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Discoms lining up to buy NTPC’s low-cost electricity under SCED

According to industry sources, discoms are lining up to avail electricity at lower rates from NTPC power stations and on priority

New Delhi: State-run National Thermal Power Corporation’s (NTPC) low-cost electricity supply under the Security Constrained Economic Dispatch (SCED) system has found takers in a large number of distribution companies. According to industry sources, discoms are lining up to avail electricity at lower rates and on priority. “A large number of discoms are availing benefit under the SCED system to get cheaper power supplies,” a source said.

What is SCED?

The SCED was implemented over a year ago. Under the system, power generation companies raise the capacity utilisation of efficient power plants or of units that are located close to coal mines and therefore incur lower freight cost. As a consequence, the cost of electricity generation goes down, which benefits both discoms and end consumers. Electricity supply from selected stations is then accumulated on a national-level merit order under which power is first dispatched from lower cost power plants whenever any state seeks electricity from the central pool. The programme has massively reduced the costs incurred by cash-strapped power distribution companies, the source said.

Discoms expected to save Rs 2.5 cr everyday

According to an estimate, under the SCED programme, discoms are expected to save as much as Rs 2.5 crore per day. And this comes as a huge relief as the whole sector is reeling under debt. A total of 49 thermal power plants are covered under the SCED programme with a total power generation capacity of 56 GW.

SCED has potential to save Rs 3,000 cr every year

All NTPC power stations are contributing to the central pool. The optimisation programme has the potential to save around Rs 3,000 crore per year if all coal stations of independent power producers and state generation companies are brought under its ambit.