An app that can save Rs 20,000 crore in 5 years

Merit

Use of technology to increase transparency and accountability and transfer maximum benefit to the consumer reflects a 360-degree approach of a ‘Government in Action’. 

A similar approach has been considered by the Government wherein Merit Order Despatch of Electricity for Rejuvenation of Income and Transparency (MERIT) app and e-Bidding for providing solution to States to select independent power producers (IPPs) for procurement of power by transferring their domestic coal under the scheme of flexibility in utilization of domestic coal. The app and the web portal would result in optimum utilization of coal, which would save the consumer close to Rs 20,000 crore five years down the line.

Over the last three years, India has rapidly achieved adequacy in terms of availability of power. Now the time has come to shift the focus to optimal utilization of the valuable and scarce energy resources for achieving economy and efficiency in operation. The merit order stack is a common approach to the problem of minimizing the sum of generators’ operating costs while honoring the operational constraints of the available generation to supply the demand in a secure and reliable manner.

The app displays extensive array of information regarding the merit order such as daily state-wise marginal variable costs of all generators, daily source-wise power purchases of respective states/UTs with source-wise fixed and variable costs, energy volumes and purchase prices. The app also gives information regarding reasons for deviation from merit order such as must run conditions, transmission constraints, etc.

The advantages of MERIT app are as follows:

  • Empowerment of the consumer and participative governance
  • Transparent information dissemination pertaining to marginal variable cost and source wise purchase of electricity
  • Promotes economy and efficiency in operations
  • Helps understand the utility portfolio and its complexity
  •  Optimization of power procurement costs
  • Facilitates renewable integration and handling of the variability and uncertainty of renewables
  • Indication of supply side reliability and adequacy
  • The flexibility in utilization of domestic coal scheme envisages transferring coal to more efficient IPPs generating stations, leading to lower generation costs and ultimately lesser         cost of electricity for the consumers