous basis i.e. price time priority basis.
- AUCTIONS : Subsequently, looking at the market conditions open auction can be introduced for daily & weekly contracts.
After the contract gets executed scheduling will take place as per the profile.
Central Electricity Regulatory Commission (CERC) has now approved Green term ahead market (GTAM) contracts on the Indian Energy Exchange (IEX) platform.
IEX is presently operating in-
- Day Ahead Market (DAM), where transactions in electricity are allowed for a day in advance.
- Term Ahead Market (TAM), where electricity is traded the same day to up to 11 days in advance.
- Real time Market (RTM), where auction sessions are conducted at even time blocks on the hour, and delivery commences one hour after the trade session is closed.
HOW IS GTAM DIFFERENT FROM RECS
- In REC framework only green attributes are traded on power exchange and bought by entities obligated to fulfill their RPO obligations
- In G-TAM the physical delivery of green power will take place .
- G-TAM will be beneficial for entities who are looking beyond just fulfilling their RPO obligations and moving to green energy.
- As the regulators are being stringent with DISCOMS regarding fulfillment of their RPOs
- DISCOMS can now meet their short term energy demand in addition to RPO compliance instead of just buying RECs.
- In short, both G-TAM and REC market will complement each other.
MECHANISM OF REC TRADING
SOURCES : JMKRESEARCH
- Opening a separate renewable energy trading window in exchanges will lead to enhanced visibility and create organized competition.
- With GTAM, the buyers would be able to buy green power along with fulfilling their RPO obligations.
- They need not tie up capacity in advance or sign power purchase agreements with DISCOMS or generators.
- With GTAM, solar power developers can now trade the surplus renewable energy in power exchange.