As India progresses on its Energy Transition, the challenges of efficient power management, cost reduction, system reliability, and resilience have never been more pronounced. In the era with dominance of conventional, firm generation resources, utilities have been using methods like Merit Order Despatch to ensure least cost dispatch. However , with the increasing share of variable generation such as solar and wind , more advanced procedures are required to ensure a balance amongst reliability , sustainability and affordability. While we strive to achieve decarbonization targets, the imperatives of affordability call for tapping of full potential of cost saving through optimization. Undoubtably, The Integrated Resource Planning envisaged in ensuring Resource Adequacy offers the largest scope of savings from optimized capacity expansion planning, next in priority comes the potential of savings from optimization of dispatching the available generation resources. CERC has already implemented the Security-Constrained Economic Dispatch (SCED) at national level and now has passed an order in February 2024 in the matter of coupling of power exchanges – for coupling the bids received in power exchanges with SCED for further tapping the benefits of optimization on pilot basis. CERC mandated SCED covers only 50 GW capacity out of total 448 GW capacity in the country. Despite its proven benefits worldwide, SCED remains an underutilised approach at the state level in India. Implementing this innovative model could significantly enhance power sector operations in the states, paving the way for an optimized, cost-effective, and reliable energy future. SCED: What Is It?
At its core, SCED is a mathematical optimization technique designed to ensure that the dispatch of electricity happens at the least possible cost while maintaining system security. It systematically balances demand and supply while considering various operational constraints, such as transmission limits, ramp rates of generators, and reserve requirements. SCED addresses the limitations of traditional dispatch methods, such as the Merit Order Dispatch (MOD) or “bucket filling” approach, by introducing a more structured, transparent, and reliable system of dispatch optimization.
To begin with , SCED compares the actual dispatch of generators with an optimal, simulated counterfactual dispatch. The gaps between the two can highlight inefficiencies or constraints, offering opportunities for improvements. Such insights are invaluable not only for real-time operations but also for long-term planning and investment in grid infrastructure.
Why Implement Intra-State SCED?
A key benefit lies in reducing power procurement costs—often one of the largest expenses for power distribution companies (discoms). By optimizing dispatch, states could achieve substantial cost savings. Recent assessments suggests that even a modest 2-3% improvement in dispatch efficiency could save the Indian power sector over INR10,000 crore annually. SCED also offers several other broader system-level benefits, including:
1. Enhanced Reliability: By incorporating multiple system constraints, SCED strengthens the resilience and reliability of the grid, minimizing the risk of blackouts or system failures.
2. Environmental Impact: Optimized dispatch reduces the need for excessive or inefficient generation, directly contributing to a reduction in carbon emissions.
3. Data-Driven Decision Making: SCED generates “shadow prices,” or duals, which provide crucial insights into the cost of relaxing specific system constraints. This allows policymakers and grid operators to make informed decisions about where to invest in transmission upgrades, frequency control measures, or renewable integration.
4. Seamless Renewable Integration: SCED is particularly effective in integrating variable renewable energy (VRE) sources such as solar and wind. The precision and adaptability of SCED ensure that renewable generation can be smoothly incorporated into the grid without sacrificing system security.
The Challenges in Rolling Out Intra-State SCED
Despite the obvious benefits, rolling out SCED at the intra-state level is no small task. States face several significant hurdles:
1. Regulatory Resistance: Many states operate under outdated grid codes and regulatory frameworks that do not fully embrace SCED. Updating these regulations requires coordination between state regulatory commissions, discoms, and other stakeholders.
2. Technological Constraints: Implementing SCED demands sophisticated optimization tools, such as Linear Programming (LP) algorithms, which can handle the complex, large-scale power dispatch problem in real time. While software platforms like GAMS (General Algebraic Modelling System) offer powerful solutions, states will need to invest in these technologies and train their grid operators.
3. Capacity Building Beyond technology, there is a critical need for capacity building among stakeholders. All stakeholders including Discoms, grid operators, and regulators must be trained in the principles of SCED and optimization. The complexities of dispatch optimization, shadow pricing, and constraint management require both theoretical and practical understanding to ensure a smooth implementation.
4. Stakeholder Buy-In: Perhaps the most significant barrier is getting buy-in from all stakeholders. Discoms, grid operators, and regulators must recognize the value of SCED, not only in terms of cost savings but also in system robustness and operational efficiency. Resistance to change, particularly in a sector that has long relied on traditional methods like MOD, can slow progress.
The Path Forward: A Strategic Transition
The transition from MOD to SCED is more than just a technical upgrade. It represents a strategic shift toward a more resilient, efficient, and sustainable power system. In a time when power grids are becoming increasingly complex with the addition of renewables and evolving market dynamics, SCED offers a proven method to streamline operations and optimize costs. As we face rapid changes in energy demand, generation, and market structures, optimization is indespensable. The use of SCED is crucial to turning mathematical principles into tangible energy solutions for India. Going forward, SCED could be further evolved as Security and Emissions Constrained Dispatch ( SECED) by incorporating an emission constraint – a more direct approach to decarbonization than the present RPO approach. It will be possible to achieve desirable level of emission intensity reduction in a scientifically least cost manner.
Conclusion: SCED as a Pillar of India’s Power Transition
As India’s power sector evolves, SCED must be one of the high priority action area. Ministry of power should consider taking it up in a mission mode programme with comprehensive regulatory reform, and investment in technology and training. Collaboration between SLDCs and reputed institutes like IITs should be an integral part of this programme. Uttar Pradesh is already collaborating with IIT Kanpur. Further, implementing SCED could be a necessary component of all future Technical Assistance programmes by World Bank , ADB etc.
It is doable and need to be done as early as possible by the States in India.
