Green Day Ahead Market (GDAM)
Part of: Prelims and Mains GS-III: Energy
In News: India is the only large electricity market in the world to implement a Green Day Ahead Market (GDAM) exclusively for renewable energy.
- Will operate in an integrated way with the conventional day-ahead market. The Exchanges will offer the market participants to submit bids together for both conventional and renewable energy through the separate bidding windows.
- The clearance will take place in a sequential manner – renewable energy bids will be cleared first in accordance with the must run status of the renewables, followed by conventional segment.
- This mechanism will allow renewable energy sellers to subsequently bid in the conventional segment should their bids remain uncleared in the green market. There will be separate price discoveries for the both the conventional and renewables.
The introduction of GDAM is expected to create a domino effect that will lead to a gradual shift from PPA based contract to market-based models which will build and deepen the markets to the next level, paving the way for India to meet its ambitious target of 450 GW green capacity by 2030.
- Will deepen the green market and will provide competitive price signals, besides offering an opportunity to the market participants to trade in green energy, in the most transparent, flexible, competitive, and efficient manner.
- The market-based competitive prices will provide another option to renewable generators to sell power as well as accelerate the renewable capacity addition towards the Government’s vision of building India as a sustainable and efficient energy economy.
- Reduction of curtailment of green power, unlocking untapped renewable energy potential, ensuring instant payment to RE generators ie on the day of delivery itself.
- Enable Energy Transition: Energy transition is happening across the world and India is also committed to energy transition from fossil fuel to non-fossil fuel. Accordingly, the dynamics of the power market is changing. The buyer’s behavior is shifting from long term contracts to short term contracts and also towards the power market.
News Source: PIB