Security and Emissions Constrained Dispatch : Model and Case Study for India - Technical Report (including the GAMS Source Code)

Overview & Synopsis

The introduction of Security Constrained Economic Dispatch (SCED) by the National Load Dispatch Center (NLDC) in 2019 has yielded significant economic savings and smoother operation of interstate generators. As India embarks on the introduction of the Indian Carbon Market (ICM), it is time to consider the extension of the SCED framework to include emission constraints to target the most economically viable sources of emissions reduction within the power sector. Although the timing of inclusion of the power sector in ICM is not yet determined, development of a Security and Emissions Constrained Economic Dispatch (SECED) tool to analyze how emissions reductions can be achieved, will help to provide signals to power generation and distribution companies to buy/sell Carbon Credit Certificates (CCC). As a way forward, it is important to pilot SECED in NLDC/SLDC to develop necessary data and insights into CO2 reduction measures, marginal/average costs, how dispatch and interstate flows will change, etc. SECED planning function can also be a useful aid for other purposes including medium-term resource adequacy studies and maintenance decisions to complement the incumbent Load Generation Balance Reporting. As Grid-India/NLDC has SCED operational for over six years and has bulk of the data needed for SECED, the core dispatch optimization model and all implementation measures fully established, a pilot in NLDC with a modest 1% or a couple of million tons reduction target may be a natural starting point. As a critical first step, a complete SECED database for all plants including local pollutant and CO2 coefficients will need to be put in place. These coefficients will directly translate into very significant cash flows. As the ICM takes off for other sectors, it is a good opportunity to put in place a robust calculation and/or verification process for individual generating units. It will also be an opportunity to calculate the local pollutant coefficients. This is a fundamental step that needs to be done rigorously to lend credibility to the carbon crediting process not just nationally but internationally as the credits may be traded beyond national boundaries.