RTM market in India disrupted by out-of-market thermal compensation under SCUC
RTM market in India is facing structural disruption as SCUC mechanisms enable thermal plants to operate outside competitive exchanges. These dispatches ensure cost recovery without exposure to real-time market pricing.
The SCUC framework allows grid operators to mandate unit commitment based on system reliability requirements. This overrides standard market-based dispatch, where the lowest-cost power typically clears. As a result, thermal generators receive assured compensation through national pooling accounts.
Regional reports confirm repeated SCUC settlements, indicating a sustained reliance on out-of-market scheduling. This reduces the volume of power available in competitive platforms and weakens price discovery mechanisms.
From a State electricity tariffs standpoint, the impact is direct. Distribution companies bear SCUC-related costs and transfer them into consumer tariffs, increasing the financial burden on end-users.
Analysis in DAM market in india highlights that bypassing exchange platforms reduces liquidity and transparency. Market participants face distorted signals when large capacities are removed from open competition.
Future RTM market in India reforms must align SCUC operations with market pricing. Without this integration, the gap between administrative dispatch and competitive procurement will continue to widen, Power Market, RTM India, Energy Policy, Grid Stability, Electricity.