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Electricity distribution’s architecture has hundreds of generators on one side and millions of consumers on the other, with State, regional and national ‘load despatch centres’ in the middle, functioning pretty much like a router.
For years, the LDCs followed a “cheapest first” principle, aka ‘merit order despatch’, where the producer of cheaper power was picked first. Then, in 2019, the Central Electricity Regulatory Commission (CERC) ushered in the ‘security constrained economic despatch’ (SCED) model for 50 interstate generating stations with a combined capacity of 59,840 MW, factoring in the need for grid security. The SCED model, which uses methods such as linear programming and quadratic programming, weighs in on issues like voltage stability, heating up of transmission lines and preparedness for contingencies by keeping aside a reserve capacity, rather than just favouring the cheapest option.
Now, the World Bank wants to take it a step further. It has suggested a ‘security and emissions constrained economic despatch’ (SECED) model. Essentially it means also taking into account the carbon dioxide, sulphur oxide and nitrogen oxide emissions of a generating station when scheduling electricity despatch.
Climate mitigation
By integrating emission constraints into the despatch process, SECED aligns with global efforts to mitigate climate change while ensuring secure and cost-effective operation of power systems.
The World Bank has pitched for SECED in a note submitted to the ‘Draft Central Electricity Regulatory Commission (Terms and Conditions for Purchase and Sale of Carbon Credit Certificates) Regulations, 2024’, for which the Indian electricity regulator had called for comments. The note, written by World Bank’s Deb Chattopadhyay, along with former Grid India officials SK Soonee and Debasis De, details how electricity despatch could be scheduled using a shadow price, or the price of permits under the cap-and-trade system, for carbon dioxide.
This suggestion, if accepted, could be negative for coal-fired plants, especially the old ones, which produce cheap electricity but emit copious carbon dioxide. Therefore, SECED “augurs well with the objectives of the Indian Carbon Market (ICM)”, the note says.
The ICM, scheduled to open in 2026, excludes the power sector initially. “Exploring the potential for emissions reduction by adjusting the dispatch through the Security and Emissions Constrained (SCED) process would be interesting,” the authors say.
They add that their State-specific analysis showed “small but cost-effective (5 per cent emission reduction) opportunities” by counting in emissions while scheduling. “This could be a simple way to start the process, which has many side benefits including setting up a price benchmark, coalescing an operational planning strategy to complement the carbon market with efficient carbon reduction opportunities through dispatch and partial/seasonal closure of plants and identifying plants that are expensive and polluting that may be candidates for retirement in the long run,” the note says.
Benchmark price
SECED presents a natural extension of SCED, which augurs well with the objectives of the ICM, the note says. “It will provide a good understanding of how reduction in CO2 level may be achieved within the power sector, including a useful benchmark CO2 price that can be generated through the SECED model,” it says.
SECED, as a concept, is still in its infancy globally, but the thinking has taken root. However, linking electricity scheduling with the carbon market is new — the price of carbon dioxide comes from the market.
Experts are suggesting integrating environmental constraints with economic despatch, to reflect the commitment to emission reduction.
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Published on March 30, 2025
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