Power Ministry Proposes Expansion of Economical Power Dispatch Program

The program’s pilot phase had reduced variable costs by ₹23 billion

January 31, 2023


The Ministry of Power has proposed to expand the security-constrained economic dispatch (SCED) program by including more state-owned thermal projects, which would run on a day-ahead basis.

The program also intends to include intra-state thermal power stations. The objective of SCED is to minimize the total generation cost while ensuring the reliability of the power system.

SCED is a power system dispatch optimization technique used to allocate electricity generation to meet load demand while ensuring the stability and security of the system. It involves finding the most economical generation schedule while considering various constraints, such as transmission capacities, generator ramp rates, and system stability limits.

The SCED pilot project has been in operation since April 2019 with 50 inter-state generating stations with 59, 840 MW capacity whose tariffs are regulated by Central Electricity Regulatory Commission (CERC).

The pilot reduced variable costs by ₹23 billion (~$282.05 million).

Stakeholders can submit their comments and suggestions until February 22, 2023.

Benefits of SCED

The program ensures optimal resource adequacy through efficient management, even when the reserve level falls below the minimum requirement after the day-ahead markets.

SCED offers a 96-time block advance view of their expected schedule to power stations, allowing them to prepare for ramping up or down as needed in real-time operations.

The SCED program improves upon the real-time SCED dispatch, which operates on a block-by-block basis, starting two blocks before the actual operation.

The benefits of the SCED process are accumulated in the National SCED Pool Account and shared among generating stations and the states that benefit from them.

Requirements to implement the program

Implementing the program requires establishing a suitable regulatory mechanism under the draft Indian Electricity Grid Code (IEGC) 2022.

To implement the program, the day-ahead SCED requires custom software at NLDC, similar to the real-time SCED pilot. The software uses an algorithm that solves an optimization problem based on technical parameters and the merit order of energy and compensation charges.

The program’s implementation requires power plants participating in SCED to submit technical norms for unit commitment, such as start-up time, shut-down time, minimum uptime, the minimum downtime, ramp rates, etc., in the format specified by NLDC.

The program can only be implemented after at least three months after the revised IEGC is notified.

Proposed operation of day-ahead SCED

The generating stations would submit their declared maximum capacity, ramp rate, and minimum turndown level for the next day by 6:00 AM.

They would also submit the energy charge rate or compensation charge to be considered for SCED monthly.

The Regional Load Dispatch Centers (RLDC) would determine the entitlements and announce each beneficiary’s share by 7:00 AM on the day before.

The beneficiaries will then submit their requisitions or schedules from the inter-state generating stations by 8:00 AM on the day before.

Availability of resources

RLDCs will prepare the injection and drawl schedules for the power stations based on their availability and schedules submitted by beneficiaries/procurers by 9:30 AM.

The first run of the day-ahead SCED will be carried out at 9:45 AM on the day before the opening of the bidding window for the day-ahead market in power exchanges.

The schedules obtained from the SCED run will be published on the scheduling portal and are provisional at this stage.

The power stations can then participate in the day-ahead market or real-time market.

NLDC will determine the time block-wise requirement for tertiary reserves, using the output of the day-ahead SCED as one of the inputs.

Day-ahead energy market

By 1:00 PM, the bids for tertiary reserve ancillary services (TRAS)-up and TRAS-down will be consolidated and cleared by NLDC. Power exchanges will convey DAM results to NLDC after clearing the market.

Day-ahead ancillary services market

The time blocks where the cleared quantity exceeds the reserve requirement will be identified along with the shortage quantity.

The bids for TRAS-up and TRAS-down collected by the power exchanges will be consolidated and cleared by NLDC by 1:00 PM.

The shortage of reserves will be compared to the indicative reserves from the day ahead SCED run.

Ensuring adequate reserves

The NLDC will incorporate the results of the day-ahead market and the injection and drawal schedules from regional entities into the second run of the day-ahead SCED.

The inputs will be incorporated in the second run of day-ahead SCED for 96-time blocks will be done at NLDC by 5:30 PM.

If the available reserves are less than the shortfall, additional units will be instructed to start operating, and additional up reserve will be committed in order of variable cost while considering grid security, ramp rates, and impact on tie-line flows.

No additional units will be required if the available reserves are more than the shortfall.

Day Ahead SCED

The third run of day-ahead SCED for 96-time blocks will be done at NLDC after incorporating the newly committed units at 10:00 PM.

SCED schedules ensure that committed stations are scheduled with minimum turndown level while balancing load generation.

If required, the generation from on-bar stations will be reduced to maintain balance, subject to technical constraints and merit order.

The schedules provide visibility to power stations over 96-time blocks and enable them to handle ramping up or down in real time.

The SCED run in real-time (2-time blocks ahead) would further optimize the schedules after incorporating RTM results subject to security constraints.


The settlement for day-ahead SCED involves payments from the National SCED Pool Account to the generating stations and payments to the deviation and ancillary services pool account from the stations where incremental power is scheduled. Deployment of ancillary services is settled according to the CERC Ancillary Services Regulations 2022.

Generating stations scheduled for incremental energy are paid an equivalent energy charge from the deviation and ancillary services pool account. In contrast, those scheduled for decremental energy pay back the equivalent energy charge.

SCED will help optimally maintain resource adequacy, even when the reserve situation, even after the day-ahead markets, does not guarantee minimum reserves in the system.

The commission had revised the DSM framework to delink frequency and link deviation charges to the prices observed on market platforms in the day-ahead market (DAM), real-time market, and ancillary services market during a particular time slot.

The grid frequency deviated dangerously away from the acceptable range of 49.90 -50.05 Hz. It oscillated from 50.5 Hz and 49.41 Hz on December 20.