Effective Interaction Between India’s Carbon Credit Trading Scheme and the Power Market

LIST OF FIGURES & TABLES i

LIST OF ACRONYMS ii

EXECUTIVE SUMMARY 1

1. INTRODUCTION 4

2. INDIA’S POWER SECTOR 6

2.1. ELECTRICITY SUPPLY 6

2.2. ELECTRICITY DEMAND 7

2.3. POWER DISPATCH MECHANISM 8

2.4. PRICE FORMATION 9

3. ASSESSMENT OF POTENTIAL EFFECTIVENESS OF THE INTERACTION BETWEEN THE CCTS & THE POWER MARKET 13

3.1. POWER PLANT DISPATCH 13

3.2. WHOLESALE ELECTRICITY PRICES 14

3.3. RETAIL ELECTRICITY PRICES 17

4. ACHIEVING AN EFFECTIVE INTERACTION BETWEEN THE CCTS & THE POWER MARKET 22

4.1. ACTION PLAN 23

4.2. PHASED TRANSITION ROADMAP 26

ANNEX 1. INTERNATIONAL EXPERIENCE OF CARBON COST PASS-THROUGH & SUPPORT FOR VULNERABLE CONSUMERS 28

REFERENCES 33