Abstract
In India, short term electricity market realises on power exchanges to trade standard contracts on intraday and day ahead horizon. In the absence of contracts on real time horizon, market participants often used to exploit frequency based grid balancing mechanisms. This led to the concerns on grid safety and security. Therefore, to address this issue, the policy makers formulated ‘Real Time Market (RTM)’ to offer contracts on real time horizon. RTM was introduced in 2020 and in the short span of time, it has attracted significant liquidity to become second highest avenue in terms of number of transactions taken place. This paper elaborates on these developments and narrows down its scope gradually. First, the paper briefly provides an overview of short term electricity market in India inter alia describing power trading and power exchanges. The paper then elaborates on the erstwhile issues of real time power procurement and misappropriation of deviation settlement mechanism and ancillary services by the market participants. The paper while discussing these, derives the necessity of RTM and opportunities which it offers. In last, paper provides a short term assessment of RTM and concludes it with few policy recommendations.
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