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Cost of electricity banking under open-access arrangement: A case of solar electricity in India

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  • Jain, Sourabh
  • Jain, Nikunj Kumar

Abstract

Installing 100 GW of solar capacity by 2022 is challenging as Indian distribution companies (DISCOMs) avoiding buying renewable electricity (RE) due to financial distress and generation overcapacity and large customers do not buy RE due to the intermittency. Thus, the provision of banking services by DISCOMs to open-access consumers (OACs) buying renewable electricity (RE) from independent generators can be alternative way to promote RE in India. However, banking services affect the merit order dispatch (MOD) schedule of DISCOMs and result in merit order effect (MOE). Based on the existing concept of MOE, the banking fee was calculated as the differences in cost of dispatch between in banking and without banking scenarios for DISCOMs of the Indian state of Madhya Pradesh for providing banking to a hypothetical customer willing to buy solar electricity under open access.

Suggested Citation

  • Jain, Sourabh & Jain, Nikunj Kumar, 2020. "Cost of electricity banking under open-access arrangement: A case of solar electricity in India," Renewable Energy, Elsevier, vol. 146(C), pages 776-788.
    • Handle: RePEc:eee:renene:v:146:y:2020:i:c:p:776-788
    DOI: 10.1016/j.renene.2019.06.172
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    Cited by:

    1. Jain, Sourabh & Shrimali, Gireesh, 2022. "Impact of renewable electricity on utility finances: Assessing merit order effect for an Indian utility," Energy Policy, Elsevier, vol. 168(C).

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    More about this item

    Keywords

    Merit order dispatch; Solar electricity distribution; Open access consumer; Electricity banking;
    All these keywords.

    JEL classification:

    • C22 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes
    • Q41 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Demand and Supply; Prices
    • Q42 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Alternative Energy Sources
    • Q48 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Government Policy

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